Author: admin

January 12, 2022

* Currencies & metals both rally strongly on Tuesday

* Chuck is having a difficult time keeping from laughing! 

Good Day… And a Wonderful Wednesday to you! Today is my oldest, Son’s birthday and Adrew or Andy as he prefers to be called is 40 years old today… 40 years ago, on that day, it snowed 9 inches, and getting home that night was an event for yours truly. The next day I picked up Andrew’s older sister, Dawn, and we went to a flower shop. I set her up on the counter, and she proudly told the florist, that she was now a Big Sister!  I’ll always remember this day, because, being the silly people we were back then, we didn’t want to know the sex of the baby to be born, but by all measurements it was going to be another girl… So, when Andrew was born, I couldn’t believe my eyes that it was a boy! So… Happy Birthday, Bud…  I hope your day is grand!  Three Dog Night greet me this morning with their song: Mama Told Me Not To Come…

Well, Tuesday turned out to be a good day for currencies, metals, stocks, and Oil, And not so good of a day for the dollar…  The dollar began the day down a little from the previous day, and it drifted along until Fed/ Cabal/Cartel Chairman Jerome Powell spoke to Congress…  Ok, before you read this next part, strap yourself in so you don’t laugh so hard that you fall out of your chair… BUT… Jerome Powell, told Congress that the Fed can squash inflation, without doing any harm to the economy…       That’s right, that’s what he said, and I’m laughing so hard right now it’s difficult to type!  So, now Powell has become a comedian?  Well, the sad thing here is that the Fed’s record for soft landings is a big fat zero for how ever many times they’ve tried, and with that in mind, Powell is serious! Serious as a heart attack! I still can’t believe he said that… 

And you know what’s even more funny that that? The Fact that the stock jockeys believed him!   They truly believe that he will bring inflation under control, and not harm the economy…  The stock jockeys rejoiced, and put an end to the 5-day rout in stocks… At least for one day that is… I’m not a stock jockey, and I don’t play one on TV, nor did I stay at a Holiday Inn Express last night, but I’m of the opinion that stocks are in for a rude awakening once the Fed/ Cabal/Cartel get going on their forecasted rate hikes…

The stock jockeys believe that the Fed will reverse their course and cut rates once the rot on the stock market’s vine reaches 30% loss…   Hmm… history tells us that in 2000 the stock market had given up 30% and the fed still hiked rates 50 BPS…   20 years ago, now seems like a lifetime ago, doesn’t it? It feels to me like the dot.com bubble that burst in 2000, happened in the 60’s…  And not just 22 years ago.

Ahhh… the 60’s… We, as a country were still a creditor nation… A large portion of the population of the U.S. have only known the U.S. as a debtor nation… The 60’s had its own problems, it was no Garden of Eden, but life was still simpler then… 

So… the dollar got sold after this talk by Powell, because currency traders aren’t dummies all the time, some times they actually see the writing on the wall, or read the Pfennig! HA!  You see, currency traders heard Powell say, that the rate hikes will come, but not strong rate hikes, and probably not as many as is being talked about….    The BBDXY, which began the day at 1,175.67, ended the day at 1,172.67, and Gold rallied $20.10 on the day to close at $1.822.70, and Silver gained 32-cents on the day, to close at $22.87…  A very good day for the metals… A very good day for the currencies…

And the price of Oil had a very good day too, rising above the $81 handle on the day…My spider sense is tingling here, folks… I’m getting the sense that by year-end, Oil will be back to $100… Inflation of course will push it along, along with the effects of slowdown from the omicron or as Dave Gonigam of the 5-Minute Forecast calls it the Omigod variant…

In the overnight markets last night…. There wasn’t much movement in the currencies, and Gold and Silver are down just a bit to start the day.  The BBDXY which ended the day yesterday at 1,172.67, starts today at 1,172.49, so as Zuzu Bailey said, “just a smidgen”…  There’s been just a slight move downward in the dollar overnight, nothing like we’ve seen the first two nights this week, where traders there would push the dollar down by larger margins.  And the price of Oil keeps inching higher, and is within spittin’ distance of $82 this morning.  OK, Jay Powell, we’re waiting… and not patiently either! 

Each month, I’m treated to a newsletter that Pfennig Readers writes for his investment company. His name is John Dienner, and his newsletter is called: Ruminations of the World Economy… I don’t think he’ll mind too much if I borrow a brief snippet from this month’s letter, so here goes:

“The Fed printed more money in just one month last year than the nation printed during its first 200 years. You may remember from high school physics class that for every action there is a reaction (Newton’s Third Law). That reaction might not be immediately observable but there will always be a reaction. The reaction to the rapid expansion of the money supply can be described either as “price inflation” or “dollar devaluation.” They are two sides of the same coin. Your money buys less than it did before the money printing.” 

Chuck again… Remember months ago, when I was waving my arms over my head and yelling from the rooftops that this inflation that we were seeing was 1. Not transitory, and 2. Not wage influenced, that it instead was a Money printing phenomenon?   That’s exactly, what’s going on here folks… All that money printing… Did you know that in one month of the last year, the Fed/ Cabal/ Cartel, printed more currency than they did in the country’s first 200 years?  Ok, the Creature from Jekyll Island, AKA The Fed/ Cabal/ Cartel, has only been around since 1913…  I used to, many years ago, greet people by saying, Repeal 1913…  

For those of you not aware, not only did Woodrow Wilson, our country’s worst president, shove the Central Bank down our throats, he also introduced the 1% tax on $3,000 income…  Got us into WW1… And he wasn’t finished with those  awful deeds. He went on to change the way States sent Senators to Washington D.C.  Before 1913, Senators were appointed by the State’s Gov. he then went to Washington with his state’s best interests in hand, if he failed, he was simply recalled and someone new was sent in his place… That wasn’t good enough for Wilson, he changed it to a voted in position, without recourse if the Senator was a dud… Except to vote him out at the next election.

Ok… I really went off on a tangent there, sorry…  Yesterday, I had in the FWIW section an article about how U.S. Consumers are digging big holes again with debt…  and using up savings…  To follow that up, there was this blurb on CNBC.com, “More than three-quarters of Americans, or 78%, have received some form of pandemic relief since March 2020, which either went toward buying necessities, savings or paying down debt, according to a NerdWallet poll of more than 2,000 adults.

And yet, more than one-third said their household financial situation has gotten worse over the past year.

After Americans paid off a record $83 billion in credit card debt, credit card balances are on the rise again, along with mortgage, auto and student loan debt.”

Well, this morning we’ll see the color of the Gov’t’s stupid CPI (consumer price Index) for Dec. This report should show that inflation continued to increase in December, but we are dealing with the BLS and a Gov’t issued report here folks… So one never really knows what to expect. I’ll be checking John Williams Shadowstats.com for the real inflation rate later in the day… Recall that last month the stupid CPI showed annual inflation rising 6.8%, while shadowstats.com showed it rising 14%…    Prices are going up, packaging is shrinking, and the Fed/ Cabal/ Cartel is playing their fiddle while Rome burns…

The U.S. Data Cupboard also has the Federal Budget number for Dec. and the Beige Book which is a collection of the regional president’s views on their local economy.  I don’t really think too many traders pay attention to the Beige Book any longer, so we’ll just skip ahead and forget about that one today.

Yesterday’s Data Cupboard has the Small Business Index for December, and to my surprise, the index number increased! Wit in the world does that work?  We’re in the middle of the “Great Resignation”, the new Covid variant is causing all sorts of problems with healthy staffing, and Small Businesses are saying, “Hey it’s all good!”?  Mark me down as skeptic…

To recap… Powell sure threw a cat among the pigeons yesterday, by telling Congress that he has bring inflation under control and not harm the economy, in other words, provide a soft landing… Chuck was laughing so hard he had difficult typing that line from Powell… Any way, the stock jockeys bought it hook, line and sinker, stopping their 5-day rout, but currency and metals traders weren’t buying it, and the dollar got sold, and Gold & Silver had nice days, while the price of Oil bounced higher still…  You know it occurs to me that the POTUS told us a few weeks ago that he was going to bring the price of Oil down… Hmmmm…

For What It’s Worth…. Well… I had a couple of articles lined up for today, and then I came across this article that superseded those other article, because this one is about Silver… That poor metal that has so many paper short trades against the metal that it has to fight like the dickens to rally… And it can be found here: The Key Factor In Silver Is A “Concentrated Short Position On Comex” | ZeroHedge

Or, here’s your snippet:” This is an interview with Andy Schectman, President & Owner of Miles Franklin Precious Metals, a company that has done more than $5 billion in sales.

Q: Hi Andy, thanks for taking the time for my Fringe Forum readers yet again. Let’s talk about what’s new: why do you think the silver/gold ratio has gone back above 80?

A: The key factor in silver is the concentrated short position on Comex. Eight banks essentially hold the entire net short position in Comex silver. This represents more in terms of real-world production than the concentrated short positions in any other commodity traded on the exchange.

JP Morgan paid a $920 million dollar fine for manipulating the metals market last year and now Bank of America is holding a massive, short position in silver.

Why are a handful of the biggest banks in the world so aggressively holding down the price of silver? Does it matter that JP Morgan has amassed over one billion ounces of physical silver while holding down the paper price? Do you think they know where the price is ultimately going?

The massive industrial expansion in green and digital applications and the global explosion in monetary demand is now putting pressure on these manipulative banks. Increasing investment demand has a magnified impact since the large industrial players must purchase silver for their products no matter what. The silver market moves at the margin, so the added demand by investors, at the margin, is key.  

So, it stands to reason that the banks are manipulating the price because they want to make silver look like a poor an investment, in my opinion, this is the only reason for silver’s obvious underperformance and an 80 to 1 silver to gold ratio.”

Chuck Again… This guy, goes on to talk about how the upside for Silver is just waiting to explode…  I couldn’t agree more! 

Market prices 1/12/2022: American Style: A$ .7208,  kiwi .6778, C$ .7973, euro 1.1360, Sterling 1.3632, Swiss $1.0826, European Style: rand 15.4874, krone 8.7375, SEK 9.0418,  forint 313.44,  zloty 43.9190,  koruna 21.5071, RUB 74.73, yen 115.43, sing 1.3514, HKD 7.7947, INR 73.84, China 6.3704, peso 20.41, BRL 5.6319,  BBDXY 1,172.49, Dollar Index 95.64,  Oil $81.86, 10-year 1.74%, Silver $22.83, Platinum $981.00, Palladium $2,006.00, Copper $4.47, and Gold… $1,818.20

That’s it for today…  Well, my Billikens lost their road Basketball game in Dayton last night… But there was good news from St. Louis U. as 4 of their soccer players were taken in the first round of the draft… It was an ugly day here yesterday, as it was rainy and windy all day, I didn’t take a step outside and stayed in all day!  You have to experience rainy days to appreciate the sunny days I’ve always contended…   Our Blues are hitting on all 8 these days, and hope that they have gotten past all their injuries and sicknesses, so that they can keep this season going the way it’s gone so far! The Blues sure showed their organizational depth during their bouts with Covid…  I’m going to circle back here and make sure my son Andrew, celebrates his day in style, and has a grand day today for his birthday! I read yesterday where a doctor said that 80% of Floridians would end up getting the Omicron variant…  WOW! That’s a lot of older aged people getting sick! I sure hope he’s wrong as wrong can be! Remember the magic lotion I told you I was to put on the spots on my head that wouldn’t heal? Well, the spots are gone! I have a smooth bald head once again! So, the magic lotion worked! YAHOO! 10CC takes us to the finish line today with their song: I’m Not In Love (Mike Meyer’s old song!)  I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself, while Being Positive and testing negative!

