Biggest U.S. Banks Aren’t as Strong as They Appear?

November 3, 2020

* Currencies, metals and Oil all rally overnight… 

* It’s election day!  Make sure you make a plan to go vote! 

Good day… And a Tom Terrific Tuesday to you! Well, baseball is over for this year, and now we head to the hot stove league… The Cardinals are in dire need of a heavy bat to hit behind Paul Goldschmidt… There will be plenty of free agents out there, but who knows what any team can afford after a year with no ticket revenue… And there’s a chance that next year could be the same, or with maybe 25 or 50% ticket revenue… I’m still waiting for the folks at Roger Dean Stadium to contact me about next years Spring Training games… They don’t know, I’m sure… But I do have, I think 4 more games to credit to next year’s games… I always get excited when I see the envelope from Roger Dean Stadium in my mail box… That means that Spring Training is only 3.5 months away! YAHOO!  The Ryan Street band greets me this morning with their song: When The Lights Go Down…

And that’s what will happen tonight at 7pm… The lights will go down at the voting venues… Except if there are people that arrived to vote before 7, the venues have to let you vote!  But don’t wait that long, and you won’t have to worry about it!  I sure  hope the rioting and chaos that is expected if one team loses, doesn’t happen, and that it was all talk and no walk… fingers crossed! 

Well…  The dollar bugs didn’t come out to play yesterday, and the currencies drifted but stayed pretty Steady Eddie all day. Yesterday morning the Dollar Index was 94.04, and when I looked at things yesterday afternoon, the Index was still 94.04… no change on the day!  Gold however, continued to add to the early morning gains and ended up gaining $17.20 to end the day at $1,896.80, and Silver gained 44-cents to $24.18… 

The price of oil dropping to $35 this week, really has the Petrol Currencies on tented hooks…  I’m really frustrated with how the Russian ruble is being treated these days… The price of Oil may be down significantly, but it doesn’t mean the revenue from Oil has seen the spigot shut off!  The ruble is one of the few currencies that still pays interest on deposits…  Longtime reader, Bob, knows how much I like the ruble as a currency to hold, but when it loses 23% of its value in one year to the dollar, one has to scratch his balding head to be talked into holding it further…  So, Bob, sent me this note from Tass, the Russian news agency… Check it out…

“The Russian authorities are managing to minimize the volatility of the ruble exchange rate and to maintain macroeconomic stability, Kremlin spokesman Dmitry Peskov told reporters on Monday.

“The ruble is breaching psychological thresholds, but volatility is minimized by the efforts of our regulator,” a Kremlin spokesman said, commenting on the depreciation of the ruble.

He drew attention to the fact that “now any world currency is under serious negative pressure from a number of circumstances in the global economy.”

“This includes the dynamics of energy consumption and changes in prices for petroleum products and oil – of course, all this has an impact,” the official noted.

“But in general, if we talk about macroeconomic stability, it is being maintained, as the president [Vladimir Putin] stressed.”

Chuck again…  Sounds to me like the is need of some intervention… buy rubles, sell dollars…  Come on Russian Finance Ministry, you can do it!  There are other fears in traders’ collective minds these days that are causing this downward movement in the ruble… And those fears include the thought that if Biden won the election, that he would introduce more economic sanctions on Russia…  (I don’t make this stuff up folk, so contact the FT if you don’t like it)

In the overnight markets, all the non-dollar assets are rallying… Currencies are stronger VS the dollar, Gold is up another $5 in early trading, and the price of Oil soared overnight to $38.  OK, first the currencies… I do believe that this could be short-lived, in that it depends on who is the winner in the presidential election today. Then, Gold & Silver, are just fulfilling the prophecy of Chuck… HAHAHAHAHA! As if! And then the price of Oil… Well it appears that the Russians did have something up their sleeve, ala Bullwinkle, as they announced that they will delay the output reductions that our friends at OPEC (NOT!) had scheduled to start…  So, now you know why we’re seeing the dollar dissed by the non-dollar assets… 

OK… I’ll move on… Yesterday, I talked about how the European Central Bank (ECB) was probably going to go more negative with deposit rates at their next meeting, and that would weigh heavily on the euro, unless the dollar is getting sold like funnel cakes at a state fair. 

Then later yesterday morning, my attention was directed to Twitter, where there was quite a bit of space given to the story that ECB President, LaGarde was recently talking about how the ECB was developing a digital euro…  Some thought that this would be good news for the euro…  I’m not seeing it that way, but I guess in this world of opposites going on, that would qualify!  I did get a chuckle out of one person’s view in relation to the announcement… He said, “I would think that before you can issue a digital currency, you would have to prove that you can deal with positive rates”…. HAHA!

An article on is titled: “Out-of-work Americans are outraged that Congress has yet to pass another coronavirus stimulus deal”… 

The article is filled with tear-jerker stories about people who’ve lost their jobs and angry with congress for not shelling out more stimulus…  While I feel sorry for these people, I also want to point out that this is the slippery slope that I talked about months ago… Once you provide free cash to people, they’re going to want more, and then more, and more…   Once people figure out that they can make more and do nothing, than when they were working, they’ve gone down the slippery slope…

But then there are those that believe that money grows on trees, and that if they pick the money off, more will grow back… There really are those people, folks…  It’s called the Magic Money Tree…  To them it matters not what the deficit numbers are… or what the free money does to a society… It’s human nature that if you get something without effort, you’re going to see if you can get more… And that’s all I have to say about that… today that is…  So, I’ll move on…

The U.S. Data Cupboard had a big surprise for us yesterday… The ISM Manufacturing Index soared in Rocktober to 59.3 from 55.4 in September! WOW! Where’s all this manufacturing being done? Half the country is dealing with riots and chaos, and so forth… Oh well, they say manufacturing is going full steam, so we might as well go with it, eh?  Construction spending in Sept. fell from .8% gain in August to a .3% gain in Sept. So, that wasn’t that great…. 

Today, we’ll see the Rocktober print of Factory Orders… Now, if this data is weak, then you’ll have to come to the conclusion that I have and that is the ISM is full of dookie!  We’ll see soon enough… The experts think it will have risen in Rocktober from Sept…

To recap…  The currencies didn’t move very much at all on Monday, with the Dollar Index remaining at 94.04 all day…  But Gold & Sliver added to their early morning gains throughout the day on Monday, and ended up the day with gains of $17.20 and 44-cents respectively…  I want you all to remember that I told you on Monday that I expected Gold to have a good week, considering the election outcome delays that are forecast. 

For What It’s Worth…  I was at a loss this morning for a FWIW article, and then it came to me…  and then it was there in front of me… An article about Bank strength or lack of strength, its title is: Biggest U.S. Banks Aren’t as Strong as They Appear, says Group…  and it was here all the time, now click your heals together and say There’s no place like home three times!  Longtime reader, Bob, sent me this and you can find it on

Or, here’s your snippet: “The largest U.S. banks are less healthy than they appear, boosted by temporary accounting and capital-relief measures as well as massive market support from the Federal Reserve, an advocacy group said.

Although the six biggest banks’ leverage ratios reported at the end of June averaged almost 2 percentage points above the regulatory minimums, the actual average would have been only 0.84 percentage points above without the relief measures, Americans for Financial Reform said in a report Monday.

Regulators have allowed banks to delay the hit to their capital ratios from billions of dollars in loan-loss provisions they’ve put aside this year. Massive increases in their holdings of cash and Treasuries are also temporarily excluded from the calculation of the leverage ratio, which has become the binding constraint for the largest banks during the pandemic.

Even if firms wouldn’t be on the precipice of insolvency without the support measures, the allowances have let most banks continue paying dividends, according to the advocacy group.

“We’re not in a 2008 situation where major banks are facing collapse, but we’re going into an uncertain future due to the pandemic, and the big banks aren’t in as good a shape as they appear,” Marcus Stanley, policy director at Americans for Financial Reform, said in an interview.

In addition to the accounting and capital-relief measures, the banks have also benefited from the Federal Reserve’s unprecedented intervention in capital markets, the organization said. That boosted their trading income by at least $19.6 billion in the first half of 2020, which has also helped them appear healthier than they actually are, according to the report.”

Chuck again… I really think that the casino banks have been in trouble since September of 2019… Remember me going all ballistic on the Fed for not announcing who was receiving the daily injections of billions of dollars?  That began last year, and has continued on throughout the year… I’m just saying… 

That’s it for today, and unfortunately this week… I did have a dear reader, ask me to write a Pfennig On Friday with my take on the elections outcomes… But that’ll be a hard pass on that… sorry… I think it’ll be better for me if I don’t comment on the election outcomes, until Monday when I’ve had plenty of time to think about them…  I’ve already tuned in my SXM radio to the smooth jazz Christmas station… Probably the earliest I’ve even done something like that!  I love this station! And if people didn’t make fun of me, I would listen to it all year round! Just kidding, I’ve never really cared what people think of my choices!  I would think I would grow tired of it by March…  Make sure you get your “I voted” sticker today and wear it proudly! I wore mine for a couple of days, then decided to stick it up on my writing desk pictures display… Youngest son Alex just went to vote, and he came right back saying the line went around the building!  He’ll try again later…  Modern English takes us to the finish line today with their song: I Melt With You…  A classic 80’s song for sure!  I hope you have a Tom Terrific Day, and please get out and Vote, and while you’re voting, please think about Being Good To Yourself!

Chuck Butler


Are We In The 4th Turning?

November 2, 2020 

* Currencies & metals rally on Friday… 

* Gold looks ready to resume its upward climb… 

Good Day… And a Marvelous Monday to you… This will be a shortened week, with only today and tomorrow on the docket for a Pfennig… Wednesday morning I head to the hospital for an echocardiogram. It’s been a year since they did one, so I’m on the docket for one on Wednesday, and then on Thursday, it’s my monthly visit to my oncologist… That was some sad news this past weekend that 007, James Bond, had passed away… Sean Connery certainly had a full life, living to age 90… To me, he was the best to play the role of James Bond, in which he did it 7 times, and all were successful movies… My beloved Tigers took one on the chin to the Florida Gators on Saturday night… Speaking of Saturday night, we had more trick-or-treaters this year than we’ve had the last two years combined! The Strawberry Alarm Clock greets me this morning with their song: Incense & Peppermint…  “Who cares what games we choose?   Little to win but nothin’ to lose” A great 60’s song!

Tomorrow is election day… And one of the things I keep reading about is that the outcome of the election probably won’t be known for a few days, maybe even a week…  Well, they have until Jan. 20th, when the inauguration has to take place… So, what this is going to do is put an “unknown” into the markets… And class, what have I taught you through the years, about unkowns?   That’s right, traders don’t’ like them, and usually unknowns like this could cause major upheaval in the markets… But not to worry, I’m firm believer that Gold is set to rally big time in the coming days… And if I’m wrong about the election results taking a few days, Gold will still be in the batter’s box ready to hit the long ball… Let’s hope that the election results don’t take days… Remember what that was like after the Bush/ Gore election race?  It made the U.S. look like a 3rd world country, with the hanging chads, and legal proceedings and how long it took to finally announce a winner…

OK… So, the currencies and metals both rallied on Friday, while stocks got sold like funnel cakes at a state fair… We could be seeing a crumbling of the outrageous values in the stocks, as I’ve seen something the last couple days last week, that is a complete reversal of what was going on with stocks… What had been going on is that individual stocks would rise in the face of bad earnings… And last week I saw a couple of stocks that had good earnings get sold… Something is going on here, folks… I sure hope you have your stop orders in place…

Enough on the stock jockeys’ problems…  Non dollar investors have had enough of their own problems to worry about lately… So… Gold rose $11.30 on Friday, to close at $1,879.60, and Silver rose 41-cents to $23.74… I was listening to my fave writer, and speaker, Grant Williams and his podcast that he does with Stephanie Pomboy, of Macro Mavens, on Friday, and they had the Gold legendary John Hathaway on to talk about Gold… I learned a new word during the podcast… Grant Williams called John Hathaway a “doyen”…  For those of you who were like me and had to look up the word, it means: “ the most respected or prominent person in a particular field.” And just from listening to John Hathaway talk, I had to agree! 

John Hathaway didn’t  get into talking about the price manipulators and instead preferred to talk about how this move backward in Gold was due, and now Gold is ready to move higher once again…  So… there… a different point of view, for you….  You can find Grant Williams podcasts on Apple podcasts…

In James Rodgers’ book Hot Commodities, he has a chart that lists the Bull Markets for Commodities throughout history… And if you average them all up, the average Bull Market for Commodities lasts between 17-20 years… This new Bull Market for Gold (a commodity) began in 2015…  So, we’ve got a long way to go… It’s too bad the price manipulators don’t read books like that, because then they would see that they are fighting a losing battle! 

Ok, last week a dear reader sent me a note, and asked me if I knew where he could find data for M2… Unfortunately, the answer is no… So, I rely on different sites to give me ideas what M2 is doing… M2 represents money supply growth, the amount of paper dollars floating throughout the economy, and has grown by about 30% this year.  Now, before there were price manipulators, you could almost trace the movement in Gold with that of M2… With that in mind, recall last week when I said, “Gold should be at $2,500 right now?” Well, if you look at M2 increase, that’s exactly where Gold should be given its historical relationship with M2… 

Unfortunately, these days, these days I sit on cornerstone, and count the time in quarter tones to ten… My friend, don’t confront me with my failures, I had not forgotten them….   Ahhh, one of my fave Jackson Browne songs this morning, of course he sings better than I do, but then I don’t care… I sing because I love to sing… And before the radiation on my jaw tore up my mouth, and throat, back in 2011, I used to have a pretty good voice… These days? Not so much!