Chuck Butler

January 11, 2022

* Dollar bounces back yesterday in a small way

* Powell, says he will stop inflation from taking root…  Really, he did! 

Good Day… And a Tom Terrific Tuesday to you!  I couldn’t stay awake last night to see the end of the college football Championship Game. So, I didn’t know until this morning that Georgia, had won… It didn’t surprise me any, because for 1. I said last week that it’s difficult to beat a team twice in the same season, and 2. I said if Georgia’s vaunted defense could come up with a plan to stop Bryce Young, Alabama’s QB, they had a chance to win… And from what I did see last night, it was a completely different game from the SEC Championship Game between these two same teams. . Home ice did great things for our Blues again when they won their game Sunday night 2-1, with a 3^rd period goal with time expiring… The game was against Dallas, and it reminded me of the playoff game VS Dallas, when we won in the 2^nd OT…  2-1…   Depeche Mode greets me this morning with their song: Policy of Truth…

Well, the dollar did bounce back a little yesterday, with the euro giving back about 25 BPS of its gain from Friday, and the BBDXY closing the day at 1,176.28, after starting the day at 1,174.68… The Data Cupboard was basically empty, and like I said yesterday, calmer heads probably came to the front of the line to correct the massive selloff of the dollar from Friday…  So, for once I had yesterday pegged… Which only proves that even a blind squirrel can find an acorn!  

Gold found a way to sneak around the price manipulators long enough to carve out a $4.60 gain to close at $1,802.60, while Silver gained 9-cents, to close at $22.55…  I was reading Dave Gonigam’s 5 Minute Forecast yesterday, and James Rickards was featured with his outlook for Gold in 2022…  So, I’m going to borrow some of that  for this discussion. Here’s James Rickards…

“The rally from Dec. 16, 2015, to Aug. 6, 2020, was a 97% gain in gold prices in 56 months. Gold fell from the peak of that rally and has been consolidating around $1,800 per ounce for the past 17 months. Another 97% rally would take gold to $3,550 per ounce.”

“The first leg of that rally would put gold at $2,070 per ounce later this year.” – James Rickards in the 5-Minute Forecast 1/10/2022.

In the overnight markets last night….  The currencies fought back and are back to taking shots at the dollar this morning…  There’s some strange trading going on these days, folks… I can’t put my finger on it, but it seems so stange to me, as we see the dollar get sold like funnel cakes at a State Fair one day, and then the next day not so much, but in the overnight markets they continue to take shots at the dollar… So, are the foreign markets saying “no mas” for dollars, while here in the U.S. the dollar still has the PPT and their ESF treasure chest to protect it?  

Any way…  Gold is up in the early trading this morning by $5, and Silver is up 14-cents, as we start our day.  The price of Oil has bumped higher and now is just a short distance from the $80 handle. Bonds were steady yesterday, and throughout the night, with the 10-year’s yield at 1.75% this morning… 

In Australia, where the freedoms of the people have been taken away, and if you try to protest, the gov’t will sic an attack dog on you, and throw you in jail…  things have gotten very out of hand here, but that hasn’t stopped the people staying at home from buying on line. Retail Sales for Australia were very strong in December, and in the old days would have bumped the A$ upward, but in these days of trader sentiment directing the flows of currencies, the A$ just wallowed around its current level…  I keep wishin’ and hopin’ and prayin’ that fundamentals return to trading some day, in the not too distant future! 

OK… I was minding my own business yesterday, when this blurb came across the screen on Bloomberg.com, It basically said that Jerome Powell said that the Fed will ensure that Inflation doesn’t take root in the U.S. economy…   Wait! What?  You see what he’s doing there don’t you? He’s basically saying that his Transitory term was good until now, and it’s just now that inflation is taking off…  What a BUNCH OF BUNK!  He’s so full of dookie that his eyes have turned brown! Jeez, Louise, I just totally dislike it when the Red Heads thinks we’re all a bunch of idiots that hang on his every word…   The only reason I ever listen to what he has to say, is to pick out all the lies he tells!

I had better talk about something else now or who knows what kind of trouble I’ll get in if I continue with that discussion…. No, wait! I don’t have a marketing department any longer that calls me on the red carpet to yell at me for saying stuff they didn’t agree with!  I can’t begin to tell you how relieved I am and happy I am that I don’t work/ write under that iron curtain any longer!

Last year, long time author, and publishing guru, Bill Bonner, called what’s going in the markets these days, “The everything bubble”…  And if this wasn’t proof that people have gone completely mad, I don’t know what is… What am I talking about?  News that a Hollywood female had captured her farts, and was selling them as NFT’s…  That’s when you have to say, enough is enough, right?   Crazy… and not the song from Patsy Cline!

NFT’s, cryptos, spacs, you name it, it’s all a bunch of stuff that wouldn’t even exist, if it weren’t for the Fed/ Cabal/ Cartel’s easy money, and zero interest rates…  But don’t look for them to take any responsibility for all this madness, folks… That’s just not their cup-o-tea…

The U.S. Data Cupboard is still basically empty today, with only the small business index on the docket, and something that most traders will not even notice the print.  Tomorrow, we’ll see the stupid CPI (consumer inflation) for December… I’m sure that the BLS is cooking the books and massaging the numbers the best they can, but in the end I’m pretty sure inflation will show that it continued to rise in December, but that’s tomorrow, so we’ll let tomorrow be…

To recap… The small bounce that I thought we would see yesterday, did materialize, and the dollar fought back throughout the day, but in the end, the gain was small, compared to the sizeable loss from Friday. Gold gained $6, and James Rickards gives us his thoughts for Gold’s performance in 2022…  Jerome Powell is still trying to throw the dogs off his scent of Transitory, and in the overnight markets…. the dollar returned to the selling blocks, and has Chuck thinking that there’s a new trading pattern in the dollar and currencies… 

For What It’s Worth… Ok. for some time now I’ve talked about the de-dollarization plans of Russia and China, and how their influence on other regional countries could become a problem for the dollar. Well, here’s an update on the dollar distribution that appears to be dwindling… This article can be found here: US Dollar’s Status as Dominant “Global Reserve Currency” at 25-Year Low. And USD Exchange Rates? | Wolf Street

Or, here’s your snippet: “The global share of US-dollar-denominated exchange reserves declined to 59.15% in the third quarter, from 59.23% in the second quarter, hobbling along a 26-year low for the past four quarters, according to the IMF’s COFER data released today. Dollar-denominated foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, and other USD-denominated assets that are held by foreign central banks.

In 2001 – the moment just before the euro officially arrived as bank notes and coins – the dollar’s share was 71.5%. Since then, it has dropped by 12.3 percentage points.

In 1977, when inflation was raging in the US, the dollar’s share was 85%. And when it looked like the Fed wasn’t doing anything about inflation that was threatening to spiral out of control, foreign central banks began dumping USD-denominated assets, and the dollar’s share collapsed.

The plunge of the dollar’s share bottomed out in 1991, after the inflation crackdown in the early 1980s caused inflation to abate. As confidence grew that the Fed would keep inflation more or less under control, the dollar’s share then surged by 25 percentage points until 2000 when the euro arrived.

Since then, over those 20 years, other central banks have been gradually diversifying away from US dollar holdings.   

Not included in global foreign exchange reserves are the assets held by a central bank in its own currency, such as the Fed’s holdings of dollar-denominated assets, the ECB’s holdings of euro-denominated assets, or the Bank of Japan’s holdings of yen-denominated assets.”

Chuck again… So what do you make of that? Are you on the same page as me on this, that countries around the world are deliberately lowering their exposure to the U.S. dollar?   It would make sense, given the news that keeps coming out that Central Banks around the world have been increasing their holdings of Gold… 

And what have I always told you?  Follow the money…  I’ve said this before, but it really seems to be en vogue now, that if Central Banks around the world are buying physical Gold, should you too?  Forget about the Fed/ Cabal/ Cartel and what they’re doing, they’re a bunch of knuckleheads, that doing their best imitation of an ostrich right now, with their collective heads stuck in a hole.. 

Market Prices 1/11/2022: American Style: A$ .7177,  kiwi .6762,  C$ .7910, euro 1.1335, sterling 1.3592, Swiss $1.0791, European Style: rand 15.5967, krone 8.8256, SEK 9.0846,  forint 315.18,  zloty 4.0046,  koruna 21.4653, RUB 74.83, yen 115.44, sing 1.3534, HKD 7.7967, INR 73.82, China 6.3738, peso 20.36, BRL 5.6547,  BBDXY 1,175.67, Dollar Index 95.86,  Oil $79.46, 10-year 1.75%, Silver $22.69, Platinum $956.00, Palladium $2,012.00, Copper $4.37, and Gold… $1,808.10

That’s it for today… Man I was really riled up there for a minute this morning, and I haven’t even had a cup of coffee yet!  What an absolutely beautiful day it was here yesterday, Warm sun, blue skies, a slight breeze coming off the ocean, and I took advantage of that by sitting out and reading for two hours… At that time I thought that was enough sun for me in one day. We’ve had strong storms come through in the middle of the night the last two night, with thunder and lightening that lit up the sky. And as long as mother nature wants rain at night, and sun by day, I’m good with that! I’m so depressed about baseball folks… They still have time to get something done before Valentine’s Day, but it doesn’t appear that they are even close to an agreement…  And to me that’s so sad…  Baseball is in trouble, especially if they don’t start the season on time… Oh, well, I can  do nothing about that, so I’ll move on… The Gin Blossoms take us to the finish line today with their song: Hey Jealousy… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! And don’t forget to Be Positive, Test Negative!

Chuck Butler

 

January 10, 2022

* Currencies & metals rally on Friday after jobs data

* U.S. Consumers’ savings are running dry….

Good day… And a Marvelous Monday to you! How about those big wins for the basketball teams of Mizzou and St. Louis U! Both won their games on Saturday, Mizzou VS Alabama, and STLU VS Iona… And former Mizzou Linebacker Nick Bolton scored the winning touchdown in the Chiefs game on Saturday, while former Mizzou Quarterback, Drew Lock, performed admirably for the losing Broncos…  It was a great day down here on Saturday too… Warm, sunny, and certainly not the 14 degrees that was registering back home in St. Louis!  Well, I’ve got a lot to talk about today, so I had better get going on that!  Kansas greets me this morning with their song: The Wall…

One week down, 51 to go… Well, that is how I look at years when they begin… And then wonder what will happen in those next 51 weeks…  Especially this year, as this year seems to have a lot going against it…  Just off the top of my head, we have Covid still ravaging health for people, we have an inflation genie that won’t go back in the bottle, we have Mid term elections, we have a Central Bank that’s between a rock and a hard place, we have saber rattling in Ukraine, Taiwan, Kazakhstan, and other places in the world, that the U.S. will feel the need to be the policeman in, and we have so much debt in the world, that only a major recession, will stop these knuckleheads from adding more debt…   So, how are those things going to play out in the next 51 weeks?  Boy, I’m very upbeat this morning, eh?  NOT! 

OK… The Jobs Jamboree on Friday was very disappointing in terms of job creation, and that spooked the markets Big Time, and suddenly the dollar got sold, and sold, and sold… The BBDXY began Friday morning at 1,180.73, and ended the day at 1,174.63… That’s more than a 6 point drop in the index, and that was reflected in the rise of the euro which ended the week at 1.1362, and the other currencies followed the Big Dog off the porch to chase the dollar down the street.

Gold was still price suppressed but was able to gain 6.10 on the day to close at $1,798.00, and Silver gained 18-cents on the day to close the week at $22.46… The price of Oil remained strong, even though it slipped a little in price on Friday, and the 10-year Treasury saw its yield rise to 1.76%… (for all of you new to bonds, when the yield rises, that means that the price of the bond went down… ) All the movements were a result of the Jobs Jamboree…

Speaking of the Jobs Jamboree from last Friday… Were you as shocked as I was at the difference between the BLS jobs created number of 193,000, and the ADP number of 807,000? How on earth can that happen I said to myself….  I could bust my brain for days over this conundrum…  Long time readers know that I’ve said that the U.S. data people should use the ADP report as the true jobs report.  ADP provides the payment of wages systems in just about every company in the U.S., so if new hires are made, they would be the 2^nd to know…  But 807,000 new jobs in December was quite puzzling to me given the fact that I keep pointing out how many Job Quits there are each month, in this new “Great Resignation”…  So, something is broken somewhere, folks…  And I would think that a financial journalist would be asking some stinging questions about now… But then didn’t I just ask if there were such beings any longer?  So, now I’m even more confused!

So, anyway, the awful jobs Jamboree of 193,000 jobs created in December caused the dollar to drop like a rock on Friday…  The skinny behind the dollar drop, was with the labor market slowing down, it’s revealing the effects of the omicron variant on businesses, and that will stall inflation, and thus the need for the Fed/ Cabal/ Cartel to act so swiftly with regards to hiking rates. And to add to the pressure, most economists believe that the effects of the omicron variant isn’t fully priced in December, and that we’ll really see the effects in the January numbers… 

But here’s where the markets lost sight of what was really important in the Jobs Jamboree’s report…  Wages increased at the fastest rate in 2021 in over a decade… So if fewer people are getting jobs, and wages are increasing, that’s a recipe for wage inflation…  I’m just saying..

So the Gold traders didn’t know which way to go…  Was the rate hike being delayed? Or was wage inflation soaring?   Hmmm…  I would think that today, we’ll see some calmer heads prevail, and the dollar should bounce back a bit, because Friday’s downward move was just a bit overdone, in my opinion, given the wage increases…

And after having just said that the dollar should bounce back a little today… In the overnight markets last night… the dollar did bounce back a bit with the DDBXY rising to 1,175… Not a huge rise, but some correction nonetheless.  Gold is up $3 in the early trading today, to return to the $1,800 handle, and Silver is up 7-cents to start the day.   The price of Oil slipped a little more and trades at $78.78 this morning, while bonds held steady overnight.  

Well… let’s see… Oh, yes, I wanted to mention this little ditty… Have you heard that Lola is calling for 4 rate hikes from the Fed in 2022?  For those of you new to the Pfennig, Lola is the name I’ve pinned on Goldman Sachs, because from the move Damn Yankees, we know that whatever Lola wants, Lola gets, right? Well, that’s Goldman Sachs for you right there in a nutshell… 

So, Lola thinks that the Fed has the guts, and conviction to hike rates 4 times in 2022?  Well, if that’s so, then that confirms my belief that the Fed will go at inflation with 25 BPS rate hikes…. So, if Lola is correct, then at the end of this year the Fed Funds rate will be 1.00%… And real interest rates in the U.S. will remain negative!  

But here’s the skinny on all that folks… Once the stock market continues its current slide, and begins to get ugly, the Fed/ Cabal/ Cartel will cower to Wall Street once again… I read the other day that a 30% slide of stocks would bring about a major recession in the U.S.   

I say, bring it on! The recession that is… It’s time that our econonmy cleaned out all the dead wood, and companies that need to fail, do just that, and then and  only then will we as a country, be able to begin to start over, and the new growth cycle can begin… But only if the excesses of the last 10 years get cleaned out first…  That’s my story and I’m sticking to it! 

The U.S. Data Cupboard starts out very slow with prints this week, but by Wednesday it begins to get geared up for a crescendo on Friday… Wednesday we’ll get the stupid CPI for December, and even with all the hedonic adjustments of CPI, I think the index will still show an increase in consumer inflation…  I really do believe that a deep dark recession in the U.S. is the only thing that will put the inflation genie back in her bottle, because the tools that former Central Bankers had at their disposal to combat inflation are no longer available to them because of the debt in this country… And once again I’ll point out that debt does matter… And while it didn’t matter until it did, is a lesson I hope everyone learns…  

To recap… Well, Friday’s Jobs Jamboree had a disappointing surprise in the job creation part of the Jamboree, and that sent the dollar to the woodshed for the day, ending the day down 6 index points. Wages showed a significant increase though, and the markets just skipped right over that fact, that I think today they will correct…   Gold had a mixed up day on Friday, but was able to gain $6 in the end, and in the overnight markets… There’s been a little bounce back in the dollar as Chuck thought there would be, and with no data today, the trading will continue to be mixed… 

For What It’s Worth… This is a very scary article folks, so put away the sharp objects before proceeding… U.S. Consumers are digging themselves in a deep hole, folks… You may say, “That’s not me”, but look to your left and then to your right, and then across the street, because most likely one or more of those homes are digging holes… So, here’s the link to the article: Shocking Consumer Credit Numbers: US Credit Card Debt Soars Most On Record With Savings Long Gone | ZeroHedge

Or, here’s your snippet: “While it is traditionally viewed as a B-grade indicator, the November consumer credit report from the Federal Reserve was an absolute stunner and confirmed what we have been saying for month: any excess savings accumulated by the US middle class are long gone, and in their place Americans have unleashed a credit-card fueled spending spree.

Here are the shocking numbers: in November, consumer credit exploded by a whopping $40 billion, double the expected $20 billion print, more than double the $16 billion October number, and the highest on record!

And while non-revolving credit (student and car loans) jumped by a solid, if not necessarily remarkable $20 billion, this was only the 7th biggest increase for the series in record…the real stunner was revolving, or credit card debt, which more than tripled in November, soaring to $19.8 billion from $6.6 billion in October, by far the highest such print on record.

While this unprecedented rush to buy everything on credit ahead of and during the Thanksgiving holiday should not come as much of a surprise, after all we have repeatedly shown that for the middle class any “excess savings” are now gone, long gone…

…the fact is that most economists – such as those at Goldman Sachs – anticipate that continued spending of savings is what will keep the US economy levitating in 2022. Unfortunately, as today’s consumer credit numbers clearly demonstrate, any savings that US middle class households may have had courtesy of stimmies, are now gone. The implications are profound: any model that projected that US spending will be fueled by “savings” can now be trashed. And since this is most of them, the consequences are dire as they confirm – once again – that the Fed is tapering, QTing and hiking right into a recession.”

Chuck again… I think I have said enough above, and will just let this simmer…

Market Prices 1/10/2022: American Style: A$ .7191,  kiwi .6770,  C$ .7920, euro 1.1328, sterling 1.3528, Swiss $1.0850, European Style: rand 15.5981, krone 8.8285, SEK 9.0847,  forint 315.86,  zloty 4.0018,  koruna 21.4954, RUB 74.95, yen 115.24, sing 1.3543, HKD 7.7950, INR 73.96, China 6.3539, peso 20.35, BRL 5.6797,  BBDXY 1,175.33, dollar Index 95.91,  Oil $78.78, 10-year 1.76%, Silver $22.54, Platinum $970.00, Palladium $2,040.00, Copper $4.36, and Gold… $1,801.10

That’s it for today… Sorry to be the bearer of all the bad news today, but you shouldn’t shoot the messenger! You know, I try to lay things out for people to make their own decisions about, regarding their investments, and sometimes things get ugly… So, the NFL playoffs are set, and will begin this upcoming weekend… Our Blues have gotten through their rash of Covid absences, and injuries, for now that is, and will get their next 4 games on home ice, which has been quite kind to them this year. The College Football Championship game with Alabama VS Georgia will be played tonight…It will be interesting to see if Georgia’s vaunted defense has come up with a solution to stopping Bryce Young, the Alabama QB… If they do, then they have the opportunity to win…  I’m just saying…  I’ve got a treat for my listening ears this morning, it’s an oldie but a goodie… It’s Barbara Lewis singing her song: Baby I’m Yours…  Don’t know it? YOUTUBE it, and make sure it’s Barbara Lewis’s version… I hope you have a Marvelous Monday today, and please Be Good To Yourself, and don’t forget to Be Positive, Test Negative!

Chuck Butler

 

January 6, 2022

* Currencies & metals get sold on Wednesday

* No reserve requirements for banks? That should work out just dandy… NOT! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  The Blues played on TNT last night, which meant that I got to watch them play the Penguins… The Blues held the lead in the game for 2 periods, and then….   the roof collapsed on them, and they gave up 4 goals in the 3rd period to lose the game… UGH!  Boys, the game is 3 periods, in case you’ve forgotten. OK… My St. Louis U. Billikens had their basketball game postponed VS LaSalle and now look to hopefully get to play their next game on the schedule. I saw the sun out yesterday, midday, and got my stuff together to go down and sit in it and read, and by the time I got down there, the clouds had moved in… I still sat out on the deck to read my book, but with no sun, it wasn’t doing me any good… Other than breathing salt air! HA! The Moody Blues greet me this morning with a song from their Seventh Sojourn album, which is one of my all time fave albums, the song is: When You’re A Free Man… 

Well, when I left you yesterday morning, the dollar was getting sold, and Gold was up a buck or two in the early trading… About mid-morning, the ADP Employment Report and blew the expectations of 375,000 job created in Decmber, out of the water, printing 807,000 jobs created in December…  OKI, now have the government’s cooks and massagers finally gotten to the folks at ADP? I mean, doesn’t that number just look preposterous?  I mean just last week it was reported that the Job Quits in November were 4.5 Million, and in Rocktober they were 4.2 Million?  So, suddenly, out of thin air, everyone decided to go back to work in December?  Come one, I was born, just not yesterday!

So, suddenly yesterday, the dollar selling stopped, and became dollar buying, and then the powers that be went to work on Gold, and the whole day turned ugly, for the currencies and metals that is… Not so ugly for any one of the 807,000 people that got a new job in December!

The BBDXY which began the day at 1,177, closed the day at 1,179… And Gold which started the day up a buck or two, ended the day down $3.90, to close at $1,811.50, and Silver lost one shiny quarter on the day to close at $22.88…  The Price of Oil kept its head above the $77 handle, but lost some ground on the day, and then the 10-year Treasury’s yield rose to 1.69%, and some pundits thought that the 4 BPS rise in yield was responsible for the dollar turn around…

But when you get down to the cheese that binds…. The ADP Employment Report, and then later in the day the FOMC Meeting Minutes, probably were more responsible for the dollar turnaround on the day. I don’t get why the markets acted so surprised by the meeting minutes, which basically told us what we already knew… that the Fed/ Cabal/ Cartel has finally recognized inflation as a problem and will speed up their tapering in an effort to get to hike rates sooner than expected this year…  Nothing new here, but the markets reacted as if it was the first time they had heard these words… 

The Good Folks at GATA sent me a note yesterday, quoting Brien Lundin, of the New Orleans Investment Conference fame, so I thought I would share with you his thoughts on the FOMC Meeting Minutes: “Amazingly, the minutes showed that Federal Reserve officials and economists had apparently just discovered the rampant price inflation that everyone else had been talking about for months.”