Anyway, what I was saying before I went all rock-n-roll on you, was that unfortunately, these days, there ARE price manipulators…  But one of these days, their games they play with Gold & Silver, will be brought to a halt… And then…. In the words of Buzz Lightyear… “To Infinity and beyond!”

Well, the euro found a way to add about ½-cent on Friday in the fave of all that dollar buying last week… But I doubt the good times for the euro are going to be something that we continue to talk about, because The European Central Bank (ECB) may have left rates unchanged at their last meeting, I doubt that relative calm is not going to last, and the ECB will be going more negative with interest rates at their next meeting…

Negative rates haven’t hurt the Japanese yen, or Swiss franc… yet that is… So, you kind of see what the ECB is thinking, right? “if The Japanese and Swiss can keep investors confused, then we can too, and if the Bank of England is going negative with rates soon, we will be in good company”…  But what they aren’t thinking about is the unintended consequences… I told ou my feeling about negative rates in last Monday’s Pfennig, so I won’t rehash that, except to say, “Please do not allow our Cartel, I mean Fed Reserve, to go negative here in the U.S. …

So… either the dollar bugs go into hiding for a while, to allow the euro and other currencies to rally based simply on dollar weakness, or… The dollar bugs hold steady Eddie…  I’m thinking that with all the unknowns and currency printing that the dollar bugs are in trouble… But I honestly don’t have a strong feeling either way here… So you’ve got that going for you! HA!

The overnight markets have kept things pretty steady Eddie for the currencies, but… Gold had gained $9.70, and Silver has gained 30-cents in the early trading today, adding to their Friday gains, so it appears that my thoughts on Gold this week are coming to fruition? 

The U.S. Data Cupboard had the Sept prints of Consumer Income and Spending on Friday… Both saw gains in Sept from August, and that had me scratching my bald head… I get the Spending data, it was back to school time in Sept (Instead of August, because of the delays in starting school) but the Income gains? When the Gov’t’s mental giants were sending out checks to the unemployed that were greater than the money the unemployed made, I could see where there would be income gains… But now?  Oh, well, it is what it is, right? 

This week’s Data Cupboard will be busy with data prints like the ISM manufacturing index, Factory Orders, the ADP Employment Report, the Weekly Initial Jobless Claims, and finally on Friday, the Jobs Jamboree… So, as I see things, the election results will be up in the air, and that will dominate the markets’ collective minds, not the data… 

For What It’s Worth…  Back in 2002, I received a Christmas present from our Marketing Director, David Galland… It was Stauss & Howe’s 4th Turning book… I thought, at first, I guess there’s something in here that he wants me to learn…  But it wasn’t that at all… The book written in 1997, told of the 80-year cycles that bring about things… Anyway, this is a long article that can be found here :

Or, here’s your snippet: “The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II. 

I read The Fourth Turning in 2006, after seeing it described in John Mauldin and Doug Casey’s newsletters as an uncannily accurate assessment of American history based upon generational configurations which recur on eighty-year cycles, a long human life. Strauss and Howe wrote the book in 1997 and used their generational theory to predict the Crisis that would begin in the mid-2000’s and come to an indeterminate climax in the mid-2020’s.

As a student of history, the theory spoke to me. I have been writing articles since 2009, using the Fourth Turning as a guide to interpreting what has been happening and what might happen as this crisis period accelerates towards its violent culmination. The quotes above perfectly capture exactly what has happened since this crisis began in September 2008, with the Fed/Wall Street created financial collapse. The existing social order is disintegrating, but they are willing to destroy the country rather than relinquish their wealth, power and control.

Strauss & Howe identified the core elements of this Crisis as debt, civic decay, and global disorder. No one can argue the severe distress engulfing the nation and the world traces its origins to these core elements, with the catalyst for this Crisis being the 2008 central banker manufactured financial collapse. Nothing has been normal since 2008. And 2008’s epic implosion was driven by the disastrous financial, political and military decisions implemented by the puppets of the Deep State from 2000 onward, with the Federal Reserve obligingly creating bubble after bubble as the “solution” to the previous bubble.

And now we are here again, in the midst of the greatest bubble in the history of mankind. A bubble of willful ignorance. The obliviousness of most Americans to the danger awaiting them is akin to the day before Fort Sumpter was bombed, the day before Pearl Harbor was attacked, or the dinosaurs unaware of a giant meteor rushing towards the planet and about to transform their future in a challenging way.

Real hardship has beset the land, for those not in the .1% or Deep State lackeys being rewarded for propagating mistruths, outright lies, fear, and propaganda on behalf of their oligarch benefactors. These apparatchiks mainly consist of corrupt politicians, central bank lackeys, mainstream media hacks, neocon warmongers, surveillance state traitors, and big pharma captured health “experts”. The severe distress does involve class, race, nation and empire, but most of the distress has been artificially created by those pulling the strings – Bernays’ invisible government manipulating the masses.”

Chuck again… Remember this book was written in 1997… And I thought I had a feather in my cap when I  was the first to talk about the housing bubble in 2003!

Market Prices 11/2/20: American Style: A$ .7040,  kiwi .6627, C$ .7521, euro 1.1645, sterling 1.2929, Swiss $1.0886, European Style: rand 16.2564, krone 9.5530, SEK 8.9000,  forint 314.50,  zloty 3.9521,   koruna 23.3026, RUB 79.36, yen 104.69, sing 1.3655, HKD 7.7518, INR 74.41, China 6.6830, peso 21.24, BRL 5.7398,  Dollar Index 94.04,  Oil $35.00,   10-year .85%, Silver $24.04, Platinum $855.00, Palladium $2,232.00, and Gold… $1.889.30

That’s it for today…  The sun finally came out on Saturday, and the temps were a bit warmer, which allowed me to sit outside and begin to read my new Jack Reacher book…  We’re having our first freeze of this season, as it is 28 outside this morning… BRRR….  The gout has attacked my left elbow once again, and since I use my left arm to hold my cane to walk, I can barely get around this morning… if you’ve ever had the gout, you know how painful it is… I take a medicine that’s supposed to keep my uric acid in check, but from time to time it fails to do its job…  Ok, this will be a busy week for me…  Have you made your plans to vote tomorrow?  I voted early, so don’t allow the thought of long lines at the voting venues, deter you… Get out and Vote!  Earth, Wind & Fire take us to the finish line today with their song: September…  This song gets me dancing in my chair… I hope you have a Marvelous Monday, and Please Be Good To Yourself!

Chuck Butler



More Dirty Deeds Done Dirt Cheap!

Rocktober 29, 2020

* an ugly day for all asset classes but Bonds… 

* Has the Fed run out of Firepower? 

Good Day… And a Tub Thumpin’ Thursday to you! When is the sun ever going to make an appearance here again? This is getting so N.W. that it’s making me feel depressed… I had to go to the wound center yesterday, and it was so cold out, I had to break out my winter coat! In Rocktober! And now we’re supposed to be getting pelted with rain from Zeta that made landfall yesterday… So… we’ve got that going for us! I know there are people around the Gulf that have has a horrendous Hurricane season, but I’m not on the coast, at this time of year. And I’m sick of not seeing the sun! The Chi-Lites greet me this morning with their song: Oh Girl…  (I wouldn’t blame you if you left me now) 

What a nasty day yesterday for Gold & Silver… Gold closed the day down $31.50 to $1,877.10… And Silver closed the day down $1.01 to $23.44…  A very ugly day… That began in the overnight markets when the ECB announced that they were keeping rates unchanged…  Of course, what the heck that has to do with Gold is beyond me… But the price manipulators saw this as a great opportunity to sell Gold Short…  Dirty Deeds Done Dirt Cheap! To illustrate this… only $7.25 of Gold’s $31.50 loss was due to dollar strength… That leaves $23.85 for sellers…  Do you know of anyone selling their Gold?  

And to start today, Gold is down $4… so the selling hasn’t stopped, I would think that the price manipulators have gotten Gold’s price down to where they can make a profit, and then turn around and wait for the next big move up…  I guess we’ll have to see as the day goes on… 

But… the thing this pull back has done is open up a buying opportunity for those out there that have procrastinated and not bought yet, or for those of you who realize that you don’t have enough Gold or Silver… James Rickards says that investors should allocate 10% of their investment portfolios to Gold… I’m of the opinion that when an asset class is in a bull market, that the allocation should be moved higher to 15-20%… 

Speaking of the Bull Market for Gold…  Mr. Rickards gives us some history that I found in the 5 Minute Forecast yesterday, that I gave you the link for last week…  here’s Rickards with his history of Bull Markets… ““The first great bull market (1971–1980) produced gains of 2,100% in nine years. The second great bull market (1999–2011) produced gains of 670% in 12 years.

“The third great bull market began in 2015 and is still underway,” says Jim. “Gains so far in the new bull market have been about 100% in five years.”

Assuming “a simple average of the first two bull markets would produce expected gains of 1,400% in 10 and a half years.

“Starting from a base of $1,050 per ounce,” Jim says, “if the new bull market tracks the average of the prior two, we should expect to see gold prices at $14,700 per ounce in early 2025.

“In fact, the rally is not constrained by the average and could easily exceed the record bull market of the 1970s.”

Chuck again… Well that concludes our discussion of Gold today, folks…  but from $1,888 to the prices Rickards just talked about, is quite a move, ? … now on to other asset classes!

In the overnight markets, the dollar bugs have gone the whole nine yards in buying dollars, and the euro is in danger of losing the 1.17 handle, the Aussie dollar (A$) has lost more ground, and the only currency that has held its ground is the Japanese yen… Go figure… the currency from a basket case country is the only currency holding its ground… Hmmm… 

When I left you yesterday morning, the dollar bugs were dancing in the streets once again, but during the day, their dancing abated, and the euro was able to claw back of its lost ground…  But, the Petrol Currencies of Norway, Russia, Canada, Brazil, (and others) can’t find a bid these days, with the price of Oil slipping in price with every 24 hours passing by.

And the Aussie dollar (A$), just kept giving back recent gains as the day went along yesterday, as it was a double whammy for the A$… First it got caught up in the dollar buying early in the morning, and then traders woke up to the fact that Aussie exports to China were being boycotted by the Chinese… I said yesterday, that I thought this news would be bad for the A$, and it has turned out to be just that!

And I don’t like to talk about stocks… But OMG has the trap door been sprung under the stock jockeys? Yesterday’s losses were the broadest since June, when back then when we were hypnotized by Dr. Fauci, and the doomsayers…  Well, according to the pundits that follow stocks, they all say that the recent run up of positive cases has investors shaking with fear…   

And the stock market futures are in the red again this morning, so the selling there hasn’t stopped either…  You know, as I look at the markets, the only asset class I see that has held steady Eddie through all this selling is Bonds… The ten year Treasury’s yield is steady at .77%…  I saw a blub online the other day with a stock jockey telling people that they should sell bonds and buy stocks…  Really?  I’m not enthusiastic about buying Treasuries with that low of a yield, but the bonds I do own, I’m not selling, that’s for sure! 

I saw a great sign yesterday… It said: “ There is a spike in COVID cases, because there’s a spike in Testing!  If we had more IQ tests, there would be a SPIKE in Morons!”

Now that’s not only funny, it’s true… I tell my kids all the time that there are more people in the world, and therefore there are more idiots…  

Even with the dollar surge the yesterday morning, according to the folks at, “The U.S. currency is near its lowest level in 27 months and is down about 11% from its 2020 peak against a basket of its peers, with Goldman Sachs, UBS and Societe Generale among the banks forecasting more losses.”

Makes sense to me… But the gains for the currencies have come in bits and spurts, and nothing that feels like a trend, just yet…

Well… remember Bill Dudley?  He was the President of the Fed NY from 2009 – 2018… And now he’s an economist, who had this to say to Bloomberg, “Central bank officials aren’t bluffing when they say that only government spending can rescue the U.S. economy.” 

Of course I would argue that even that statement is somewhat incorrect… As the Gov’t can’t help us… Oh, there are those in the U.S. that believe that helicopter money will save us…  And I’m telling you now, so maybe you’ll listen to me later, that printing fake dollars, as one of my fave economists, Bill Bonner, calls helicopter money, will not save us…  It’s simple economics folks… too much of something lowers its value… So now take that to dollars… too much fake money, will lower its value… And when it lowers its value, it lowers the buying power that citizens that hold dollars have… And to me, that’s like a additional tax… So… while you might have some extra cash in your pocket, what’s it going to buy? And that’s where the idea of helicopter money gets grounded…

In addition, you add more to the national debt, and with every Billion of debt that gets added to the national debt, the closer we get to the whole shootin’ match collapsing!  But don’t let that get in the way of getting “free cash” from the government! 

OK, I’ve to to talk about something else or my blood pressure is going to go through the roof!  At doctor’s offices they always take my blood pressure, and then look at me and say, “You’re doing a great job keeping your blood pressure in check”… And I always respond.. “Better living through chemistry!” HA!