Chuck again, yes, Brien believes, like I too believe,  that now that the Fed is actually acknowledging inflation, that Gold will get on its horse and ride to higher ground…  But there’s always those pesky, do no good, evil minded price manipulators hanging around…

In the overnight markets last night…. the dollar buying continued overseas last night, and the BBDXY rose to 1,180 to start today. Gold is getting sold in the early trading to the tune of $11.20, and Silver is getting sold too, as it is down 52-cents this morning…  The price manipulators just keep pushing these metals prices downward, until they reach a price that’s predetermined when they started the attack… Once achieved, the prices of the metals will rebound once again…  

The price of Oil has gotten back on its horse in trades with a $78 handle this morning… And the 10-year’s yield rose another 4 BPS overnight to trade with a 1.73% yield this morning.  This would be a good time to remind you that I said months ago that by the time I’m sitting in my seat at Roger Dean Stadium watching my beloved Cardinals play spring training games, the 10-year’s yield will be 2.00%…  

Still the 10-year’s yield will be very negative in real interest terms, but at least it will look presentable when meeting the dad, at 2.00%… 

In 2012 or 13, I wrote a Sunday Pfennig, and it was titled: Chuck’s Debt Solutions…  You see I had been challenged by management to stop complaining about rising debt, and come up with a solution to reducing the debt. So, I not only wrote about one solution, I wrote about 10 of them! That’ll show ‘em I said to myself!  But my debt solutions fell on deaf ears and not only did we, as a country keep adding to debt, we doubled up on it!

One of those solutions were to quit spending money on things we didn’t have money to spend… That would mean to quit all wars… The war on poverty, the war on drugs, the war in the Middle East, the war on terror, and all other wars… In 2020, we added another war to our list of things we didn’t have the money to spend on, the War on Covid…

We have failed miserably at trying to win these wars… We’ve thrown more money at them than you can shake a stick at, and in the end we as a country are deeper and deeper in debt, and there’s nothing that will stop it from continuing to grow now… I wonder how much better our financial statement as a country, would look today, if we had stopped all that deficit spending, 10 or so years ago…

Oh, I had a plan for retirees, I had a plan for after ending the wars, bringing back the soldiers and putting them on our borders, to better protect our country from outsiders… And stuff like that, if more people had read that Pfennig, I might have received a NOBEL!   Yeah, right, as if!

OK, back to current times… This trip back in time was brought to you by the Good Folks at The Daily Pfennig!

OK… Under the double heading of : We’re still turning Japanese, yes, I really think so… and Now Tell me how this ends up good?

As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020.  This action eliminated reserve requirements for all depository institutions.

So, let’s break this announcement down… Basically it now means that banks can lend out 100% of deposits they take in… I shake my head in disgust… I worked for many years in a bank a few them for that matter, and I completely understand how removing reserve requirements ease life for a bank…. And then you take in the fact that 5 of the largest banks in this country were receiving daily injections of cash in the repo markets from the Fed/ Cabal/ Cartel… And doesn’t that just make your skin crawl?

And the first point of us turning Japanese, yes, I really think so… is just follow up to what I’ve been writing about for over a decade now, and that’s how the U.S. seems to following Japan’s financial moves to a T…  Oh, and Japan removed their reserve requirements a year or so ago…

Put that announcement in your journal or notebook or whatever you keep reminders in, and come back to it when all hell breaks loose in this country…  You will then, say, “That Chuck Butler sure was right about this”…

The U.S. Data Cupboard ADP Employment Report was already talked about above, and there was nothing else to see that made a difference… Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare today, the Weekly Initial Jobless Claims. In addition we’ll also see November Factory Orders… But that’s so stale data that it’s beginning to smell!  So, don’t count on that to be a market mover.

To recap… The currency & Metals rally that was taking place yesterday when the Pfennig was sent out, were turned around on some very suspicious ADP data, and then the FOMC Meeting Minutes confirmed that the Fed/ Cabal/ Cartel FINALLY sees the inflation that we’ve all been screaming our heads off about, and stated that the Fed/ Cabal/ Cartel heads were ready to hike rates sooner than earlier stated…  Now, I do realize that markets look forward… And they liked that Central Bank was talking about hiking rates, but….  If they saw that then they certainly had to see why the Central Bank is talking about hiking rates….  The stock jockeys saw it… I’m just saying…

For What It’s Worth…. Ok, this article came to me via the good folks at GATA, and it’s an article about how 2022 should be a good year for Gold and Silver…  And it can be found here: https://www.sprottmoney.com/blog/A-New-Year-For-Comex-Gold-Craig-Hemke-January-04-2022 

Or, here’s your snippet: “

Chuck again, yes it’s a short snippet today, because most of the article has graphs and charts that he refers to… so, to get you to go to the link above and read the whole article, I have left the charts out…  Tricky, I know, but I’m very tired this morning, so you get what you pay for! HA! 

Market Prices 1/6/2022: American Style: A$ .7186,  kiwi .6758,  C$ .7828, euro 1.1307, sterling 1.3537, Swiss $1.0889, European Style: rand 15.7541, krone 8.8819, SEK 9.1357,  forint 318.60,  zloty 4.0357,  koruna 21.7017, RUB 74.95, yen 115.81, sing 1.3602, HKD 7.8019, INR 74.41, China 6.3539, peso 20.55, BRL 5.6797,  BBDXY 1,180.38, Dollar Index 96.18,  Oil $78.88, 10-year 1.73%, Silver $22.36, Platinum $984.00, Pallladim $1,964.00, Copper $4.36, and Gold… $1,800.30

That’s it for today… And this week of course…  What an awful 3^rd period for the Blues last night… It was like night and day, the first two periods VS the 3^rd period… Still no word on the baseball negotiations… I watched a special on MLB TV the night before that was a documentation of the 80’s Cardinals… AKA Whitey Ball… They focused on the 1982 team, and how in Game 6, the game was delayed by a two -hour rain… I said to Kathy, I was at that game with Art Kniffen… Art and I were good friends that worked together at Mark Twain Bank… He went on to run his own bank, and has since retired, I think that’s what I heard. Art and I used to have a contest on who could make the strongest coffee… Hope All’s Well, Art….   My pen pal, Billy Squier takes us to the finish line today with his song: In The Dark….   I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself… And don’t forget: Be Positive, Test Negative!

Chuck Butler

January 5, 2022

* Currencies get sold on Tuesday

* But get bought in the overnight markets… 

Good Day… And a Wonderful Wednesday to you! Well, my first day down here in my winter home, sure was grand… The sun was full in the sky, the temperature was warm, a slight breeze was blowing, and I assumed my place on the deck that overlooks the ocean, and after inserting my air buds, got to reading my next book…  I’m still fighting this nasty cold, and I have in my mind, that the warm sun will help heal me of this dang cold! Please don’t tell me that I’m wrong about that, for I have it in my head that it does me good, and that’s that!  The band, Yes, greets me this morning with their song: Yours Is No Disgrace…

That song should be played over and over again at a 10 Volume in the ear of Fed/ Cabal/ Cartel Chairman, Jerome Powell…  To get him to think that he’s not responsible for the soaring inflation, and then maybe, just maybe because you never know, he would do the right thing, right here, right now, if he thinks that he won’t be made fun of by the other kids for allowing inflation to get out of hand…  See how I went full circle there? I bet for a second there, you thought I had gone soft, plushy Teddy Bearish on you!  No Way!

So… On Monday, we had price engineered takedowns of the metals and currencies…  Then on Monday night going into Tuesday morning, we saw the dollar get sold again… Mass Confusion, eh?  Well, yesterday it was a little strange, we saw Gold & Silver rally, while the dollar fought back and regained the title belt… That always seems to be quite strange to me, that the dollar rallies, at the same time Gold & Silver rally…

There was still some price management of the metals during the day. As Gold was higher at one point in the day… But still Gold gained $13 on the day to close at $1,815.40, and Silver gained 16-cents to close at $23.13…  The price of Oil rose again and now trades with a $77 handle, and there was some disheartening news yesterday in the Oil industry… Apparently, 2021 was a very bad year for Oil discoveries, and recovery…  Well, when you bad mouth Oil people, and tell them they’re responsible for global warming and what have you, what do you expect them to do, other than crawl under a rock and hide?  I’m just saying… 

The country was built on Oil, folks, look at everything that runs on fossil fuels, and how would we have gotten there without them?  And then you decide that you no longer want them?  Give me a break!  What moron decided that would be a good idea?  

The BBDXY started the day at 1,173 and ended the day at 1,179… A HUGE jump higher in the dollar… For what reason? Well, if you read the articles like do every day, except when traveling or on vacation, you would read that currency traders are looking at the increase in the 10-year Treasury’s yield, as the reason for buying dollars…  

So, let look at that for a moment…  The yield on the 10-year Treasury is rising because of a response of rising inflation, and don’t lose sight of the fact that there are less and less buyers of the bonds, and therefore yields need to rise to attract investors.  So, do either of those reasons seem like a reason to buy the dollar?  A rising yield that needs to rise more than 15 BPS to reach neutral with inflation doesn’t seem to cut the mustard with me… But then I’m a prudent investor, and don’t like to own negative yielding investments, do you?

In the overnight market last night… Once again, the dollar ran into some sellers in the overnight markets, the euro rose above 1.13 once again, and all the other currencies looked stronger as we started the day today. The BDDXY has dropped to 1,177 , and there just doesn’t feel like this will be a good day for the dollar, but then there’s always the PPT to prop it up… 

While I was on vacation, we saw a strong Retail Sales number, which I explained as being trumped up by pre-Christmas purchases. But the number just kept eating at my brain, and I kept being so close to explaining what was going on, it was on the tip of my fingertips, but… then I would fail to explain it, and not until I saw @econoguyroise (David Rosenberg), explain it on Twitter that I finally had my V8 moment head slap…  So, let’s turn to David Rosenberg on Twitter, and see what he had to say about the Retail Sales number: “It’s almost comical to see everyone gushing over Mastercard’s data showing +8.5% YoY holiday sales off the depressed levels of a year ago. Back out the math since we already know November’s spending activity and it means a sequential MoM retail sales slide for December!” – David Rosenberg

Thanks @econoguyrosie! Twitter… you know that I’m on Twitter @chuckobutlerjr , and while I try to remember to post my thoughts from time to time, I fail miserably at that job… But an economist as widely followed, like David Rosenberg, Tweets something nearly every day… Besides, most of my tweets have been about baseball!

OK, back to regular programming… Yesterday, I left you hanging, and I apologize for that… midway through the Pfennig yesterday, I told you that the price manipulators’ plans had worked out perfectly, and that I would circle back to explain later in the letter… And then crickets… So, here it is… Basically this is their price manipulation plan A….    You drive down the price of Gold (Silver) to a level that makes it look attractive again, and then they reverse course and buy at those cheaper levels…. Now they watch it move higher because that’s what Gold should be doing, and once it reaches a level that insures them a great profit, they start selling short again, locking in their profits, and thus starting the game all over again…

So, did you hear that the POTUS mentioned the other day that he too had finally realized, that grocery prices were becoming inflationary?   I don’t make this stuff up folks, now other people may make it up, but to me this is comical relief… So, take with as many grains of salt as you wish…

I really don’t believe most of what I hear, or read these days, and trust me, I hear and read a lot! And I certainly don’t believe any economic report that comes out of Washington D.C. And that leads me to this week’s upcoming Jobs Jamboree… Recall that November’s Job tally by the BLS only had 210,000 news jobs created for the month, which was well below expectations. And magically, December’s expectations are for double the November tally… 420,000 newly created jobs are expected, but they don’t tell you what kind of jobs will be created… or how many jobs will be added to the surveys by the BLS for the end total?  And quite frankly, we couldn’t have two disappointing months in a row in the labor markets could we?  That’s not going to happen, not under the BLS’s watch it won’t!

Yesterday’s U.S. Data Cupboard has the Dec. ISM (Manufacturing index) and while it remains above the 50, line in the sand, figure, it did drop a significant amount in December, falling to 58.7% from 61.1%… It’s going the wrong way, folks… I’m just saying…

Today’s Data Cupboard has the ADP Employment Report for December, and we’ll see the color of the FOMC Meeting Minutes from their last meeting. There should be no surprises with the Minutes, and I expect them to fly under the radar this afternoon.

To recap… It was a strange day for the currencies and metals yesterday… The dollar rallied strongly throughout the day, as too did Gold & Silver…   Chuck goes through his thoughts on the rise in the 10-year’s yield, and why it’s not as good a thing as the dollar buyers would have you believe it to be. And in the overnight markets….

For What It’s Worth…. This is a very interesting article in that it goes though the loss of the dollar through ownership, and its place in the world, and how Central Banks around the world continue to add to their physical Gold reserves, and it can be found here: Countries accelerate shift away from US dollar — RT Business News

Or, here’s your snippet: “The holdings of gold in the foreign exchange reserves of the central banks have been growing worldwide, hitting a 31-year high this year. At the same time, US dollar holdings have been dropping.

According to the World Gold Council, the banks have built up their stockpile by more than 4,500 tons over the past decade. As of September, the reserves totaled some 36,000 tons – the largest haul since 1990, and up 15% from a decade earlier.

At the same time, the presence of the dollar in foreign exchange reserves has dropped sharply over the past decade. In 2020, the currency-by-currency ratio of the greenback plunged to the lowest level in a quarter of a century.

Analysts say that the central banks, particularly in emerging economies, are continuing their shift to gold, reflecting global concerns about the dollar-based monetary regime. In the first nine months of 2021, Thailand bought some 90 tons, India 70, and Brazil 60.

Central banks and public institutions started boosting holdings of gold after the global financial crisis of 2008, which caused an outflow of funds from US government bonds, resulting in falls in the value of dollar-denominated assets.

Trust in dollar assets thus “faltered,” market analyst Itsuo Toyoshima says, as quoted by Nikkei Asia.”

Chuck again… There are two points here to be taken… That Central Banks continue to add to their physical Gold reserves, and notice they’re not buying Bitcoin, and two… That even as strong as the dollar has been in the past 10 years, it’s still losing ground in foreign ownership… Doesn’t that spell that these countries don’t trust the dollar?

Market prices 1/5/ 2022: American Style: A$ .7253,  kiwi .6819,  C$ .7859, euro 1.1312, sterling 1.3545, Swiss $1.0819, European Style: rand 15.8266, krone 8.8208, SEK 9.0599,  forint 320.32,  zloty 4.0348,  koruna 21.7286, RUB 74.95, yen 115.79, sing 1.3553, HKD 7.7947, INR 74.33, China 6.3539, peso 20.43, BRL 5.6797,  BBDXY 1,177.60, Dollar Index 96.14,  Oil $77.19, 10-year 1.65%, Silver $23.16, Platinum $987.00, Palladium $1,997.00, Copper $4.40, and Gold… $1,819.00

That’s it for today… Well the outcomes of the CFP games this past weekend were no surprise to me or should have been to anyone else that actually follows the teams and their games. So now we get a rematch of the SEC Championship game, for the National Title. Alabama VS Georgia… Alabama handled Georgia easily in their first matchup, but I’ve always held the thought that it’s tough to beat a team twice in a short period of time (in football that is) Should be a hart hitting, high scoring game… There’s still no progress in the baseball talks… They had better get off their high horses fast, and get to work on this new agreement, before it becomes a real problem for the sport… My St. Louis U. Billikens won their A-10 opener on Sunday VS Richmond… The Billikens lost their leading scorer before the season started to injury, and now they’re learning to play without his scoring prowess… And it’s the final week of the NFL regular season, there are still a couple of playoff spots to be determined. Johnathan Edwards takes us to the finish line today with his song: Shanty… “Cause we’re going to lay around the Shanty, mama, and put a good buzz on”…  I hope you have a Wonderful Wednesday today, and please Be Good To Yourself, and don’t forget Be Positive, test negative!

Chuck Butler

 

January 4, 2021

* All currency & metals gains of the last 10 days are wiped out on Monday

* Chuck & Jim Croce combine for a new hit taking the music industry by storm!  (well, maybe not) 

Goof Day… And a Tom Terrific Tuesday to you! And Welcome to January, and a New Year! Well, I apologize for no Pfennig yesterday, as yesterday was a travel day… Why didn’t I alarm you of this travel day? Well, you see I was scheduled to travel on Sunday… but the airline cancelled the flight for no apparent rhyme or reason, probably because they didn’t have enough people on the flight… But I digress, so the Sunday travel day became Monday travel day, without warning to you, or me for that matter! So, life goes on… My nasty cold lingers on… I give it two weeks, which would take it to Friday of this week… While I sit here coughing up a lung… UGH!  I’ll get by, no worries.. Been there, done that, bought the T-Shirt…  Pink Floyd greets me this morning with their song: Wish You Were Here

Well, the Boys in the Band all returned to their desks yesterday from their extended vacations, where Gold was left to trade on its own merit… And trade higher in price is what it did…  Gold has looked prior to yesterday, as if it had finally chucked the chains around its feet, and was heading for the hills… But talk about removing the punch bowl at the party…  That’s what the Boys in the Band did on their first day back to work… Gold lost $28.40 in one day!  And the reason behind this downward move was illustrated at the COMEX where, for the last 10 days we’ve seen volumes of trades that were more like normal, and without any price manipulators around, Gold found it’s way higher in price each day… 

But then yesterday, the Boys in the Band showed up at the COMEX with their arms full of short Gold/ Silver paper trades, and the volumes exploded higher… Their plan had worked perfectly…    

I’ll circle back to this discussion in a bit, but first, other than the selling of Gold & Silver yesterday, we saw a rally in the dollar…  The dollar has appeared, prior to yesterday, to be on the chopping block…  But that was not evident in yesterday’s trading, as the dollar rallied back strongly throughout the day… The euro, which had reached the high numbers of the 1.13 handle, saw all those gains wiped out, and so it was with all the currencies showing losses of recent gains VS the dollar. 

So, not only did Southwest Airlines tick me off on Monday, so did the price manipulators of metals and the dollar… Why can’t assets be left alone to trade on their own merit?  Now we have to pick up the broken pieces of this puzzle and start all over again… 

And that began in the overnight markets last night, where  we saw more dollar selling, apparently the overnight traders didn’t get the memo from Monday!  The BBDXY has dropped 3+ points overnight to trade this morning at 1,173.40. Gold is up a buck and Silver is down 11-cents in the early trading… 

The returns on the Markit version of the ISM (manufacturing index) for December wasn’t the stuff that economic recoveries are made of… For those of you keeping score at home today, the Markit index number was 57.7, granted still above the line in the sand of 50, but to put in perspective… December 2020 the index was 57.8….  And this time its falling instead of gaining… Uh-Oh… 

So, with this type of data print, remind me again why it was that the dollar rallied yesterday?  Must be my imagination, running away with me… (Temptations) 

Rising inflation is on everyone’s collective minds these days, and if it isn’t, then you live under a rock, or you’re on the 1%, that it won’t matter…  The other day, I heard an oldie but goodie from Jim Croce, and while singing along with the song, I had this thought come to me… Ready? Ok, here’s goes… 

Jim Croce sang these words, oh so many year ago…  “you don’t tug on Superman’s cape, You don’t spit into the wind, You don’t pull the mask off the old Lone Ranger, and you don’t mess around with Jim…   His point, in case you missed it, was there are things in the world that you just don’t question, or even think about doing, without recourse…  So, Chuck made up his own little verse with the late Jim Croce in mind….  “You don’t cut interest rates to zero and then leave them there forever, You don’t bail out zombie corporations, You don’t deficit spend, and you don’t print new currency to the tune of $7.9 Trillion…..  And you don’t mess around with Inflation! 

And of course that recourse would be.. rising and out of control inflation…   Uh-Oh… Too late we, as a country have already traveled down all those paths above, so as my grandma used to say… “you made your bed, now lay in it”… Meaning, of course, that you’ve made a mess of things, now you have to deal with it… and dealing with it is what the U.S. citizenry does best… We put our heads down, go to work, and don’t talk back…  But how much longer will that last? I don’t think today’s youngsters have the decorum to hold civil sit ins, like the ones in the 60’s…  

So, Friday last week, we were supposed to be getting the skinny on who received loans and by how much back in Sept 2019… You may recall me making a big deal out of these repo loans and how we were left to our imaginations as to which Big Banks were in trouble. So much for all that transparency from the Fed/ Cabal/ Cartel we were supposed to be getting, eh?  

But something funny happened on the way to the Forum on Friday, and there was a gag order put on journalists (do they still consider themselves as such?) And as you would imagine, our friends Russ & Pam Martens, of www.wallstreetonparade.com  were  there to report on it, and their findings will be in the FWIW section today… 

The U.S. Data Cupboard slowly gets restocked this week, as we build to Friday’s Crescendo of the Jobs Jamboree…  We already talked about what the Data Cupboard had for us yesterday, and today we get the Gov’t’s version of the ISM (Manufacturing index)… Which never agrees with the Markit version prints… But you don’t have to worry about that, because it’s all a bunch of baloney, if you ask me! 

To recap… Well, all the good days from the last 10 trading days went to hell in a handbasket yesterday, when the boys in the band, and the dollar protectors came back to work and dropped the mic on the rallies… Showing up with HUGE stacks of short paper traders…  The overnight markets, however, didn’t seem to get the message, so we start today in a confused state of mind…  No worries that’s where they want us, folks… 

For What It’s Worth…  Well, I pre-billed this article above, so I won’t go through all that again, and just get to the gist… This article about the missing names of who needed to get bailed out can be found here: There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders (wallstreetonparade.com)

Or, here’s your snippet:”There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders

Four days ago, the Federal Reserve released the names of the banks that had received $4.5 trillion in cumulative loans in the last quarter of 2019 under its emergency repo loan operations for a liquidity crisis that has yet to be credibly explained. Among the largest borrowers were JPMorgan Chase, Goldman Sachs and Citigroup, three of the Wall Street banks that were at the center of the subprime and derivatives crisis in 2008 that brought down the U.S. economy. That’s blockbuster news. But as of 7 a.m. this morning, not one major business media outlet has reported the details of the Fed’s big reveal.

On September 17, 2019, the Fed began making trillions of dollars a month in emergency repo loans to 24 trading houses on Wall Street. The Fed released on a daily basis the dollar amounts it was loaning, but withheld the names of the specific banks and how much they had borrowed. This made it impossible for the public to see which Wall Street firms were experiencing the most severe credit crisis.

It was the first time the Fed had intervened in the repo market since the 2008 financial crash – the worst financial crisis since the Great Depression. The COVID-19 crisis remained months away. The first reported case of COVID-19 in the U.S. was not reported by the CDC until January 20, 2020 and the World Health Organization did not declare a pandemic until March 11, 2020.