But fear not about losing buying power due to our national debt being so monstrously high… Ted Cruz is here to save us…  check this out: “Republican Sen. Ted Cruz says the mounting national debt will reemerge as a major concern for the GOP.”  Now? Now it’s going to reemerge as a concern?  I do believe that we’re way past the point of being concerned about it, Mr. Cruz…  But if you want to see what you and your henchmen, I mean fellow congressmen & women, can do about getting inflation to rise you would be helping out the Cartel, I mean the Fed… for they haven’t got a clue why inflation is rising right now…    I’m just saying…

Bill Dudley, the same guy above, also told Bloomberg that “The Fed Is Really Running Out of Fire Power”…  No, duh!  Interest rates are near zero, they can only go to zero, before being negative, so that pretty much tells us that they are near the end of the road… The Fed has bought Treasuries, bought Munis, bought ETF’s, and Corp Bonds, and the economy still isn’t back to normal, which before the pandemic hit we, as a country, had settled for a new norm in GDP which had averaged about 2.1% for the last 10 years…   But, what was I talking about? Oh, that’s right, the Fed running out of Fire Power…  That would be a good thing in my books… The Fed not being able to screw up price discovery any more would be a great thing!

OK… time for class… what does price discovery mean?  According to Investopedia, it means: “Price discovery is the overall process, whether explicit or inferred, of setting the spot price or the proper price of an asset, security, commodity, or currency.”

And I believe that the Fed has destroyed price discovery in almost all markets… Stocks, bonds, and so on… They did this by buying stocks, bonds, etc. in the markets place at whatever price, and creating a short squeeze in the asset…  This is so wrong… The Fed was supposed to be the lender of last resort for the member banks, not the buyer of last resort… I really feel that this has got to stop…

The U.S. Data Cupboard has the 3rd QTR GDP first print this morning… Yesterday, I went through the math and explained how the 30% forecasted gain for GDP wasn’t the same as the 30% drop back in the 2nd QTR… But I doubt the traders will do the math, and start singing, “We’re in the money, that sky is sunny, Old Man Depression you are through, you done us wrong.”  But they’ll be so wrong that no one will notice!  

We’ll also see the Weekly Initial Jobless Claims which the previous week showed a big drop in the number, that surprised me… So, no surprises this week…  There’s just so many people that have dropped off the unemployment roster, these days… you have to wonder if we’ve saturated the employment roster of people?  about 150 Million people did work before the pandemic hit…  I’m just asking… 

To recap… it was an absolutely ugly day in the markets, stocks, currencies, Oil and metals all got sold down the river… The only asset class to hold its ground was Treasuries… Hmmm…   Gold got sold by $31 yesterday, and is down another $4 in the early trading this morning…  A buying opportunity? Chuck thinks so… 

For What It’s Worth…  Well… Since I spend a good part of the day talking about Gold today, I thought I might as well end it with another discussion of Gold.. .This one I pulled from Ed Steer’s letter this morning… you can always find Ed here:… And the article is about China’s consumption of Gold and it can be found here: 

Or, here’s your snippet: “China’s gold consumption rose 28.7% in the July-September period from the previous quarter, the China Gold Association said on Tuesday, supported by a stabilising economy and a rapid recovery of the wedding market.

Consumption in China in the first nine months of 2020 stood at 548.09 tonnes, down 28.7% year on year, the association said on its website, which implies third-quarter consumption was 224.8 tonnes, down 8.2% from a year earlier.

Demand in the world’s top gold user had been hit early in the year as coronavirus-led lockdowns and high prices for the precious metal kept retail buyers at home.

“Spot gold prices gained around 24% in the first nine months of 2020, but have eased about 8% from an all-time high of $2072.50 notched on Aug. 7.


Consumption has gradually recovered since the second quarter, fuelled by Beijing’s stimulus measures.

With the sustained and stable recovery of the domestic economy and the rapid recovery of the wedding market, gold consumption has picked up significantly,” the association said.

Sales of gold bars and coins in the third quarter increased by 66.73% from the previous quarter, the association said.”

Chuck again… physical demand is still strong in Gold & Silver., folks.. .the bull market for metals is in place, don’t let an engineered take down scare you from what’s ahead for Gold… I’m just saying.. 

Market  Prices 10/29/20: American Style: A$ .7026,  kiwi .6622, C$ .7482, euro 1.1705, sterling 1.2943, Swiss $1.0960, European Style: rand 16.4514, krone 9.5311, SEK 8.8988,  forint 314.97,  zloty 3.9655,    koruna 23.4201, RUB 78.23, yen 104.24, sing 1.3663, HKD 7.7518, INR 74.43, China 6.7116, peso 21.43,  BRL 5.7224,  Dollar Index 93.69,  Oil $35.87,  10-year .77%, Silver $23.08, Platinum $860.00, Palladium $2,216.00, and Gold.. $1,873.30

That’s it for today… and this month! Rocktober will turn to November, my most disliked month, when we next talk on Monday…  When I used to have a job, my assistant was Christine, who’s husband was a basketball coach, and the basketball season would begin in Nov. So, she and I would commiserate together about how we disliked November!  I have no one to commiserate with any longer, so I’ll just hunker down and try to forget about what month it is…  Well… Saturday is Halloween! Will you be doing the Monster Mash?  I hear that it will be a bit warmer on Saturday, which is good… I’ll sit outside and give out treats, to the kids, who venture out.. The doomsayers say Trick-or Treating will be dangerous… I don’t think you can take this away from the kids, period.! The Temptations take us to the finish line today with their song: Papa Was A Rolling Stone…  And with that I’ll bid Rocktober goodbye, and hope you have a Tub Thumpin’ Thursday, and a haunting Halloween on Saturday… My beloved Tigers play Saturday night, so I might have to move the extra TV we have outside! Go Tigers! Please continue to Be Good To Yourself, and I’ll talk to you again on Monday… God willing and the Creek don’t rise… 

Chuck Butler


The “Trading Shutdown” Gets Uprooted!

Rocktober 28, 2020

* No movements yesterday, but major moves overnight

* Chuck does some math for you… Better check his work! HA 

Good Day… And a Manfred The Wonder Dog Wednesday to you! Man what a treat yesterday, having little Evie here with us for the day! We played “I see you”, and she was all over the place now that she walks… She has the cutest smile, that she can show off, whenever, you least expect it!  Now, I guess, I’ll have to wait until she begins to talk… I can always get her laughing when she picks up her monkey, and I make monkey noises… Now, she does her own monkey noises… So funny!  The O’Jays greet me this morning with their song: Back Stabbers… Whenever I hear this song, I’m reminded of the one back stabber I ran into in my life in business…  Grudges never die!

And neither do old rivalries… Ok, to set this up, Roosevelt H.S. (my school) and Southwest H.S. were about 5 miles about, and we were like Mizzou/ Kansas in the dislike we had for each other…  So, a few years ago, I came out of the grocery store and there was a man sitting at a table full of cook books, and he said, “ Would you like to buy a cook book written by the mothers of Southwest H.S.?” I said, “I wouldn’t touch that with your ten foot pole!” and he yelled, “You went to Roosevelt didn’t you?”  Old rivalries never die…

OK… Well, that supposed “Trading shutdown” disappeared in the overnight markets last night… The European Central Bank (ECB) got things started by announcing more stimulus for the Eurozone economy, but held interest rates at their current negative level.  This news sent the euro to the woodshed, and the rest of the currencies got sold too. Gold has given back over $20 this morning, and things just look like there’s something else going on that’s not fundamentals trading… 

According to Kitco, this morning, Gold’s $20 loss so far today consists of $9 of loss due to dollar strength, and that leaves $11 of loss to “sellers”… And we are expected to believe that Gold owners lined up this morning to sell their Gold because the ECB left rates unchanged? Give me a Break!  This smells like, walks like, talks like and looks like a classic example of the price manipulators piling on to Gold’s losses, with short sales, to make it look as though the whole shootin’ match of losses is because of dollar strength… 

  In yesterday’s trading, the dollar got sold, the euro rose, and Gold did gain about $5 on the day to close at $1,908… I went to bed last night, after watching the World Series come to an end with the Dodgers victorious, and everything was looking good… But then came the news, early this morning, that the dollar bugs were buying dollars, because the ECB left rates unchanged…  My goodness, what the heck happened here? 

I’m just not buying the thought that because the ECB left rates unchanged that everything but dollars is getting sold?  Come on… I didn’t just fall off the turnip truck!  I’m going to stop talking about this because I’m really getting all keyed up, and I might say something that gets me into trouble with you dear readers! 

There was one piece of news yesterday that really had me taken back on it’s content… Seems, the Chinese are getting very sticky with who they’ll do trade business with…  Remember when China’s boom was going on, and they took any and all exports of raw materials from Australia?  Well… the news yesterday is that the 3 major Chinese ports were instructed to Not Accept Any Australian Coal shipments, even if the trade has been previously concluded…  There has to be a reason for this change of horses in the middle of the stream for the Chinese…

Seems the Australian recently called for an investigation regarding where the COVID-19 virus orginated… And The Chinese went all Tump on the Aussies, boycotting all Australian imports by China…  Yowsa! Are you kidding me?  Ok, Chinese you’ve got to learn that “sticks and stones may break my bones, but words can never hurt me!”  I’m just saying.. .

The news didn’t faze the Aussie dollar (A$), as it remained above 71-cents throughout the day , but has gotten caught up in the dollar buying  this morning., and has lost about 1/2 cent… One would think that it would hurt the A$ in some way… 

Ever since our Marvelous Monday, when I listed the economic prints due this week, and mentioned the 3rd QTR GDP, I’ve been thinking about how to talk about this when it happens tomorrow… You see, what I’m talking about is the idea that 3rd QTR GDP will have gained 30%… I know that the dollar bugs will react as though things are getting better, and the economy is out of the woods… But, cooler heads should prevail here… And realize that when something goes down 30%, when it comes back 30%, it doesn’t bring the something back to the original point… 

Here’s the math… Say you own a stock that you bought for $100, and it loses 30%, that brings the stock’s value down to $70… but then it reverses and comes back 30%…  You’re still down… Because 30% of $70 is $21, which makes your stock now $91…  See?  See how this works? 

Well, transferring this math over to GDP… Even if the 3rd QTR GDP does come back 30%, it will still be more than 4% below its level at the end of 2019… And that would be more than the farthest the economy ever was from its prior peak in the Great Recession.  

So, will traders take the time to do the math, so to speak? Nah… they think that they don’t have time for that, and 30% is 30%, and that’s good!  Well, it is “good”, but does not totally reverse the rot on the vine …   I got some of this information from the Brookings Institute, which you can Google and go to…  So, are you going to argue with the Brookings Institute? I didn’t think so… 

The U.S. Data Cupboard had some surprises for us yesterday… Sept. Durable Goods and Capital Goods Orders were stronger than expected, and that surprised me… Of course, the CAPEX (Capital expenditures) was not as strong as it should be, but it was stronger than expected, so I’ll give it 1/2-credit…   The Case/ Shiller Home Price Index, shot higher in August to a 5.75% increase VS 4.8% increase in July… This one didn’t surprise me, one iota… And the Stupid Consumer Confidence Index slipped a tiny bit from 101.3 to 100.9… 

To recap…  The supposed “Trading shutdown” got uprooted in the overnight markets last night.. The ECB left their negative rates unchanged, and that sent the euro to the woodshed, where it dragged all the other currencies, and Gold is getting sold this morning by more than $20… Chuck isn’t buying the thought that the ECB leaving rates unchanged caused all this damage…  The Chinese are boycotting Aussie coal imports, and Chuck does the math, on GDP… You won’t want to miss that! 

For What It’s Worth…  Talk about timing! Yesterday I talked about China’s renminbi/ yuan and how I viewed it as a currency to be reckoned with going forward. And lo and behold, the Good Folks at GATA sent me a link to an article about how the renminbi is not ready for prime time… And it can be found here:

Or, here’s your snippet: “The yuan is higher than it has been in more than two years, and foreigners are suddenly showing interest again in holding the Chinese currency.

Earlier in the decade Beijing brought the yuan into the spotlight through an aggressive effort to take the currency overseas through swap agreements with foreign central banks and offshore bond issuances denominated in the currency.

This time foreigners are coming to China to get yuan. Chinese assets stand out at a time interest rates in much of the world are at zero or below and many currencies are sagging. Beijing has meanwhile been making access easier for foreign buyers.

Yet for all Beijing’s ambitions of cracking the hegemony of the U.S. dollar in the face of Trump administration sanctions, the yuan still has a long way to go. While this week’s meeting of the Communist Party Central Committee looks likely to take up the cause of yuan internationalization, the currency will not be taking the greenback’s place on the world scene any time soon. …

What all this seems to imply is that China is indeed fully aware of the risk of conducting most of its international trade and investment transactions in dollars and of holding most of its foreign assets in dollars. The way to reduce this dependence, beyond diversifying into use of other foreign currencies as has also been happening, is to boost the yuan. …

Available data suggests that after plunging abruptly in 2015, international use of the yuan started to recover just last year. This year, foreigners have been snapping up yuan to put into domestic Chinese bonds and stocks, with holdings of such bonds alone rising by more than a quarter to 2.8 trillion yuan ($419.3 billion).

It goes without saying that the general weakness of the dollar since the COVID-19 pandemic began pounding the U.S. economy in March has been a blessing for the Chinese authorities’ attempts to attract inflows, boosted by the juicy interest rate differential between the two nations’ benchmark government bonds.