The dollar amounts of the Fed’s repo loans grew to staggering levels. On October 24, 2019, we reported the following:

“The New York Fed will now be lavishing up to $120 billion a day in cheap overnight loans to Wall Street securities trading firms, a daily increase of $45 billion from its previously announced $75 billion a day. In addition, it is increasing its 14-day term loans to Wall Street, a program which also came out of the blue in September, to $45 billion. Those term loans since September have been occurring twice a week, meaning another $90 billion a week will be offered, bringing the total weekly offering to an astounding $690 billion. It should be noted that if the same Wall Street firms are getting these loans continuously rolled over, they are effectively permanent loans. (That’s exactly what happened during the 2007-2010 Wall Street collapse: some teetering Wall Street casinos received, individually, $2 trillion in cumulative loans that were rolled over for two and one-half years – without the authorization or even awareness of Congress or the American people. One bank, Citigroup, received over $2.5 trillion in Fed loans, much of them at an interest rate below 1 percent, at a time when it was insolvent and couldn’t have obtained loans in the open market at even high double-digit interest rates.)”

Under the Dodd-Frank financial reform legislation of 2010, the Fed was legally required to release the names of the banks and the amounts they borrowed “on the last day of the eighth calendar quarter following the calendar quarter in which the covered transaction was conducted.” The New York Fed released the information for the third quarter of 2019 last Thursday, a day earlier than required. We reported on it the following day.

Those Fed revelations, that had been withheld from the American people for two years, should have made front page headlines in newspapers and on the digital front pages of every major business news outlet. Instead, there was a universal news blackout of the story at the largest business news outlets, including: Bloomberg News, The Wall Street Journal, the business section of The New York Times, the Financial Times, Dow Jones’ MarketWatch, and Reuters.”

Chuck again… Well, do you still have questions about how the Deep State controls the media? Well, certainly not after this revelation!  It’s not much to ask for the truth, is it? And then inform the American public what that truth is?  Apparently, I’m living a lie, or at least living the past… 

Market prices 1/4/2022: American Style: A$ .7200,  kiwi .6780,  C$ .7841, euro 1.1283, sterling 1.3487, Swiss $1.0887, European Style: rand 15.9935, krone 8.8756, SEK 9.1080,  forint 323.91,  zloty 4.0544,  koruna 22.9790, RUB 74.62, yen 116.12, sing 1.3570, HKD 7.7944, INR 74.55, China 6.3535, peso 20.55, BRL 5.5941,  BBDXY 1,173.47, Dollar Index 96.34,  Oil $76.68, 10-year 1.63%, Silver $22.87, Platinum $964.00, Palladium $1,950.00. Copper $4.37, and Gold… $1,803.70

That’s it for today…  And Big Happy Birthday to a long time friend, Debbie Wyland… Debbie was the programmer that worked with us at Mark Twain Bank, and we spent many long days working on programs for mortgage bonds… Those were the days my friend… Today would have been the 96th birthday of my dad… My dad passed at 70, his dad passed at 70, if you don’t think I’ve got my eye focused on 4 years from now, you don’t know me!  I just watched the sun come up over the ocean, I’m reminded each year when I return here for the winter, how beautiful that scene is each day…  Jr. Walker and the All-Stars take us to the finish line today with their hit song: What Does It Take…  I love it when he says in the song: Let me blow it for ya, and then goes into a sax solo…  Ok… I’d love to stay around for more this morning, but… the show must go one! I hope you have a Tom Terrific Tuesday today, and please, Be Good To Yourself, and remember, Be Positive, test negative! 

Chuck Butler

 

 

 

 

December 30, 2021

* Dollar continues to get sold in small amounts… 

* JPMorgan back in the news for spoofing again… 

Good Day… And a Tub Thumpin’ Thursday to one and all! I bet you were wondering where I slipped off to after Monday’s letter, eh? You might recall me telling you that I had gotten a nasty cold, and well, it took its toll on me on Monday, Tuesday, and Wednesday. I’m not in the clear just yet, but I’m, better… At least I’m awake… I basically slept for about 36 hours only waking up when Kathy would check on me… I still would much rather be asleep this morning, but… I made a promise to myself many years ago about writing the Pfennig when I didn’t feel like it… And this morning is one of those days… Neil Young brings us back to our regular programming this morning with his song: Four Strong Winds…

So… This week has been weird in the markets, wait! Hasn’t just about every week the past few years been weird? Well, yes they have, but none were the week’s trading that ended the year… The U.S.’s fiscal year ends in Sept. But a Ton of Companies have their books squared to close on 12/31…  So with that thought in mind, I looked out at the opportunities in the markets that presented themselves this week… I don’t see many, folks… And that’s what makes this week weird… Usually, end of the year, you have folks thinking about changes or things they want to do in the new year, and those announcements bring about movements in the markets…

The only opportunity in the markets that I see, for gains in 2020, is Gold & Silver… Many experts have gone on record saying that Gold will return to $2,000 in 2020…  The rest of the market is a demolition derby if you ask me…   Bond yields will continue to rise, we’ve been through that so many time in the past , that we don’t need to do that again!  Stocks are so overbought that they have almost come around full circle… And the Fed has stopped, or so they say, stimulating the economy…   Oil is interesting…  the price of Oil has gotten back on the rally tracks after a couple of weeks of weakness, and looks to be in the driver’s seat… Ooooh, ooooh, driver’s seat (Great song) But Oil is so tricky, it can be rising like the Phoenix one day, and the next day, be looking for cover… So with volatile markets like that I tray to stay clear of them.

In the actual markets yesterday, we saw some dollar selling, not much, but some nonetheless… The BBDXY closed at 1,177.04 last night, which is down quite a bit from where it was before I left on vacation (1,185.92)…  The price of Oil is up to almost a $76 handle this morning, trading at $75.98. Bonds keep getting sold, which they should be, and the 10-year’s yield this morning is 1.53%…  And Gold… Hmmm…

Last Saturday I was happy to see that the Commitment of Traders (COT) Report for the second consecutive week showed big changes that were favorable to Gold & Silver, and instead of coming into the office on Monday with that in mind… The price manipulators wanted to make sure that everyone got the message that fundamentals like COT’s are no longer important (in their minds), and pushed Gold down on the day to the tune of $1.40 to close at $1,805.80, and Silver was down too, by 16-cents to $22.94…

In the overnight markets last night, the dollar continued to get sold, not my large margins, but little chinks taken away from the dollar’s armor daily now it seems…   Gold is down a couple of bucks this morning and Silver is down one thin dime, as I write…

In the U.S. Data Cupboard today is only the usual Tub Thumpin’ Thursday far… Weekly Initial Jobless Claims, which haven’t been going in the right direction lately…  Tomorrow, there will be no data to end the year, so this is it…   We close the U.S. Data Cupboard today for 2021, not to be opened up again until Jan. 3^rd…

To recap… The dollar continues to sink, albeit slowly, but over time has sunk quite a bit since 2 weeks ago… Chuck looks for opportunities in the markets for 2022, but only sees one shiny asset class meeting his criteria… And the Data Cupboard gets closed up for 2021 today…

For What It’s Worth…  You know that I truly believe in the magc of the Christmas season , and how it brings out the good in most people, and for this one I’m going to have to make an exception and wish that all involved went to jail!  I’m talking about an article about JP Morgan settling to pay a $60 Million fine for metals price spoofing… And it can be found here: https://shiny-life.com/investors-get-preliminary-approval-for-60-million-settlement-for-alleged-jpmorgan-spoofing/

 

Or, here’s your snippet:” Commodities merchants have obtained preliminary approval for a proposed $ 60 million settlement to resolve class-action claims relating to JPMorgan Chase & Co.’s alleged manipulation of the dear metals futures markets.

 

A Manhattan federal decide mentioned on Monday that the deal, reached final month, eliminated an preliminary hurdle to approval and scheduled a equity listening to for July 2.

 

If in the end authorised, plaintiffs’ legal professional mentioned, the deal would construct on an earlier $920 million settlement with the federal authorities relating to the funding financial institution’s use of an unlawful enterprise observe. referred to as “identification theft”.

 

The approach, which Congress criminalized below the Dodd-Frank Wall Avenue Reform and Shopper Safety Act of 2010, is a type of business manipulation that creates a misunderstanding of provide or demand in a market, within the intention to have an effect on future costs.

 

Within the 2018 lawsuit, the group’s plaintiffs alleged that JPMorgan “often” positioned digital orders to purchase and promote futures contracts with out ever intending to truly execute the trades. The so-called fraudulent orders tricked merchants into paying artificially inflated costs for the metals, in line with the lawsuit.

 

JPMorgan’s allegations of misconduct prompted traders to file separate securities class actions, after a dealer within the funding financial institution’s treasured metals workplace pleaded responsible to fraud and commodity conspiracy in 2018.

Additional prosecutions adopted, and JPMorgan revealed in February 2020 that it was responding to inquiries from the USA Division of Justice’s Felony Division relating to its buying and selling practices within the metals market.”

Chuck again… And once again, I plead with the authorities to send these guys to jail… but my pleas fall on deaf ears.

Market Prices 12/30/2021: American Style: A$ .7265, kiwi .6837, C$ .7825, euro 1.1325, sterling 1.3492, Swiss $1.0922, European  Style: rand 15.9433, krone 8.8162, SEK 9.0487,  forint 326.79,  zloty 4.8589,  koruna 22.1288, RUB 73.84, yen 115.18, sing 1.3529, HKD 7.7989, INR 74.31, China 6.3679, peso 20.56, BRL 5.6536,  BBDXY 1,177.83, Dollar Index 96.05,  Oil $ 75.98, 10-year 1.53%, Silver $22.84, Platinum $970.00, Palladium $2,057.00, Copper $4.35, and Gold… $1,803.50

That’s it for today, this week, and this year! Quite a bit shorter of a Pfennig today for you holiday enjoyment… I’m feeling pretty good at getting down what I did! HA! Things around here this week have been weird for me, in that I slept through most of it… Little Evie is here, and she’s really growing up fast. I’ve had to stay away from her and her brother most of the time they’ve been here this week, and today they go home! UGH! I love the sound of the pitter-patter of little feat running across our hardwood floors upstairs…  So, if you are a New Year’s Eve celebrator, please be careful tomorrow night, make good choices and do NOT drive after drinking!  So, be safe, careful but have a great time! I’m listening to Celtic Woman, Kelly, sing Auld Lange Syne this morning, and getting a tear in my eye… I hope you have a Tub Thumpin’ Thursday, and a ball droppin New Year’s Eve tomorow… And please Be Good To Yourself…  Be Positive, Test Negative!

Chuck Butler

December 27, 2021

* Currencies & metals rally while Chuck was gone

* The Potus’s $2 Trillion deficit spending boondoggle is being held up… 

Good Day… And a Marvelous Monday to you! Did you miss me? I missed writing everyday to you, but I got over that quickly! I trust your Christmas was beautiful, blessed, and full of wonder and joy… Mine sure was!  Little Evie was adorable, and was able to unwrap her presents, and was so excited… It was 70 degrees on Christmas Day! I bet all the kids that got a bicycle were glad it was a nice day! But it wasn’t a record high for the day… Hmmm….  In past years, while I was away, we would see a rally in the currencies and metals, and this year, was no exception, albeit a muted rally, but a rally nonetheless!  I’m still listening to Pandora’s Smooth Jazz Christmas station, and will continue to do so, until the new year… This morning, and the Stephen Kummer Trio is playing their version of: Favorite Things…

Well, let’s see.. on 12/16, when I left you, Gold was $1,188.09 and Silver was $22.17… The BBDXY was 1,185.96, Oil was $71.17, the ten year was 1.46%, and the euro was 1.1315… And here’s how they all closed on Christmas Eve…  Gold was 1,810.20, Silver was $22.96, The BBDXY was 1,178.33, Oil was $73.79, the ten year was 1.43%, and the euro was 1.1340…  So, there were rallies in the asset classes, while I was away… And like I’ve said many times before when coming back… I would gladly stay away from writing for “X” dollars!  But I digress here…

The dollar was not so much in demand last week, as maybe, just maybe, cause you never know, traders and investors are finally seeing the writing on the wall, that spells out troubles for the U.S. going into 2022, and they lessened their respective loads of dollars.. the dollar still appears to be overbought, but at least it’s not flashing red any longer!

The Potus’s $2 Trillion boondoggle was put on hold for now that is, why wait? Why stay the execution? Get it over with, so that we can go on with the ending of our Empire! I’m in a rotten mood this morning, so don’t cross me! What’s $2 Trillion any-old-way? Chump change, right? Bus fare… Oh, do you remember when you would be going somewhere, that required transportation, and your mom would give you Bus fare, if you needed to leave early, or if things didn’t turn our just right?  And that takes me back in time… The late 70’s, early 80’s… I took the bus to work each day, and returned home on the bus… It took about 45 minutes to go downtown, and even longer to get home each day… I wonder if anyone takes the bus to work each day, these days?

In the overnight markets last night… Well, I don’t know if the senior traders overseas were returning last night, but the dollar selling that went on all last week, stopped on dime… But the feeling that the dollar’s days of being the king of the hill were waning, has subsided this morning… The euro has slipped to 1.1310, The BBDXY has risen to 1,180.39, Gold is down in the early trading by $2.30, and Silver is down 15-cents… Oil is holding steady Eddie above the $72 handle, and the 10-year Tresasury’s yield has risen to 1.49%… 

I’m still of the belief that the 10-year’s yield will be 2.00% by spring time…  So, it had better get it in gear, eh? Bonds have really been a real enigma for me… I used to trade bonds, and thought I had my finger on the pulse of the bond market… But these day, I sit on cornerstones and count the time in quarter notes… (Jackson Browne) I do, really, I sit there and ponder what the heck is going on! The Fed/ Cabal/ Cartel says that they are no longer buying as many bonds each month, and that should in my opinion bring about rise in the yields becuase they sellers need to attract buyers of the bonds that the Fed/ Cabal Cartel no longer get their mitts on… 

I had thought that we were well on our way to higher yields about 6-weeks ago, when the yields rose to the 1.70%’s…   But that was not to be! 

The Pfennig is short-n-sweet today, as I’ve got to slowly get back in the saddle without hurting myself … Besides, I’ve been told on occasion that too much Chuck at once is bad for you …  HA!

Well, Chuck’s back, so what did you expect? The rallies to continue? HA! All kidding aside, the currencies and metals are still showing to be oversold, and so we should expect the rallies to continue, but since when did fundamentals or technicals come into play in these heavily manipulated markets? 

I’ve been on the lookout, not seriously, while on vacation, but still on the lookout for someone to give me an inkling of information about what’s coming for the metals in 2022… No one really knows, for sure, but some have some really educated observances and I turn to those folks to help me with my thoughts… One such person to check out is E.B. Tucker… And when I saw him quoted on Kitco.com I immediately went there to see what he had to say, and I have that for you right here: “Everybody is a speculator, and so next year, I expect this speculation runs out of gas. There’s no more stimulus check coming. There’s more liquidity coming into the average person’s pocket. They got a raise this year, but everything they’re buying is going up in price. Sales are slowing down. The refinance boom is slowing down,” Tucker told David Lin, anchor for Kitco News. “Next year, you’re going to see a rotation out of [stocks] and you’re going to see a move into something real.”

Chuck again.. And that “something real” would be Gold & Silver… He didn’t have to say the words, Gold & Silver, by calling it something real… Even I can figure that one out! HA!

Inflation is a real bummer man…  It’s running at an annual rate of 13.9%, according to shadowstats.com, and our country is still sitting on ZIRP… zero interest rate policy… Oh, sure the Fed/ Cabal. Cartel is talking about hiking rates in April of next year, but that’s till 4 months out, what will inflation be by then? I shake my head in disgust at our so-called Central Bank…

There’s very little on the docket for the U.S. Data Cupboard this week… It’s not unusual for this to occur, as the year comes to an end, most senior traders have taken the last two weeks off, and there’s nothing to be covered up or hidden in their trading logs, as they made sure of that before they left… The Gov’t bean counters tried to jam or cram all the data prints into last week, ahead of Christmas so that everyone’s eyes were taken away from the ball…  I had to gag when I saw one of the prints… The Stupid Consumer Confidence report for this current month, shot higher from 109 to 115… Really? What on earth does anyone have confidence in these days, besides the fact that Gov’t will continue to take down our Empire with deficit spending?

I mean, think about that for a minute… the stock market is teetering once again, waiting for the white knight to come save it, and the inflation rate is running at its hottest pace in nearly four decades, as widespread supply disruptions, high consumer demand and worker shortages fuel a surge in prices. The Fed/ Cabal/ Cartel, may be just jawboning, but they claim that they are here to remove the punch bowl at the party… The U.S. current debt is $29.3 Trillion, our Unfunded Liabilities are $85 Trillion… (from the U.S. Debt Clock), and we’re not going to stop our deficit spending any time soon… And from that short list of problems, people are Confident? Give me a Break!

To recap… The currencies & metals rallied while Chuck was away, and as usual he has offered to go away permanently if someone wants to pay him to go away… HAHAHAHA!  The $2 Trillion boondoggle that is being tossed around D.C. like a hot potato, no worries, it’ll get through eventually, because that’s what we do… We deficit spend! 

For What It’s Worth… Well, this article came to me via long time reader Bob, who lives “downunder”, and always has a different thought on things, and I love that!  This is an article about money… and it can be found Here: What is money and how is it changing? (brisbanetimes.com.au)

Or, here’s your snippet: “Money – it’s the grease that makes the world turn. It’s a means of exchange. We work for it to satisfy our needs and wants. It is used by some to measure their success in life. We even sing songs about it, how we’d like more and pine for it when it’s gone.

For decades, money has been largely unchanged. Sure, in Australia we’ve moved from paper to polymer notes, ditched the 1¢ and 2¢ pieces, added $1 and $2 coins. Instead of our pay being delivered to us via an envelope stuffed with cash, it is now electronically deposited into our bank account.

Yet starting with the global financial crisis and now the coronavirus pandemic, both money itself and our methods of spending it are changing at perhaps the fastest rate since societies moved from bartering to coin.

There are some people actively investing in alternative forms of money in the belief that what we know as money – backed by a central bank and the government – could change in the near future. More than $US3 trillion has been sunk into cryptocurrencies with advocates claiming that they will replace “traditional” money to pay bills and store value.

Meanwhile, as China tests out a digital yuan, many central banks, including Australia’s, are at least countenancing the idea of introducing digital currencies of their own backed by the government – an “eAUD”.

In an interesting twist – although sightings of $100 notes are akin to close encounters with extraterrestrials – there have never been more $100 and $50 notes in the economy. More cash, not less? How come? And what are to make of all these changes?”

Chuck again… and for those changes you’ll have to click on the link above and go to the article…  

Market Prices 12/27/2021: American Style: A$ .7216,  kiwi 6.800, C$ .7785, euro 1.1310, sterling 1.3405, Swiss $1.0877, European style: rand 15.5277, krone 8.8794, SEK 9.1276,  forint 327.62,  zloty 4.0735,  koruna 22.2135, RUB 73.54, yen 114.73, sing 1.3571, HKD 7.8012, INR 74.99, China 6.3727, peso 20.63, BRL 5.6945,  BBDXY 1,180.39, Dollar Index 96.21,  Oil $72.61, 10-year 1.49%, Silver $22.81, Platinum $969.00, Palladium $2,038.00, Copper $4.34, and Gold $1,807.90

That’s it for today… Well, it’s almost time to saddle up and head south for the winter… But before we go, we get to take care of grandkids, Braden and little Evie!  They’ve come to stay with us for a few days while their parents go on a real vacation! I’ve come down with another cold… I sat near a young child last Sunday who was sneezing her head off, and then 4 days later, voila!  I sure hope this one doesn’t turn into what I went through last summer!  So, far, just a cold… Kathy tested me for Covid and I was negative…  Speaking of Kathy, yesterday was her birthday!  I’m sure she wouldn’t want me to tell you how old she is now… But I’m sure most of you can guess… I said to myself yesterday, “Boy she sure still looks great, for being “x””…  I wish I could say that about myself, but I can’t, and so we move along…  Our Blues had their Canada trip cancelled last week, and they travel to New Jersey tonight to play the Devils… Wynton and Ellis Marsalis take us to the finish line today with their upbeat version of the song: Pebble Beach… I hope you have a Marvelous Monday today, and please Be Good To Yourself… And remember Be Positive, test negative!

Chuck Butler

December 24, 2021

Christmas tradition has Chuck sending out his Christmas Pfennig on Christmas Eve.. And So, to keep the tradition going, which, as you’ve been informed from Chuck, is a Big deal with him!  So, with no further ado, here’s Christmas 2021, A Pfennig Tale.. 

T’was the night before Christmas

And all across the states

Not a creature was stirring

But inflation was calling  Check Mate!

 

And mama in her kerchief

And I in my cap

Had just settled down

To a long winter’s nap…

 

When out on the lawn there arose such a clatter

I sprang from my bed to see what was the matter

And what to my wondering eye did appear

But a sleigh full of inflation and 8 Fed heads, oh dear!

 

With an informer of the inflation so lively and full of luck…

I knew in a moment it must be St. Chuck!

He whistled and shouted to his team…

To the top of the porch, to the top of the wall

Now dash away, dash away, dash away all!

 

St. Chuck shimmies down the chimney

And comes down with a thud!

And went straight to work

Filling the stockings with Gold

 

In his sack he has many Gold & Silver coins

But the people of this country are fickle

And they don’t want real money

They’d rather have things not worth a pickle!

 

He thinks of leaving the non-believers coal in their stockings

For at least it would heat their homes

Which would be better than their fake money, I’m sure

All those things that won’t be worth a bag of foam…

 

But, it’s Christmas, Chuck…

It’s time to ask for dolls and trucks!

Do kids still ask for those things?

Or, is it all about the bling?

 

So, reluctantly he gives out gifts that will bring gratification

Knowing all the while that they won’t last

Not like Gold, or Silver

Then turned around and with a finger beside his nose

Up the chimney he rose…

 

He left behind many presents for his Grandchildren to enjoy

And he hopes they like every little and big toy!

He climbs in his sleigh, and whistles and calls his team by name!

On. Delaney, Everett, Braden and Evie

You 4 will make the world better some day!

 

But he worries every single day

That the country’s debt clock is being abused

And that it will all come crashing down

Some very fine day…

 

He has left presents for his family

Friends, and dear readers

There’s no one else on his list

So, I heard him exclaim as he flew out of sight

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

Chuck Butler, Christmas 2021

P.S.