Looking deeper into current international use of the yuan, trade settlements in the Chinese currency have slightly picked up since last year, especially in services transactions.”

Chuck Again… So… I was wrong about the timing… But will I be wrong about the ultimate goal for the renminbi? Only Time will tell… eh?

Market  Prices 10/28/20: American Style: A$ .7075, kiwi .6658, C$ .7536, euro 1.1725, sterling 1.2952, Swiss $1.0971, European Style: rand 16.3853, krone 9.3480,  SEK 8.8415, forint 313.03,  zloty 3.9453,   koruna 23.3827, RUB 76.72, yen 104.36, sing 1.3647, HKD 7.7499, INR 73.72, China 6.7051, peso 21.31, BRL 5.5447,  Dollar Index 93.50,  Oil $37.72,  10-year .76%, Silver $23.93, Platinum $868.00, Palladium $2,289.00, and Gold… $1,888.10

That’s it for today… Congrats to the Dodgers for winning the World Series… It just shows to go ya, that Money Can Buy You Love, I mean a World Series!  So, LA has the baseball and basketball champs… Money, money, money…  Ok, enough of that!  I got a decent night’s sleep last night, so I’m back to normal… Thanks to all you dear readers for listening, and not filling my Pfennigs Replies box with emails telling me how awful a person I am regarding my take on the virus testing. I did get a reader who asked me what “that” had to do with markets and economies… Oh well, maybe from now on I’ll keep this letter to just about markets and economies…. Nah! it’s my letter, and I’ll talk about what I want to talk about!  George Harrison takes us to the finish line today with his song: While My Guitar Gently Weeps…  For those of you who don’t know, Eric Clapton did most of the guitar work on that song… This of course was before Eric began courting George’s wife… And so on….   I hope you have a Manfred The Wonder Dog Day today… And will continue to Be Good To Yourself!

Chuck Butler


Negative Rates & Digital Currencies Coming To A Country Near You!

Rocktober 27, 2020

* Traders go into “shutdown” ahead of the election

* Chuck has a mea culpa for you today, you don’t want to miss that! 

Good Day… And a Tom Terrific Tuesday, and Manfred The Wonder Dog Day to you! I think going forward I’m going to give Manfred his own day, on Wednesday…  It’ll change to a Manfred the Wonder Dog Wednesday! So back-to-back days of an old cartoon favorite of mine…  Well, Mrs. Barrett was confirmed as a Supreme Court Justice… You know, politics aside, I think this person was the best qualified judge to be confirmed in over 50 years of me following this confirmation process, that has turned into a circus, and not a fun one. But Mrs. Barrett showed great composure during the somewhat questionable questions posed to her… Congrats Amy Coney Barrett!  The Dodgers have a 3-2 games lead in the best of seven World Series that will resume tonight. Come on Rays!  Journey greets me this morning with their song, and my fave Journey song: Girl Can’t Help It…

Well, I switched on the Monday Night Football game last night, just to see what the new stadium that was built for the Rams, looked like… I’m not into the NFL as much as I used to be… I don’t think I have to explain to you why, I soured on the NFL… Shoot Rudy, I even stopped playing fantasy football! And that’s all I’ll say about that…

So… I think traders and the markets have gone into a semi-shut down ahead of the election next week…  When I looked at the currencies and metals last night, the euro  was trading in the same clothes it had on in the early morning… 1.1820…  Gold was able to pound out a small gain on the day, rising a whopping $1.00… Silver couldn’t find a bid, and lost 34-cents on the day… Which means the closing prices on Monday were $1,903 for Gold and $24.34 respectively…

And to cement that thought even more, in the overnight markets and early trading there’s been little to no movement… The currencies are all (except the Petrol currencies) up but by pips not cents or dollars… The Petrol Currencies are the opposite with them down pips, because the price of Oil has slipped once again… Late last week Oil was trading with a $41 handle, and this morning it’s back down to a $38 handle…  

And the same, little to no movement, holds true for the metals too.. Gold is up 40-cents and Silver is up 11 cents this morning…  I’ve seen this shutdown of trading before when we got close to an election… So, this doesn’t surprise me, except for how early they began this shutdown… 

I have a big mea culpa this morning regarding something I said 10 years ago, so we’ll get to that in due time… But first, I want to talk about my call earlier this year about the Fed going to negative interest rates…  My fave writer, Grant Williams, and his letter Things That Make You Go Hmmm, (TTMYGH) did a very in depth review of negative interest rates in his letter this week…  You know what I found out in his letter, is that all of the countries that have negative interest rates, were all talking a year prior, and made statements like “negative interest rates don’t work”… But then a year later, they all went negative…  The Bank of England (BOE) is the latest to go through this process…  A year ago, they issued a statement that did not speak well of negative rates…

But what did we learn last week? That the BOE was seriously considering implementing negative interest rates…  I tell you all this to bring us to this….  What normally takes place in the U.K. usually ends up coming ashore here in the U.S. about 6 months later…  Which. give or take a month due to the BOE dragging their feet, would put negative interest rates here in the U.S. next summer… And don’t forget the Fed Heads have made it clear that they are not considering negative rates… Yeah, and I have a bridge to sell them!  As if negative rates aren’t bad enough… here’s comes the point that makes the cheese bind… “Andy Haldane, a member of the Monetary Policy Committee (MPC), the UK’s equivalent of the FOMC suggested that to achieve properly negative rates, the abolition of cash itself might be necessary.”

Do you recall me telling you that a couple of months ago? That along with negative rates we would see cash outlawed, and the next day your bank account won’t show dollars any longer… It will be digits…  And with that the very last of our civil liberties are thrown out the window….   And again I borrowed this from Grant Williams TTMYGH this week,  It will finish off this discussion with a quote from (Ambrose Evans-Pritchard): “Five years into the global experiment with negative interest rates, we know enough to conclude that it has destructive anthropological effects and does more economic harm than good.

Negative rates do not stimulate lending for useful economic activity. They damage “good” banks by eviscerating their bread and butter business model, but help “bad” banks play the casino.

They can increase precautionary savings by households and therefore drain money out of the real economy. They stretch public tolerance of overmighty central banks to near breaking point.”

Ok.. Chuck again… let’s move on to the mea Culpa I told you about above…. So… How many of you were in the audience of the Orlando Money show in 2011, when I shocked everyone by saying that by the end of the current decade we would have a new currency regime, and that the Chinese renminbi would be taking over the reserve currency status?  I not only talked about it back then, but wrote about it… I think the first time I wrote about it I had about 100 people unsubscribe from my letter… Did that deter me?  No… But looky here, we’re coming down to the end of the decade, and….  No currency regime change… Was I wrong, or was my timing just wrong? 

China has done a lot of things to open up their markets, and get cross border currency exchanges working in the past 9 years… And this quote from the People’s Bank of China Gov. Yi, last weekend reminded me that I hadn’t talked about it much lately… Let’s listen in to what Mr. Yi, had to say…

“People’s Bank of China Governor Yi Gang said that promoting broader use of the yuan will continue alongside the opening of markets. “The regulator’s main job is to reduce restrictions on the cross-border use of the currency, and let it take its own course,”

Chuck again… Does it sound to you like China is backing off their quest to become a world leader in currency use?  It sure doesn’t to me… .And that brings me to my error in timing… I should have known that the Chinese have very long range plans… 100 years plan to be exact… Not that the currency regime change would take 100 years… But that’s how they view things, in long ranges…  And 10 years is NOT a long range…  It may seem long if you’re in prison serving 10 years for manipulating currency markets, no wait! Nobody goes to jail over that! What am I thinking?  But you get the point… 10 years is not a long range…

Oh, and one more thing on China… Their ownership of U.S. Treasuries have fallen to 2017 levels… They’re going the wrong way there folks…  I’m just saying…

The U.S. Data Cupboard will have the Sept. Durable Goods and Capital Goods Orders…  After a brief recovery I’m thinking that we’ll see this data fall back… sort of like the red coat military, fire, and fall back! The Case/ Shiller Home Price Index for Aug. will also print today, I’m expecting home prices to be rising given you can get a 30 year fixed rate mortgage for 2.25% these days…  And finally the stupid Consumer Confidence will print…   So, a busy day, but… as I said above, I do believe that traders have gone into a “holding pattern” ahead of next week’s election.

To recap… The currencies and metals didn’t get out of bed and remained in their same clothes all day yesterday, and through to this morning…  The euro failed to launch, and Gold gained a whopping $1.00….  Chuck reminds everyone what he said a couple of months ago, and what he said 10 years ago… One is yet to come to fruition, and other was timed badly… 

For What It’s worth…OK… a couple of weeks ago I wrote about all the rents and mortgage payments that were being waived and how that would end up hurting the bond holder…  Well, according to Reuters, that easy living is just about over, and that article can be found here:

Or, here’s your snippet: “It has been a nightmare year for many of America’s renters. The local, state and federal eviction bans that gave them temporary protection in the spring began to lapse in early summer – ensnaring renters like Bean in the gap. September’s reprieve by the CDC, which protected many, but not all, renters will expire in January.

At that point, an estimated $32 billion in back rent will come due, with up to 8 million tenants facing eviction filings, according to a tracking tool developed by the global advisory firm Stout Risius and Ross, which works with the nonprofit National Coalition for a Civil Right to Counsel. The nonprofit group advocates for tenants in eviction court to secure lawyers.

In a typical year, 3.6 million people face eviction cases, according to the Princeton University Eviction Lab, a national housing research center.

Landlords, most of whom are mom-and-pop operators with mortgages to pay, say they, too, are under unprecedented financial strain, as many move into the eighth month of nonpayment. Many owners are “not generating sufficient revenue,” said Bob Pinnegar, CEO of the National Apartment Association. “This is not a high-profit-margin business.”

“Only 9 cents of every dollar return to the owner or investor as profit,” he added.

Unless Congress and the Trump administration move past their deadlock over the contours of a new COVID-19 relief package and include financial relief for tenants and landlords, January will bring a surge in displacement and homelessness “unlike anything we have ever seen,” said John Pollock, a Public Justice Center attorney and coordinator of the National Coalition for a Civil Right to Counsel.”

Chuck again…  Again, blame it on the lack of stimulus… do not EVER blame the renter for not having rainy day savings to use for times like this…  I’m just saying… This is one of those unintended consequences of shutting down the economy…  And one that’s bad… bad for the people that will be shown the streets, if something isn’t worked out…  And pretty soon we’re going to be getting to the holiday season, and I don’t recall anything major getting done in the holiday season, do you? … I’m just saying.. 

And before I go on… I want to make something perfectly clear… I’m not just about money and the economy, and I don’t want anyone to die… But there are major things that go missing when an economy is shut down. I feel that that human life itself is destroyed  or at least spiritually in the inhuman lives they’ve asked us to lead. Cancer and other diseases go undetected, and I take that personally…  I’ve always said that cancer is a dastardly disease, and that I wouldn’t wish this on my worst enemy… 

Market  Prices 10/27/20: American Style: A$ .7133, kiwi .6703, C$ .7590, euro 1.1827, sterling 1.3034, Swiss $1.1019, European Style: rand 16.1342, krone 9.1588,  SEK 8.7162,  forint 308.85,  zloty 3.8762,   koruna 23.1157, RUB 76.36, yen 104.65, sing 1.3590, HKD 7.7498, INR 73.58, China 6.6991, peso 20.88,  BRL 5.6211,  Dollar Index 92.91,  Oil $38.71,  10-year .78%, Silver $24.45, Platinum $889.00, Palladium $2,388.00, and Gold… $1,903.70

That’s it for today… This whole negative interest thing has got me all lathered up folks… And I do still believe that it’s coming…  Little Evie has come to the house to stay the day with us… That puts a big smile on my face, and I forget about all the “other stuff”…   A rough night of sleep for me last night… Sometimes the chemo just does that to me, and then when I finally get to sleep, the alarm goes off! UGH!   This Saturday, Halloween, my beloved Mizzou Tigers travel to Gainesville, Florida to play the might Gators… This will be a BIG test for my Tigers…   Yes, takes us to the finish line today with their song: Rhythm Of Love…   I hope you have a Tom Terrific Day, and please Be Good To Yourself!

Chuck Butler

Hedge Funds Say Gold Will Exit It’s $1,900 Cage Soon!

Rocktober 26, 2020

* Currencies rally on Friday, but turn around overnight… 

* Gold gets old on Friday, but turns around this morning… 

Good Day… And a Marvelous Monday to you… Well… In case you’re wondering… It was a gloomy weekend here, very chilly, and a good 20 degrees below normal… But the gloomy day didn’t stop my beloved Mizzou Tigers from upsetting Kentucky on Saturday! Their second win VS a team that my Tigers were forecast to lose to… And then to follow up the joy of a Saturday victory for my Tigers, the Rays made a ninth inning rally to comeback and beat the Dodgers… That was tense, and I didn’t even have a dog in that fight! All four grandkids were here Saturday night, and 3 stayed over… My little Evie is walking steady now, and so darn cute! Delaney Grace was here to help. I still can’t believe she’s 13 now! Saturday was also the wedding of our former neighbor’s son…  So, good luck Drew & Chloe!  It was strange being in church with a face mask on… I’m just saying…

I’m also just saying that I’ve had it with all this tip toeing around each other, and not being able to live our lives… The way I see it, is this… We all know that tomorrow is not promised to any of us… And that pre-pandemic, we also knew that there was risk every day… You may just be going across town to the store, in your car, but you never know, right?   I’ve said this before, and quite frankly I don’t want to hear a lot of naysayers in the response box regarding this… But we should have never locked down the country and the economy… We should have taken the steps to insure those “at higher risk” were kept safe, but the rest of the economy should have been open, period.   I read where the “cases” are soaring again in Missouri… But… did you know that the test that they use to determine for them, positive or negative, wasn’t developed to do that?  So, we get a positive test, but if they multiplied it more times, it would be negative…  This “cases thing” has gotten out of control… 

OK… I’m off my soap box now… aren’t you glad?  Because I know you didn’t open up my letter today to hear my views on the virus testing…. So, with that in mind… The currencies had a good day on Friday, with the euro pushing higher into the 1.18 handle once again…  There seems to be more and more articles out there talking about the digitization of our economy…  If they had just read my Pfennig from a couple of months ago, they could have saved themselves some time to write about something else… And for all those people that needed to get the news from elsewhere, shame on them! They should be Pfennig readers! HA!

But when I turned on the light over my laptop this morning, I saw that the overnight markets have reversed the Friday gains in the euro…  Gold is up $4 in the early trading, but Silver, Platinum and Palladium are all on the selling blocks this morning… So, it’s a strange day to begin the week, the final week before the national election…  

And in a case of believe or don’t… The stimulus negotiators are still talking…  I know one thing, that when they are old and losing their breath, they’ll wish that they hadn’t wasted so much breath on these negotiations!  Everybody is talking… talk, talk, talk… 

So, all this talk has gotten the sentiment swaying toward selling dollars… . It’s not an all-out change of sentiment, but… more and more the dollar gets pushed to the edge, and then gets saved, and then it gets pushed to the edge again, and then saved… Pretty soon the dollar will get pushed to close to the edge to be saved…  I’m just saying…

And, don’t blame me when it gets shoved over the edge… I’ve warned you for some time now that this was coming… Too much Debt… too much currency printing… too much division in the country… too much keeping rates near zero… and…. The current strong dollar trend is too long in the tooth…

Well, Gold & Sliver didn’t have a good day like the currencies did on Friday… But… Gold at one point in the day was down big… and came back during the day to close down just $3.80, to $1,902.30. Silver followed the fortunes of Gold and ended down just 12-cents to $24.68…  Not a good two days altogether for the metals… But… I would think that this week will be different, as the rumors of a stimulus bill have abated…  All talk and no walk… That’s our Congress!  Everybody wants their 2-cents in the bill and when it finally gets finished, it has so much crap in it, that you wouldn’t know it was supposed to be helping the citizens of the country!   I’ve said this before, but, my dad used to say, “Money talks, and B.S. walks”…. 

I mentioned too much debt above…  It was just a couple of weeks ago that I told you that the Current Debt had reached $27 Trillion… In that short period of time, the debt has already risen $132 Billion!   That averages out to about $10 Billion per day… Which if you averaged it out a year, would equal $3.65 Trillion…   And that doesn’t take into consideration, when stimulus bills get passed, and the hit to the deficit is a one-time amount!   Too much debt… too much debt… I need to pound this into the heads of traders…

Things around the world aren’t getting any better folks… But as I’ve explained before… The U.S. is supposed to be better than the everyone else. They have the reserve currency of the world, and is supposed to be taking care of the reserve currency in the world, but are doing a very poor job of that!

I had a dear reader send me a note last week, from someone that used to live here in the U.S. but moved to New Zealand, and he gave his viewpoint on how we got into this mess…  And while reading his note, I was reminded of how I made such a HUGE fuss over what he was talking about back in the day when it was all going down…. I’m talking about how the U.S. allowed Manufacturers to move their businesses abroad for cheaper labor and more profits…  I know, I know, it’s a free country, blah, blah, blah, but…. The Gov’t should have levied huge fines for even thinking about moving their business abroad, and should have made them repatriate their profits and then taxed the hell out of them then…  But noooooo…  We allowed them to close shop here, put workers out the door, and move their businesses abroad, and then to make matters worse, on two occasions the mental giants that run our country, gave tax amnesty to repatriated funds!  They should have taxed them to the max for leaving!

We used to be a country that made things…. And what we made was good! But through the years, we turned into a services country… And our service stinks! But you have to learn how to make lemonade out of lemons, right? So… where are all the leaders that allowed this to happen under their watch? Probably sitting out on their ocean view veranda with umbrella cocktails and eating chocolate bon bons…

OK… Boy I’ve stepped up on the soap box a couple of times this morning.. . I had better be careful stepping back down, I lose my balance easily! 

Gold should be heading toward $2,500 by now, given it reached $2,000 back in August…  But it’s not, the fault of Gold buyers, they continue to demand Gold & Silver, but the price manipulators won’t back off…. 

Because, as I’ve said before, the Gov’t can NOT have Gold & Silver in foreign Central Banks’s vaults replacing the dollars they hold…. That’s why the practice of having more short contracts on the books representing more ounces of Gold or Silver than is currently above ground, is not investigated, and shut down….  Oh, and one more thing on Debt…  Did you know that the total of student debt in this country is $1.64 Trillion? And that about a third of that total is in arrears? 

But Gold will get there and beyond one of these days, because, the dollar is going bye-bye… So long, farewell,  auf Wiedersehen, good night! And when the weight of the debt becomes too much even for the almighty dollar to carry…. Gold will take over….  I’m just saying…

The U.S. Data Cupboard gets back into the business of yielding economic data this week, after spending last week on hiatus!  We’ll see prints like Durable Goods and Capital Goods Orders, The first 3rd QTR GDP print, Personal Income and Spending, and the Employment Cost Index (ECI) for the 3rd QTR, which is a very watched print by the Cartel, I mean the Fed Heads… 

To recap… Friday saw the currencies rally in the face of a Gold & Silver selling. And just like all the other times the euro gets close to 1.19, it sees selling, which is happening this morning… Gold is bouncing back this morning, but Silver, Platinum and Palladium are all getting sold… Chuck thinks that this represents a strange way to start the week…  Chuck gets on his soapbox to yell about virus testing, and what was the thing that started the mess we’re in…  And I bet you’re thinking that it’s Richard Nixon’s exit from the Bretton Woods Agreement, but that’s too easy of a target, I went with this something else! 

For What It’s Worth…  Well, I talked a lot about Gold this morning, so to keep that frame of mind going, here’s an article that was in the Daily Reckoning by James Rickards on what’s moving the Gold price higher, and it can be found here: 

Or, here’s your snippet: “What’s driving this bull market in gold?

It’s not retail investors (apart from a small number who understand the dynamics), and it’s not institutional investors (institutional portfolio allocations to gold are typically about 1-2%).

Instead, the steady buying is coming from central banks (especially Russia and China) and from the super-rich, who typically store their gold in private non-bank vaults in Switzerland and other good, rule-of-law jurisdictions.

The drive toward larger portfolio allocations to gold (in some cases up to 10%) is coming not just from the rich themselves but from their wealth managers and portfolio advisers.

This is a sea change.

For decades, wealth managers have rejected gold and pushed their clients into stocks, corporate credit and alternative investments, including private equity. All of those portfolio allocations backfired when the coronavirus came along. Equity markets have since recovered, due in no small part to massive intervention by the Fed.

The Fed doesn’t entirely explain the rally, but it’s certainly played a critical part. The market is nonetheless set up for another fall. The upcoming election is just one catalyst.

Not only will uncertainty reign until Election Day. It will continue to reign after Election Day.

If Trump wins, the Resistance will not take it well. They will challenge the outcome in court, deny the legitimacy of a Trump victory, and extreme elements in the Resistance will burn American cities.”

Chuck again… To add to Jim’s view…  A dear reader sent me a note that talked about how Hedge Funds Say Gold  Is Set to Depart $1,900 Cage Soon…  Well… as always, I would prefer that they are correct! 

Market  Prices 10/26/20: American Style: A$ .7132, kiwi .6693, C$ .7583, euro 1.1820, sterling 1.3047, Swiss $1.1031, European Style: rand 16.2495, krone 9.2497, SEK 8.7441,  forint 308.54,  zloty 3.8737,   koruna 23.0756, RUB 75.79, yen 104.83, sing 1.3607, HKD 7.7498, INR 73.96, China 6.6768, peso 21.05,  BRL 5.6181,  Dollar Index 93.00,  Oil $38.84,  10-year .81%, Silver $24.39, Platinum $881.00, Palladium $2,413.00, and Gold… $1,906.60

That’s it for today… Like I said above, no debating what I said about the virus this morning, you won’t change my mind on iota!  Well, this coming Saturday will be Halloween! Boo!  For now, I’ve given up on the sweets, something I should have done years ago, but… I just love them!  So, I won’t be helping myself to the candy bars in the dish I use to distribute treats to the trick-or-treaters…  UGH!  And Saturday will also be a Blue Moon! And it’s supposed to be clear so we can see it! I sure hope so… Halloween with a full moon…  The werewolves will be out! Badfinger takes us to the finish line today with their song: Come And Get It…   I hope you have a Marvelous Monday today, and will Be Good To Yourself! 

Chuck Butler



Negotiators Take Another Run At A Stimulus Package…

Rocktober 22, 2020

* Currencies & metals rally on Wednesday

* But get sold on Thursday… UGH! 

Good day… And a Tub Thumpin’ Thursday to you! Yesterday was another gray and gloomy day here, and Tuesday night it rained like dickens! At one point in the middle of the night I thought a Tornado was moving through the area, the wind and rain was so loud. So, the weather people said that we were in a drought, well I would say after the last few days,, we’re not in a drought any longer! The creek behind my property is rollin’ like thunder!  We used to have beavers that would dam up the creek, normally right behind my house… And weather like this would devastate their dam, but they would get right back to work building it up again… I had to wrap chicken wire around the trunks of my trees that line the creek, for fear that the beavers would get them… The trees are still all there, so I guess I saved them! But no, I’m not a tree hugger…  In case you were thinking that! Chicago greets me this morning with one of their early songs: Movin In… from their 2nd album, which the first time I ever heard it, I was blown away by the wall of sound that the band featured….

Well, yesterday, I said, “The stimulus deadline came and went”… And then later in the day I heard that the powers that be had given the deadline a 48 hour extension… So, here we are at on the day that the 48 hours ends, and once again I would think that the stimulus bill has a snowball’s chance in hell of getting done… So, all the hope that the Robinhood investors, and Wall Streeters have built up is going to be disappointing…  That’s all I have to say about that!

OK… well… all this talk of being near the goal line for a new stimulus bill, sure has the dollar bugs on the run… The euro continued to move higher in the 1.18 handle yesterday, and the Aussie dollar (A$) which has been spending time in the wood shed, afraid to come out and show their bruises, finally got on the rally tracks again yesterday, and climbed back above 71-cents…  It was a good day all around for the currencies… Now… let’s see what happened in metals, eh?

For the first time in some trading days, Gold & Silver were able to add on to their early gains throughout the day Wednesday… Gold ended up $18 to close at $1,925.30, and Silver ended up 45-cents to close at $25.13…    You know, the price manipulators used the threat of no stimulus as their reason to sell Gold a couple of weeks ago… I wonder what will happen this time?  Because Gold seems to be moving ahead and leaving all that baggage in its rear view mirror… But the price manipulators/ the wolves, are always at the door…

I told you yesterday that Silver guru, Ted Butler (no relation, blah, blah, blah)  was  interviewed this week by Tom Bodrovics at Palisade Radio, explains why he thinks that price suppression in Silver is beginning to fail as the longstanding concentrated short position maintained by bullion banks breaks apart and starts to lose money.

And if you want to listen to him explain his thoughts, here is a youtube video that you can watch curtesy of the folks at GATA…

OK… all that good stuff that went on yesterday, is being unwound in the overnight and early trading markets on this Tub Thumpin’ Thursday… UGH!  Gold has given back $20 this morning and Silver has given back 46-cents, while the euro falls back within the 1.18 handle… Yesterday, it looked like things were finally going in the right direction, and today… 

For what I can see about Gold’s loss this morning is that $3 of the loss is from dollar strength, and $17 is from sellers…  So, once again we’re seeing the price manipulators at the COMEX window… UGH!  From what I’m seeing, there’s news that the stimulus negotiators will meet again today, and that’s why the dollar has rebounded… Really? Give me a break! I was born… Just not yesterday! 

For all the Ivy league schools, and others of note, Stanford, to mention one, why can’t we as a nation produce another Thomas Jefferson?  Man this man could think and put his thoughts down in writing so that everyone could read them…  I had a guy send me a nasty note a couple of weeks ago, when I cited something that Thomas Jefferson said about Bankers…  he apparently is one of “those kids” brought up the thought that you should hate American, it’s founders, it’s capitalism, it’s history, and so on… But to brighten my day… I had a long time reader send me a picture of a postcard she obtained while visiting Monticello when she was young girl, and the picture is of Thomas Jefferson…  So, at least someone shared my admiration of the man!

Ok, back to regularly scheduled programming….  