As you know… I’m a HUGE fan of Christmas, the true meaning, and everything else that comes along with the season…  And so I give you these heartfelt thoughts, that are different this year than in past years…

Merry Be Your Christmas

Peaceful Be Your Home

Joyful Be Your Family

Blessed Be Each Home…

December 16, 2021

* Currencies get sold on Wednesday… 

* What on earth is Powell smoking? 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, I had some technical difficulties with the letter yesterday, like, the FWIW article didn’t show up on your letter, I’ll try it again today… And there were other obstacles… But I carried on… So, I read T’was The Night Before Christmas to my darling daughter, Dawn’s kindergarten class yesterday… I had a blast doing it, as I do every year. (except when I didn’t get to read to them last year)  The little girls sat right in front and their focus was rapt on me and the book… The little boys… well, not so much! HA!  I forget to tell you about the spots on my head yesterday… Sorry… Turns out they aren’t cancerous yet, and I was given some cream to apply on them…  No burning, no cutting… YAHOO!  Yesterday, I told you how the night before I hadn’t slept but an hour or two… Well, I made up for that yesterday afternoon!  I was out like a light for hours!  Jack Jezzro is playing his guitar to the song: Home For The Holidays to greet me this morning…

OK, before we get going into the markets, economies and dolts this morning, I wanted to share this thought with you… This was in Tom Woods letter yesterday that can be found at www.tomwoods.com  , here’s Tom…. “The “You Can’t Make This Stuff Up” Department is going to need to open a five-story annex at this point, but get this:

Moderna just announced that it’s withdrawing from the upcoming J.P. Morgan Healthcare Conference because of — get this — COVID concerns.

You heard that right. The same people whose vaccine was described as extraordinarily effective are afraid to attend a conference full of vaccinated people in a city that requires proof of vaccination to enter a huge array of indoor venues.” – Tom Woods

I read Tom Woods every day, he’s a libertarian and that’s just fine and dandy with me! 

Ok… Well… The slippage in the dollar buying that we say in the overnight markets the previous night and reported on yesterday morning, faded into the woodwork, and the dollar buying was back!  The BBDXY, which started the day at 1,1867, closed the day at 1,188.09…  The euro remained below 1.13, and there was little movement in the other currencies on the day.  Even after the FOMC left rates unchanged, and in the press conference after the meeting, Chairman Jerome Powell, told the markets exactly what I told you he would say!  He basically told the audience and the markets that the Fed/ Cabal/ Cartel is going to step up their tapering effort, and will most like hike rates 3 times in 2022…   Chuck says… “Good Luck with that, J”

And in an effort to throw the scent of rate hike needs to combat inflation, he went on to say this: “Fed Chairman Jerome Powell on Wednesday cited asset valuations as one of four key areas the central bank looks at when assessing financial stability risk.

“I would say, asset valuations … are somewhat elevated,” Powell said.

He also said households are in strong financial shape, but that businesses have a lot of debt”

OMG! Are you kidding me? Asset Valuations are “somewhat elevated”?  I guess he’s right on that if the word “somewhat” has a different meaning!   And households are in good financial shape? Does he not read the reports on consumer finances that points out that many don’t have any retirement savings, or have any rainy day savings, or that credit card debt is high, as well as margin debt?  Dimwittery…   and What’s he smoking? That’s all I can say about that…

Gold AND Silver were allowed to gain on the day, with Gold adding $6.10 and closing at $1,777.30, and Silver adding 14-cents to climb back over the $22 and close at $22.17…  And they should have been much greater gains if the metals were allowed to trade free of manipulation… And yesterday was a good illustration of that… With the Wholesale Inflation (PPI) rising 9.6% year to year, that would lead to much higher Consumer inflation… Here’s something I read in the Bill Bonner’s letter yesterday, that Dave Stockman calculates that wholesale prices actually rose 13.6%…

Going back to the 70’s… What a great decade for rock music, but that’s not what I’m here to talk about… Back in the 70’s consumer inflation rose to 13.9%, and then Fed Chairman Volcker hiked interest rates to 20%, to bring that soaring inflation back to earth…  So, let’s say, the Fed does hike rates 3 times in 2022… They would still be under 1%… How’s that going to stomp out inflation that’s running at 14%?  (according to shadowstats.com)  

In the overnight markets last night… The Bank of England (BOE) surprised the markets with their first rate hike since the plandemic started… The rate hike was just 15 Basis Points, which left their internal rate at 25 Basis Points…  Now, what are 15 Basis Points going to do to snuff out soaring inflation in the U.K.?  More Dimwittery!  

Don’t forget the European Central Bank (ECB) is meeting while my fat fingers fly across the keyboard!  But first, we had the dollar getting sold overnight. The downward move wasn’t huge in any way, the euro climbed back above 1.13, and the BBDXY fell to 1,185, from the 1, 188 figure that it closed at last night…   

Gold AND Silver are rallying this morning in the early trading, with Gold up $6, and Silver up 6-cents so far today, which should be a good day for the metals as everyone tries to digest the staggering news that PPI was up so strong, and that the BOE has hiked rates in the U.K.  Apparently this inflation thing is real, eh?  Welcome aboard the inflation train, BOE! Don’t you wish you would have acknowledged inflation existing before now? 

In the past 24 hours the price of Oil has risen again and trades this morning with a $71 handle…  Bond traders are lost, and in need of someone to lead them out of the woods… And no, I’m not volunteering! 

OK, so Jerome Powell, thinks household finances are in good shape, eh?  Well, let’s see, it’s Christmas shopping time, and November Retail Sales were only up 0.3%… Down significantly from Rocktober’s 1.8% gain…    Let me explain this phenomenon to you once again folks…  We’re Americans, and as Americans our nature is to spend money, whether we have got it or not, we spend, spend, spend…  Until the creditors say, no mas….  So, I find this Retail Sales report to be quite interesting, in that during a time when spending should be over the wall in left field, it wasn’t, and to me this lack of spending reflects on household finances….  I’m just saying…

I was also sad to learn yesterday that Bill Bonner’s daily letter is going to a paid subscription service, leaving me and Dennis Miller the only ones still writing for free…  Bill said yesterday that he basically invented the newsletter blog business… Ahem… Bill, I love you dearly, but… I was doing a financial blog before that! I’m not saying I invented it, just saying there were Vikings before the Pilgrims….

OK, back to the markets… What does the BOE think that 15 Basis Points are going to do for them?  Dimwittery… I really like my new word, dimwittery, it so applies to just about everything that goes on in the markets these days, don’t you agree?  Oh, of course you do… that’s why you read this letter, because I tell it like it is, and don’t hold back any punches… 

Speaking of punches… when do you think the Fed/ Cabal/ Cartel will pull away the punch bowl?  I’m betting that free undercoat that they’ll be dragging their feet to the altar… 

The U.S. Data Cupboard today has the usual Tub Thumpin’ Thursday fare, of the Initial Weekly Jobless Claims… In addition, we’ll also see the color of the Industrial Production and Capacity Utilization reports for November… Given the majority of the November reports that have already printed have been weak, I would suspect these two to also be weak this morning…  And tomorrow’s cupboard is bare…  Next week’s cupboard will also lack any depth, or interesting data, as we head into the Christmas holiday…

To recap… The slippage we saw in the overnight markets Tuesday night, faded into the woodwork yesterday, and it was back to buying dollars, even in the face of what had to be a very disappointing FOMC meeting press conference, where Chairman Powell, basically told everyong what I said he would tell them… Accelerating Tapering, and moving rate hikes up timewise in 2022…  Chuck says, “good luck with that”!  David Stockman says real finished goods increased 13.9%, not the 9.6% the BLS reported… And then Chuck takes us back to the 70’s…

For What It’s Worth…  I think I started the week with an article from Mathew Piepenburg, of Gold Switzerland, and I’ll finish the week with another of his excellent articles… This one is about the coming illiquid dollar… I know, difficult to believe, but he explains how, and that can be found here: Dollar Illiquidity — The Ironic Yet Ignored Spark for the Next Crisis – Matterhorn – GoldSwitzerland

Or, here’s your snippet:” n October of 2019, I began writing/warning of the ignored yet ominous signals coming out of the repo and Eurodollar markets and what the illiquidity (i.e., lack of availability) of U.S. Dollars portended for our markets in the coming years.

Well, those years have since arrived.

Such dollar illiquidity may seem hard to imagine in a world otherwise awash in printed currencies and expanding money supplies.

But what I warned then is no different than what is happening now: The Fed is gonna need to print a lot more dollars.

In other words, today’s hawks will once again become tomorrow’s doves.

Why?

Because there were and are just not enough liquid dollars today to meet the fantastic array of nuanced and complex dollar demand in both U.S. and global markets.

As Egon von Greyerz and I have said many times, the first overt signs of this danger in the cash-poor (i.e., illiquid) repo market which reared its “repo head” in September of 2019.

This was a neon-flashing signal of long-term trouble ahead. And it had nothing to do with COVID…

Informed investors in the autumn of 2019 had sifted through all the confusing minutia and noise behind the September panic in the otherwise open-fraud scheme that is the U.S. repo market (i.e., private banks levering GSE deposits for guaranteed payouts from Uncle Sam which the U.S. taxpayer funds).

Despite all this noise, and despite being completely ignored (and deliberately downplayed) by an otherwise teenage-savvy mainstream financial media, the entire repo story simply boiled down to this: There weren’t enough available dollars to keep it (and the banks) going.

As a result, the 2019 Fed printed more dollars and immediately dumped a $1.5 trillion rollover facility into the repo pits.”

Chuck again… I know, another long snippet, but you’ve got to click on the link above and read the whole article for a complete understanding of what Matthew is telling us.

Market Prices 12/16/2021: American Style: A$ .7213,  kiwi .6820,  C$ .7824, euro 1.1315, sterling 1.3353, Swiss $1.0833, European Style: rand 15.9517, krone 8.9771, SEK 9.0543,  forint 326.37,  zloty 4.0904,  koruna 22.3497, RUB 73.83, yen 114.15, sing 1.3637, HKD 7.8915, INR 76.09, China 6.3642, peso 20.96, BRL 5.6902, BBDXY 1,185.96, Dollar Index 96.12,  Oil $71.17, 10-year 1.46%, Silver $22.23, Platinum $939.00, Palladium $1,752.00, Copper $4.30, and Gold… $1,784.80

That’s it for today… And… until 12/27…  Oh, the humanity! How will we ever get by each day without words from Chuck! HA!  No worries, I’ll be back in the space again before you know it, and in between with my annual Christmas Pfennig… So, that was good news on Tuesday about those spots on my head… I guess my days of sitting out in the sun to read, have come to an end, unless I start wearing a hat outside!  I love the warm feeling of the S. Florida sun in the wintertime on my bald head… Oh well, I received my warning, and I must change…  I got a kick out of the kindergarten kids yesterday, they guessed that I was Dawn’s brother! HAHAHA! And then Grandpa? HAHAHA… and her Uncle? They never did guess that I was her dad!  I don’t want to speak badly of the kids, but I doubt there are any candidates for rocket scientist school in her class! They were sweet though, and wanted to show me how many missing teeth they have… I even got a few hugs from the kids after I finished reading to them…  Tomorrow is my former colleagues, Jen McClain and Ty Keough’s birthday, at least that’s how I remember!  So happy birthday both of you, hope your day is grand! Yesterday, while I was driving, I heard a Christmas song, sung by someone I never expected to hear singing it… Bob Seeger was singing Little Drummer Boy…   Now, that’s the spirit people look for at this time of year… I have a long story about the Christmas spirit, that I’ll share with you some day… Until then… I hope you have a Tub Thumpin’ Thursday, and a very Merry, and Blessed Christmas next week… And Please… Be Good To Yourself!

Chuck Butler