I noticed yesterday that the Canadian dollar / loonie had taken a step outside its normal comfort zone of 75-cents, and was trading above 76-cents… I even did a double take on that number when I was typing the Market Prices roundup…  So, later in the day, I had to find out what was going on up north…  Well, it seems that not only was the uptick in the price of Oil helping, but so was some economic data…. Retail Sales for Sept. came in bang on the Aug. number of .4% gain, which sure beats the negative numbers that were printing a few months ago… And their version of CPI (consumer inflation )  showed at .5% gain YOY… which was up from the Aug YOY number of just .1%…   So, to me, this tell me that inflation is going up and interest rates will have to follow eventually… And like all markets, the traders were looking ahead… 

I was having a long conversation, on the phone, with good friend, Dennis Miller yesterday, and during the conversation we agreed that the middle class in the U.S. is a dying breed… And in 20 years, there probably won’t be a middle class, as we knew it to be, silent bur strong!

What brought that conversation on? Well, we were talking about how difficult it is for normal people to build any wealth toward their golden years…. With interest rates near zero, and will be for a long time going forward, how can Joe six-pack save?  I talked about how stupid the Cartel, I mean the Fed is in their desire to ramp up inflation, because when you ramp up inflation, it can get out of hand, and pretty soon you would have to raise rates to combat the inflation… And I don’t mean by 25 Basis Points!  Remember when inflation got out of hand in the 70’s and how high Paul Volcker had to raise rates to get inflation under control?  Remember his Saturday Night Special? 

The Fed can’t raise rates past 3% in my view…  Because with rates any  higher, the debt servicing costs would probably outdistance the tax receipts in this country…  And then there would no funds left over for all the other deficit spending programs…  And one of the first one to get cut, I’m afraid would be Social Security… OOOOhhhh, I can hardly wait for that to happen! NOT!   What is debt servicing costs I hear some of you asking? 

That’s market parlance for bond interest costs….  The U.S. issues Treasuries to finance their debt, and those Treasuries have an interest rate that’s payable to the holder.  For the past 13 years, The Gov’t has gotten off Scot-free of worrying about debt servicing costs, because interest rates have been near zero all that time, save a couple of rate hikes by Janet Yellen, who had a dastardly  agenda she was playing….   Those rate hikes  were quickly turned around last spring…

I find the news that physical demand for Gold continues even in the face of Russia halting their Gold purchases while the economy works its way through their version of the pandemic. Apparently China has slowed down on their Gold purchases too. But of course that doesn’t mean they stopped mining Gold…  You know when I first started following Gold, Australia was the number one country for Gold mining…  So… just like reserve currencies of the world, eventually the leader gets knocked down by the new kid on the block…  I’m just saying…

But my metals guru, Tim Smith of TIAA Bank World Markets 1-800-926-4922, tells me that physical demand is still strong… So I asked him about the premiums if they had come down, and he replied, “ Retail Demand is still strong, although off the peak demand of this spring, and premiums have come down a bit, but certainly not wat they were pre-COVID” 

Well that’s about what I expected to hear, even with the news last week that some Central Banks were selling their Gold… Probably from countries that can’t pay their bills due to their respective economic lockdowns… I wouldn’t worry too much about this news… Because it didn’t mention the Big three of Gold buyers.. Russia, China and India… 

The U.S. Data Cupboard has the Weekly Initial Jobless Claims for last week… And looky there! The Weekly Jobless Claims fell last week to 787,000, thus breaking the streak of plus 800,000 each week that has gone on since March…  I’m going to have to look into this number because after rising the last three weeks, it suddenly falls?  That seems suspicious to me, doesn’t it you? 

A longtime friend, David Gonigam, of the 5 Minute Forecast, at:  had some thoughts about the unemployment picture in out country, so I’ll hand over the reins for the Pfennig to him…  Here’s David… “For the record: Seven months into the lockdowns, the numbers show people are just plain giving up looking for work.

The Labor Department released state-by-state job figures yesterday. Of the 30 states where unemployment fell last month… the size of the labor force shrank in more than half of them.

A shrinking labor force means fewer people working or looking for work. That’s one reason the official unemployment rate has fallen from a peak of 14.7% in April to 7.9% in September.

Economists don’t see any obvious reason. School closings keeping moms at home? California has many schools shut down and Florida does not, but labor force participation is flat in both states. Nor does there seem to be any evidence of more people looking for work in states where job searches are a condition for collecting extended unemployment benefits.

Yet another 2020 head-scratcher…”

Chuck again…  I’ve gone on too long again today, so I’ll head to the Big Finish…

To recap… The currencies had a good day yesterday, as the thoughts that a new stimulus may still be in the offering and sent the dollar bugs well into the wall boards they came from… Gold & Silver were able to add on to their early gains for once in a blue moon, and ended the day on as the Godfather of Soul, James Brown, says… On the Good Foot! But have given back all those gains yesterday in the early trading today… UGH! 

For What It’s Worth…  I was just thinking that I should have saved the David Gonigam thoughts for the FWIW, but instead I have an article for you from Forbes, that the GATA folks first sent me, and then I saw it highlighted on Ed Steer’s letter this morning, so I knew it was FWIW worthy!  It’s an article about Citicorp shouting out about how investors need to buy Silver… and it can be found here:—for-starters/#4b9011107646 

Or, here’s your snippet: ” Silver has been a graveyard for investors since the Hunt brothers tried to corner the market for “poor man’s gold” 40 years ago, so when a big-name investment bank earlier this week forecast a 60% rise in the silver price most investors yawned.

Citi, which has a well-connected resources research team, has put its neck on the silver block in an advisory note with a tip that the price of the metal will rise to $40 an ounce over the next 12-months.

Silver is currently trading around $24.80 an ounce on the London bullion market, having already risen by 38% from $18/oz since the start of the year.

Citi’s case for silver is based on growing demand from investors who see silver as a cheap entry point into the world of precious metals dominated by gold, with a bonus of strong industrial demand.

But the bank doesn’t stop at a 605% silver rally. It also argues that there is a technical case for silver doubling $50/oz, and potentially rising four-fold to $100/oz. The bank said its foreign exchange (FX) technical team is very bullish on silver with “$50/oz a very realistic target — and $100/oz possible.”

Chuck again…  $100 Silver?  WOW! If Silver would ever trade at $100 an oz. I might even get a hug and kiss from my wife! HA!  

Market  Prices 10/22/20: American Style: A$ .7100,  kiwi .6663, C$ .7597, euro 1.1822, sterling 1.3093, Swiss $1.1021, European Style: rand 16.3110, krone 9.2495, SEK 8.7765,  forint 308.25,  zloty 3.8743,   koruna 22.0288, RUB 76.96, yen 104.67, sing 1.3570, HKD 7.7498, INR 73.61, China 6.6525, peso 21.17,  BRL 5.6019,  Dollar Index 92.89,  Oil $40.32,  10-year .81%, Silver $24.67, Platinum $871.00, Palladium $2,394.00, and Gold.. $1,905.50

That’s it for today…  Well maybe the Rays heard my cheers for them, as they won Game 2 to even the Series with the Dodgers…  Man these games go late into the night!  Well, it’s supposed to get warm again today, and then back to chilly tomorrow… So, I’ve got to get outside today while I can! I have a new book to read… I thought I would try something different than my usual detective books, like Harry Bosch, Mike Bennet, Alex Cross, and Cormoran Strike, and I’m reading: The Madness of Crowds… So, far so good…  Just thought I needed to expand my reading material! HA! Oasis takes to the finish line today with their song: Wonder Wall… I laugh whenever I hear Oasis on my iPod… Because, remember they were supposed to be better than the Beatles?  Where are you now Oasis? I’m just saying… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and will sure to Be Good To Yourself!

Chuck Butler


The Stimulus Deadline Comes & Goes…

Rocktober 21, 2020

* Currencies & metals are rallying this morning… 

* The Bond Boys don’t like the no stimulus decision… 

Good Day… And a Wonderful Wednesday to you!  Well, my former colleague at Mark Twain Bank had to point out something to me yesterday… I did have an “I Voted” sticker on the back of the instructions card that, of course I failed to read completely! So, Thanks, Neil for pointing that out to me! I peeled the sticker off the card and slapped it on my shirt! It made me feel good! And now I can track my ballot, on line to make sure it gets there and is counted! YAHOO! The World Series began last night with the Dodgers & Rays playing… An interesting matchup of the highest paid team VS the 3rd lowest paid team… I’ll be rooting for the underdog, here… So Go Rays! Heartsfield greets me this morning with their song: The Wonder Of It All… 

I think about that a lot, folks… I think about how things were as a kid…  and how much they’ve changed through the years. So, if you ever think that today is boring… I heard Adam Carolla talk about this… get yourself a time machine, and set it for 1972, and then go back there for one day, to see what life was like, and then return to today, and about the time you’re feeling bored with today again, you go back to 1972…  Rotary phones, screwed to the wall…. No video games… no ipad… no ipod…  sure gas was just 23-cents, but… the car you had probably was a beater, and so on… And since time machines don’t exist, you’ll have to use your mind… Go ahead, it’s a great exercise for your gray matter! 

The other day, I said, “Alexa, play smooth jazz” and suddenly throughout the house we had Stan Getz blowing away on his sax…  The Wonder of it all….

Ok, sorry I beat around the bush a little this morning, before giving a recap on what happened in the markets that I cover…. So, with no further ado….  It was another “meh day” for the currencies and metals yesterday, as the euro climbed further into the 1.18 handle throughout the day, and Gold gained $2.80 to close at $1,906.80, and Silver gained 24-cents to close at $24.69…  Both Gold & Silver were higher than their closing numbers during the day, and once again, I don’t see Gold & Silver owners selling for profits on a day like yesterday, so I’ll chalk this backing off from the highs of the day, as case of price manipulators showing up at the COMEX with arms full of short trades once again…

I could be wrong about that, but it just seems silly to me to take a profit on something that should be held as a piece of wealth, when the metal is only up $8 or whatever, during a day…  But then I would never sell my Gold & Silver unless the man was at the door to take away my house… No wait, I own my house they couldn’t do that! But you get my drift…

I read a piece by Silver guru, Ted Butler, no relation that I know of, and he is of the opinion that these daily forays by the price manipulators to bring down the price of Gold & Silver, are beginning to see an end to them… Geez, I sure hope so… Wouldn’t it be nice if we could wake up, no wait! UGH!, I don’t know why my fat fingers start to do that, but your brains does tell your fingers what to type, right?  Anyhoo… Wouldn’t it be nice if we could see Gold & Silver trade on fundamentals?   With no interference?   I would think so!

In the overnight markets, the dollar bugs really went into hiding, and the currencies and metals have both put on some rallies. The euro is trading at 1.11850 as I write, and Gold is up $12 this morning, with Silver up 36-cents, to bring Silver back above $25!….  

And though it’s not a real indication of what the currencies are doing, The Dollar Index has dropped from 93.55 last week to 92.81 today… Things are looking like they could go the wrong say for the dollar once again, but we’ve seen these moves by the dollar to edge near the cliff, only to see the PPT come in, buy dollars, and save the day…  

Well, the Tuesday deadline for a stimulus came and went…  You know me, right? I would love for people to have money to do the things they want to do, but… I don’t believe that waiting for checks from the Gov’t is the way to get that done… I also don’t believe the Gov’t should be in the business of spending even more money that they don’t have and won’t ever have… So, to me, I’m glad that nothing was done… 

The bond boys didn’t like it that nothing was done, and the 10-year Treasury lost ground on the day. Yesterday the 10-year’s yield was .77%, and today it’s .81%…  Now before you start harping at me that there’s only 4 basis points of a move there… Let me remind you that bonds trade in large amounts… very large amounts… And 4 basis points of yield will move the price of the bond enough to cause a loss, and that’s what I’m talking about here… 

And then speaking of the euro….  I said yesterday that I thought that the dollar bugs had drawn a line in the sand at 1.18…  But, one of these days, the euro will treat that line in the sand like the U.S. treated Saddam’s infamous line in the sand….  (In case you’re too young to recall, the U.S. military went through Saddam’s line in the sand like Grant took Richmond)…  I’ve always refrained from using that phrase. It was one of my dad’s favorite phrases, but I always refrained from using it in fear that my Southern readers would take offense…  So, if It offended you, I apologize, but for emphasis to what I was saying I just couldn’t think of another phrase… .

I haven’t talked about the Chinese renminbi since I told you about how the Chinese Gov’t had announced that they were going to put the kyboshes on further appreciation of the renminbi… The renminbi is still stronger than it was a couple of months ago, but the daily appreciations have seemed to have stopped…. That’s one thing that I’ve always liked about the Chinese… They don’t say something unless they mean it… So, when they said that they are attempting to remove the dollar from their lives…. They meant it!  Think about that for a minute…

The Japanese yen has turned into the Hong Kong Dollar… Not technically it hasn’t!  But, what I’m talking about is how the yen barely moves from its daily figure of 105 ish, and the honker stays steady Eddie at 7.75-ish….  (the honker is pegged to the dollar)   You know, when I first began my career in the foreign markets, as the foreign bond trader, in 1992, the yen was 133, and I thought it was pegged to the dollar because it barely moved from day to day. Of course I was incorrect, about that, but still it didn’t tell me the story of why the yen remained to steady, and other currencies were kicking the dollar’s tail and taking names later…  Well, you have to take things into perspective… In 1985 at the time of the Plaza Accord, the yen was at 251…. And in 1971 when currencies were set free to float, the yen was 357…  So, owning yen from that time to now would have been a great trade, no?

And of course as I write that, I see that the yen moved to 104.85 this morning… UGH!  Oh well, that’s still near 105-ish… 

Sort of like owning Gold since 2000…  In 2000, Gold traded around $280 per oz.   And today it’s $1,900-ish….  And then imagine, it is isn’t hard to do, that Gold’s price is reset at $10,000 oz…  I can envision it, now it just need to become reality…

And just when you thought you wouldn’t hear me talk about the collapse of the financial system so much… Craig Hemke of TF Metals, sounds as if he’s been reading the Pfennig… The GATA folks sent this to me yesterday, and here’s Craig Hemke: “”Just about anyone can see that we stand at the doorstep of an epochal change in the global monetary system. The Great Keynesian Experiment is failing, as the monetary growth needed to service the existing global debt is finally exceeding the capacity of the system to provide for itself. Put another way, the global central banks are now permanently in a mode where only the continual and rapid creation of additional fiat currency can feed The Beast of exponential debt.”

I watched a video from Mike Maloney the other day that a reader sent me to watch, (see I did my homework, aren’t you proud of me? )  and he explained the history of monetary regimes… In essence the average of each lasted about 40 years….  And we’re currently near 50 years (1971-?), so our system is long in the tooth, so to say…. And I know when I first told you that I thought the weight of the debt would cause the financial system to collapse, you were shocked… How could I say that, our system has been in place for 49 years, and it hasn’t collapsed yet?, I can here you saying…. Well, hopefully, you’ve come around to my way of thinking…..  

Got Gold?

I heard a funny the other day, that I’ll share with you…  At Thanksgiving this year, bring up your view of politics, it will definitely reduce the number of Christmas gifts you need to buy this year!  HA!  Speaking of politics, we had a lively discussion last night about the two parties…. I’m so proud of my youngest son Alex for a number of reasons, but last night, he proved that he was well read, and well versed on the politics of today, and….  We agreed on everything!   My wife, well… she had to play devil’s advocate on everything we talked about…

OK… Man, am I full of good news and cheer this morning! NOT!  I shared a cartoon with my watering hole buddies yesterday… A traffic cop that is a lighting bug, pulls over a lighting bug on a motorcycle, and tells him, “Your tail light is out”….  I laughed and laughed and laughed at that….  And reminded me of a joke I used to tell the kids to use on Halloween, but they never did…. What did one fly say to the other fly?  You’re man is open!   HAHAHAHAHAHA!

So, there did I even out the tone of the letter this morning?

Well, as I said yesterday housing sure is hitting on all eight cylinders these days… And why not, with mortgage rates in the 2’s….  Housing Starts and Building Permits both for Sept. beat expectations, and showed that even in a pandemic, if the price is right (servicing cost) houses will sell!   Speaking of the pandemic, I see where people are buying cars online now…. Wait What?  Don’t you have to test drive a car to see how it feels, and you sit in it, kick the tires, etc.?  Well, I guess not…  And think pretty soon you’ll be able to ask the car salesmen, “Just how many digits is this car selling for?”   HA!  The Wonder of it all…. 

Today’s Data Cupboard is reserved strictly for the Cartel’s, I mean the Fed’s Beige Book…  Cartel, I mean Fed heads, Brainard, Mester and Kaplan will all speak somewhere today… Who’s going to let the cat out of the bag regarding the new digital currency the Fed is working on?

Maybe none of them, maybe they’ve been sworn to secrecy…  But knowing out Fed Heads like I do, They are all primed and pumped to be the first to tell you… But maybe the timing isn’t right, just yet… We’ll see…

To recap… Another “meh day” in both the currencies and metals… They gained ground, mind you, but not so much that you would notice…  The only thing different from Monday’s Meh day, was that the little dogs finally got off the porch to chase the dollar bugs down the street…  (the other currencies not named euro,)

For What It’s Worth…. Ok, I know I’ve run on long this morning, so I’ll try to make this a short FWIW… I found this on Ed Steer’s letter ( and it’s a foreigner’s view point on the U.S. and it can be found here:

Or, here’s your snippet: “For the entire lives of anyone under the age of seventy-five, the U.S. has been at the top of the heap in almost every way. For decades, it had greater freedom, greater prosperity and higher production than any other country in the world.

America was a cornucopia – the centre for innovation and trends in technology, the arts and social development. And today, many Americans, even if they complain about changes for the worse in their country, come back quickly to say, “This is still the greatest country in the world.” Or, “Everybody is still trying to come here.”

Well, truth be told, neither of these knee-jerk comments is accurate any longer. But even those who have come to that realisation tend to resort to the inevitable fall-back comment: “Well, whattaya gonna do? It’s just as bad everyplace else.”

And yet, this is also inaccurate. Throughout the history of the world, whenever a country had entered its decline stage, others were in the process of rising up.

And this is just as true today. There are countries where prosperity and production are far greater than in the U.S. and, increasingly, countries where the key ingredient that made America great – Liberty – is present to a far greater degree.”

Chuck again…  As usual the actual article is much longer and gets into much more than I can print here, so take a look by clicking the link above, that is, if you’re interested! 

Market Prices 10/21/20: American Style: A$ .7085, kiwi .6631,  C$ .7625, euro 1.1850, sterling 1.3057, Swiss $1.1061, European Style: rand 16.3864, krone 9.2147, SEK 8.7407,  forint 307.05,  zloty 3.8595,   koruna 22.9360, RUB 77.58, yen 104.84, sing 1.3555, HKD 7.7498, INR 73.64, China 6.6758, peso 21.08,  BRL 5.5959,  Dollar Index 92.81,  Oil $41.00,   10-year .81%, Silver $25.04, Platinum $884.00, Palladium $2,429.00, and Gold.. $1,918.70

That’s it for today…  Well, the Dodgers won Game 1 last night… C’mon Rays you can do it!  My beloved Mizzou Tigers finally will get back on the gridiron this Saturday, with their redone schedule, they’ll play Kentucky… Go Tigers!  The Band Styx, takes us to the finish line today with their song: Lorelei…   And that reminds me of my former assistant, little Christine, she once said that she wanted to be called Lorelei… And it stuck only with a guy on the brokerage desk, who always called her Lorelei…  good memories, for sure! I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

Powell Talks About A Digital Currency For Us!

Rocktober 20, 2020 

* Currencies and metals have a “meh day”

* It’s not time, yet, for Chuck to gloat… 

Good Day… And a Tom Terrific and Manfred the Wonder Dog Day to you! Well, I voted yesterday… I usually vote absentee, since I can’t stand in long lines very long without major pain… And the National Election is one of those times!  The thing I missed was the lack of a (I Voted) sticker! HA!  My trip to the wound center was OK… once again another doctor said, “keep doing what you’re doing”…  It’s a good thing I have insurance, or else I would balk at paying a doctor their fees if that’s all I heard out of them! HA!  I have to wear shorts to the wound center, obviously, and when I stepped outside, it was cold and rainy, and I shivered, and said, “ I wanna be where it’s warm”! Well, I’m getting to hear, one of my two fave songs from Chicago this morning… Chicago greets me with their song: Hard Habit To Break….  I have to say that I didn’t always care for the direction that Chicago went after the death of Terry Kath, but this song, just gets to me in a good way…

Well, the hopes I had for a very good day in the currencies and metals yesterday, turned into a Meh, day… Gold did hold on to some of its early gains to close up $3.50 at $1,903.00…. And Silver closed up $17-cents. at $24/35/// But those gains were off their earlier gains… I can’t see Gold holders selling at a profit on the day, as the profit was, while good, not great…. So, it had to be more price manipulators showing up at the COMEX with arms full of short Gold & Silver trades…  It’s become a common day occurrence these days, as I think the bullion banks can see the writing on the wall, that no matter what direction we go, Gold is going to rally… 

The euro held its gains throughout the day, so the dollar bugs were non existent for one day, that is… The Aussie dollar (A$) didn’t fare as well as the euro, and lost about ½=-cent on the day…  Speaking of Australia… I have a long time reader, Bob, who sends me links that I use from time to time in the FWIW section… He lives in Australia, and he sent me a link to a file of simply beautiful flower gardens in Australia… It’s spring there, and the flowers are in bloom!   One of the things weighing on the A$ has been the strict lockdown of the economy… It was reported the other day that a woman walking in a park, was arrested for not following distancing rules…  Now that’s strict…  Now we all know what a lockdown like that can do an economy, and so the A$ is having a difficult time gaining any traction, right now…

In the overnight and early morning trading markets, the euro has popped back over 1.18, which seems to be the line drawn in the sand by the dollar bugs… They’ll allow the euro to reach 1.18, but that’s about it… So, we’ll see how today goes for the single unit… The euro is about the only currency to see gains though, this morning… Gold and Silver are basically flat this morning, so they have that going for them… 

Well… have you heard the news, there’s good rockin’ at midnight, no wait! The news I’m talking about is serious stuff, we don’t need silly stuff right now!  The news I’m talking about is that Fed Chairman Jerome Powell, gave a speech recently on why the Fed wants to develop a digital currency…  here’s what the Fed Chairman thinks about a digital currency… “It’s more important for the United States to get it right than to be first,” adding that “we are committed to carefully and thoughtfully evaluating the potential costs and benefits of a central bank digital currency for the U.S. economy and payments system. We have not made a decision to issue a CBDC.”

I guess this is where I gloat… No wait, it’s not a done deal just yet, but with 80% of the Central Banks around the world “exploring the idea of a digital currency”, I would have to say that IT’S COMING! And that will be the end of the last of our civil liberties, folks…  You know, through the years, that we, as a country, were accumulating piles of debt each year, I really though that it was because these guys that elected were just too stupid to figure out what all that debt was going to do to the economy… 

But now, I think I see where this was all going in the first place… They knew that if the debt got so large, it would collapse the financial system, and when that happened they could introduce their digital currency, and central planning, and all the other crap that goes with this plan… 

It’s really a sad state of affairs, folks…  I think I’ll go out today, and spend some cash just for old times sake….  And savor what it feels like to have some cash in your pocket, that you can pull out, and lay it on the counter… There’s so much freedom and feeling of accomplishment involved with the exchange of cash….  And that feeling is going to be gone, eventually, folks… These guys don’t talk about something unless it’s 80% through its testing phase….  And the “new Bretton Woods” meeting that the IMF is calling for? Seems too soon to introduce the new financial system, so what is the IMF up to?   

No good…. That’s what!  Given what we all know has happened to countries that needed help from the IMF… The countries all wished they hadn’t called the IMF to begin with when it’s all over…  I’m just saying..

Got Gold?  

The U.S. Data Cupboard today has the Housing Starts and Building Permits, and from the looks of it, they have had a very good September… And why wouldn’t they? Mortgage rates are in the 2’s…  That’s crazy! Tomorrow’s Cupboard offering will be the cartel’s, I mean the Fed’s Beige Book… Not that this is a market mover, but does sometimes give us a hint of what the regional Fed Heads are seeing… 

To recap…  Our “up day” turned into a “meh day” yesterday, Gold & Silver couldn’t hold their early gains, but did finish out the day with small gains, and the euro pushed higher, but the rest of the currencies aren’t following along at this time… It’s time for the little dogs to get off the porch and follow the big dog (euro) down the street to chase the dollar bugs! 

For What it’s Worth….  Longtime readers will recall me referring to Koos Jansen a lot in times past whenever I wanted someone else’s opinion on the direction of Gold…  Well, Koos changed his name back to his original name of Jan Nieuwenhuijs…. And he no longer writes for Voima Gold, he has hung out his own shingle… Recently he tweeted the following:  Gold is the only way out for central banks.

CBs want inflation? They need a higher gold price.

CBs want to repair their balance sheets? They need a higher gold price.

CBs want to reset the system with an immutable, neutral, and evenly distributed reserve asset? That’s gold.

So, when the GATA folks sent me a link to his latest article, I thought, welcome back Koos, I mean Jan, and this is a FWIW article!  The article follows up on his thoughts above, and it can be found here:

Or, here’s your snippet: “The tweet was born out of several ideas I had for articles to write. One, on the relationship between the gold price, inflation expectations, and the inflation needed to lower the debt burden. Two, on the accounting structure of central banks’ balance sheets, and the ability of using gains in the price of gold to absorb losses on other assets. Three, on restoring financial stability through a new equitable monetary system that incorporates gold. In aggregate, I think gold will be used to get out of the current financial mess.

Today’s article is a preview of the three aforementioned articles.  

Gold, Inflation Expectations, and Inflation

Due to excessive debt levels, central banks are desperate to spur inflation and keep interest rates at or below zero. Deeply negative real interest rates would lower the debt burden. But creating consumer price inflation is not easy in this day and age.

Strictly speaking, there is no economic law that guarantees that a higher gold price will create inflation. Though, historically the gold price has been an expression of inflation expectations. In turn, inflation expectations are what feed into inflation. So, when the gold price goes up, inflation usually rises within a year or two.

In the 1990’s the Federal Reserve even based its monetary policy partially on the price of gold (source). If the gold price went up—and the market signaled it was expecting inflation to rise—the Fed would tighten. If the gold price fell, the Fed would do the opposite. On February 22, 1994, the Chairman of the Fed, Alan Greenspan, explained to Congress:

[Gold] is a store of value measure which has shown a fairly consistent lead on inflation expectations and has been over the years a reasonably good indicator, among others, of what inflation expectations are doing. It does this better than commodity prices or a lot of other things.

A higher gold price can bolster inflation expectations, and this is what central banks want.”

Chuck again… The article is much longer, so if you have the time, and it interests you, be sure to click the link above to go to Jan’s new website!

Market  Prices 10/20/20: American Style: A$ .7030,  kiwi .6560, C$ .7582, euro 1.1810, sterling 1.2927, Swiss $1.1013, European Style: rand 16.5305, krone 9.2860, SEK 8.7890,  forint 309.50,  zloty 3.8778,   koruna 23.0584, RUB 77.75, yen 105.67, sing 1.3578, HKD 7.7498, INR 73.45, China 6.6840, peso 21.19,  BRL 5.6056,  Dollar Index 93.26,  Oil $40.88,  10-year .77%, Silver $24.61, Platinum $865.00, Palladium $2,382.00, and Gold… $1,903.00

That’s it for today… Man… I was really draggin’ the line this morning until I started talking about digital currencies, that really got my motor running!  HA! Another gray, gloomy day with more rain this afternoon for us today… UGH!  I really do have to go where it’s warm!  We usually head to S. Florida this time of year, and come home around Thanksgiving, but not this year, with my leg wounds having to have their dressing changed every other day, and be seen by a doctor once a week, that put the kyboshes on our annual Fall Trip South…  I’m so depressed about that, I can’t express my depression any more than that…  So… will there be Trick-or-Treaters in your neck of the woods this year?  I would miss the little ones if they decided to not Trick -or-Treat this year…  I’m so done with this virus thing, all these changes have gotten to me and I don’t want to deal with them any longer!  I had better stop there…  The Four Tops takes us to the finish line today with their song: Reach Out, I’ll Be There…  Man, did I love me some Four Tops when I was a young man and could dance to their music…   I hope you have a Tom Terrific and Manfred the Wonder Dog day, and please Be Good To Yourself! 

Chuck Butler


The IMF Calls For A New… Bretton Woods!

Rocktober 19, 2020

* Friday was a down day, today looks good though

* Weekly Jobless Claims rise again last week! 

Good Day… And a Marvelous Monday to you… It’s a rainy Monday here, here and usually, rainy days and Mondays always get me down, but… I’m going to try and avoid that feeling today!  It was a very quiet weekend here, which was good, because I was so worn out from last weekend’s activities that it took me until Thursday to feel stronger…  It’s getting to be that time of year, when people spend a lot of time indoors, and since I only feel safe being with people outside, I guess that eliminates any future happy hours indoors here at the Butler House…  I’ve been having driveway happy hours on Friday afternoons, and they worked out great. Now, what to do? I’ll figure it out! Ever had a case of the gout? Well, one of the medicines I take has a side effect of the gout… So, I take another medicine to combat that, but every now and then I wake up in the morning, and my toe hurts so darn bad! And it takes about 3-4 days before the stiffness and pain is gone…, and that’s what happened to me on Saturday morning! UGH! Steely Dan greets me this morning with their song: Do It Again…

Which is what the IMF is calling for…. If you haven’t heard, this was big news this weekend, and the IMF has called for a new Bretton Woods Meeting…  The details haven’t ben ironed out yet, but they will, and when they do I’ll let you know…  Immediately after hearing that announcement, my mind started racing, and coming up with questions… Is this the so-called New Reset?  What’s troubling the IMF?  You do know that the IMF is controlled by the U.S. right?  What isn’t controlled by the U.S. would be easier to name off items!  I’ve long thought that one day I would hear of a great meeting of finance ministers from around the Globe, and they would announce a new market for Gold… Gold would from then on have it’s price guaranteed to be $10,000 an ounce with the Gov’t taking all bids and offers at $10,000…  Wouldn’t that be something if this the meeting where comes to fruition?

OK… Well, Friday was a down day for the markets… stocks, currencies, and metals all got sold, as the Politics keep getting argued over and played by the stimulus negotiators… I told you previously, what the hold up was, and I still believe that to be thc case…  The markets seem to believe that every one needs some new free currency….  This is a slippery slope folks… But since we’ve been headed down the road to collectivism we might as well go through the door with both feet! I hate that we’re going in this direction, but the last time we had free markets that didn’t need bailouts and individuals that didn’t caah for clunkers, and tax rebates, and stimulus checks, was a long time ago my friends…

Boy that just changed my frame of mind… and now I’m depressed!  Oh, well, it is what it is, and there’s nothing I can do to change things…. So, as Neil Young sang, Don’t let it bring you down it’s only Castles Burning….

Gold closed down $9 on Friday and last traded at $1,900…  The euro was basically unchanged, after attempting to rally, it got snuffed out, and the single unit traded just a hair above 1.17, to close the week. When I last wrote to on last Thursday, the 10-year Treasury’s yield was .69%, and this morning it’s come back to .75%… Must have been a boatload of bonds getting sold late last week, eh?  Look the bond boys can buy or sell bonds to affect the yield on bonds… So, they, the bond boys, could be saying, we’re selling to push the yield higher because we fear inflation is rising…  

In the overnight and early trading markets things are looking like it will be an up day today… Gold has gained back the $9 it lost on Friday, this morning, and Silver is up 51-cents early… The dollar bugs either haven’t crawled out of the wall boards, to wreak their havoc in the currencies, or they’re not going to participate today, as the euro is rallying in the early morning…   

I finally finished my Cormoran Strike novel, all 965 pages of it, and went back to reading my book on Thomas Jefferson last week… I mentioned before that Jefferson was no fan of Hamilton, because it was Hamilton that had introduced legislature that would allow a Central Bank…  To which, Jefferson replied… “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills, or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” – Thomas Jefferson. (1743-1826).

Now, I was brought up with the understanding that Thomas Jefferson was the smartest man of his time, and if not the smartest, then in the top 5… I think reading this comment by Jefferson only deepens my understanding, for Jefferson back in 1800 thought so little of a Central Bank and their business, and it’s a part of history!  This is not a made up quote, folks… Jefferson actually said those words! And unfortunately, it appears that his foresight is coming into play now…   I’m just saying this to wake you up, and make you realize what the cartel, I mean the Fed is doing to us….

Well, to start this week off with a bang… I know that I talk about the price manipulators a lot, but what I haven’t done in a long time is explain just how this price manipulation is done…  In 1971, the U.S.’s Gold horde had fallen from around 20,000 tons of Gold or 2/3rd s of the worlds total, to the 8,000 some odd tons they supposedly hold now… This was the reason Richard Nixon took the Gold backing off of the trade dollar. (remember individuals weren’t yet allowed to hold Gold, stemming from the sham that FDR pulled by confiscating everyone’s Gold at $20 an ounce and then revaluing it at $35 an ounce now that the Gov’t owned it!, which was a devaluation of the dollar, but that point is often missed).  Was that our trade deficit kept growing, thus allowing foreign countries to submit their bill to the Gold Window and take away the Gold that was owed to them…

Over the years, Gold Leasing has become a very BIG part of every day Gold transactions…  So, the trade goes like this… The Central Bank that owns physical Gold, leases the Gold at a price, and interest to a bullion bank… The Bullion bank then sells the Gold to its clients, and takes those proceeds and invests the money in a higher paying interest rate than what they are being charged…   Now that all sounds hunky dory right?

Except…  The Bullion bank doesn’t have the Gold to deliver bank to the central bank on the lease agreement, unless…. They would buy back all the Gold they sold, at the current prices… But what if the price of Gold has gone higher by a lot, thus causing the bullion bank to take a loss?   Ahh, this is where it gets dicey folks…  The Bullion Bank figures out that they can hedge their trade by selling Gold in the futures market, thus keeping a lid on the price of Gold… And when the futures contract comes due, they had no intention of delivering the Gold, so they simply roll the futures contract at a new price… And if all that was only for the lease contract amount, no one would say a word…. But… When you produce more short contracts than Gold that is above ground…. And when you sell so many contracts that it would take 90 days of production to cover the short sales… Someone, the regulators, should be asking questions…  

And so when I say, the price manipulators showed up at the COMEX with arms full of short contracts, I’m telling you what is happening… Although, I’m sure most trades are electronic these days…  The same goes with Silver, of course….    However it takes 180 days of production to meet the short sales traded, with Silver!

And why doesn’t the U.S. Gov’t, Congress, The Treasury, the CFTC, anyone look into this price manipulation, and shut it down?  Because, as I’ve told you before, it is my opinion that the U.S. Gov’t is behind all this, gives the wink and nod to the JPMorgans and other price manipulators that they won’t be prosecuted or sent to jail for doing the Gov’t’s dirty deed… dirty deeds, done dirt cheap (AC/DC)… Sure they get their hands slapped for “spoofing”, which is a form of price manipulation, but not this short sale arrangement!  

And the reason the Gov’t is behind this, is they cannot, and I can’t emphasize that word enough, Cannot, allow gold to become more popular than their precious dollar.. . What if Central Banks decided to buy Gold instead of hording dollars? Oh, wait! China and Russia do that now… Hmmm…  Now, make sure to take good notes, because you’ll be quizzed on this at some point in the future!

This week’s U.S. Data Cupboard is a real let down following last week’s late week rush of data prints… A bunch of housing prints will be the Data Cupboard’s offering this week, and that won’t get me excited to see them one bit!   Speaking of late last week’s rush of data prints, we saw the the previous stimulus checks finally get spent on back to school clothes, and it jacked up Retail Sales to 1.9% gain in September… But before you go out and buy everyone at the bar a beer in celebration that the economy is recovering, you might want to stick around to see that Sept. Industrial Production came at a negative -.6%…  And Capacity Utilization came in weaker too at 71.5 in Sept. down from 72 in August…  I know I’ve told you all this 100 times before, but just for GP, Capacity Utilization is one of the forward looking economic prints we see… And it’s going the wrong way!

To recap… Friday was a “down day”, and today looks like it will be an “up day”, with Gold, Silver and the euro rallying in the early morning trading. The BIG NEWS from the weekend is that the IMF is calling for a New Bretton Woods… Wait, What?  Now I don’t know if this going to be the Big Reset that’s been talked about, But wouldn’t it make sense to do that at a get together of the world’s finance ministers? I’m just saying…  

For What It’s Worth….  OK… I know what a lot of people would say about this number, but before you jump to conclusions, think about it more… What I’m talking about is the final figure for the Budget Deficit this year… Yes, the virus spending really bloated the number, but… remember, before the virus hit our shores, the economy was already showing signs of going for a ride on the slippery slope… So, this is the report that the final figure was $3.1 Trillion… And it can be found here: 

Or, here’s your snippet: “Efforts to combat the coronavirus pandemic left the U.S. government submerged in red ink as its fiscal year came to a close.

The final tally for the budget deficit in fiscal 2020 came to $3.13 trillion, more than triple last year’s shortfall of $984 billion and double the previous record of $1.4 trillion in 2009, courtesy of a stimulus package passed that year to battle the financial crisis.

Most of the damage to this year’s budget came due to the CARES Act, a $2.2 trillion spending package that included extra unemployment compensation to workers displaced during the pandemic and forgivable loans to business as an incentive to retain workers.

Receipts for the year came to $3.42 trillion against outlays of $6.55 trillion, the biggest of which came during June when the government spent $1.1 trillion, according to the Treasury Department.

The fiscal year ended with government debt at just under $27 trillion, all but $6 trillion of which is held by the public.

Tax collections came in at 1.61 trillion for the year, $203 billion less than estimated in the budget. Corporate tax collections missed the budget estimate by $51.8 billion while social insurance and retirement receipts were $2.1 billion below.”

Chuck again…  Think about that for a minute, folks… of the $27 Trillion, $21 Trillion of it is held by the public,  and a lot of that is held by strangers…  

Market  Prices 10/19/20: American Style: A$ .7105,  kiwi .6642, C$ .7592, euro 1.1778, sterling 1.3000, Swiss $1.0989, European Style: rand 16.4620, krone 9.2940, SEK 8.7938,  forint 310.20,  zloty 3.8807,  koruna 23.2161, RUB 77.80, yen 105.34, sing 1.3573, HKD 7.7498, INR 73.28, China 6.6876, peso 21.08,  BRL 5.6086,  Dollar Index 93.26,  Oil $39.98,   10-year .76%, Silver $24.79, Platinum $873.00, Palladium $2,379.00, and Gold… $1,910.80

That’s it for today… a little heavy on Gold manipulation, and a little light on what’s going on, but it is what it is…  And a little later than usual… I had problems this morning, and that’s all I’ll say about that…  I head to the wound center this afternoon, from what I’m seeing, from the dressing changes I’ve made in the last week, there’s progress in healing going on… But why does it have to be so sloth-like?  The Chemo I take comes into play here, because it slows the healing process… so I guess that’s the answer to my own question! Duh!  Rainy days and Mondays… UGH!  But we’ve actually been in a drought, so the rain, to some, is welcome!  The Cyrkle takes us to the finish line today with their song: Red Rubber Ball…  Now, lets see how many of you have paid attention…  the Cyrkle was the opening band for what famous band?   The answer tomorrow… I hope you have a Marvelous Monday, and will Be Good To Yourself!

Chuck Butler