Author: admin

June 3, 2021

* Currencies & metals rally on Wednesday… 

* But give back those gains in the overnight markets last night… 

Good Day… And a Tub Thumpin’ Thursday to one and all! What an awful game last night for my beloved Cardinals… The starting pitcher gave up 11 runs in the first inning, and only recorded 2 outs before leaving the game… I don’t ever remember seeing a game start like that before… UGH! That was a long 10 game road trip, and as I write, so early in the morning, the Cardinals players are probably just arriving back in St. Louis. Gotta go home, rest, and back to the ballpark this afternoon… I don’t feel badly for them, they get paid millions of dollars to deal with that stuff… I recall, when I used to travel so much to speak, I took quite a few “red eyes” on Sunday night to arrive in time to get to my desk and start a new day… Unshaven, and probably looking like death warmed over, but I was there! After a few of those, I made an executive decision to always take Monday off if I was traveling on Sunday… Our best pitcher is on the IL, and now we don’t have an ace to go into a series with… My Cardinals are in trouble!  They are probably singing along with the song that greets me this morning, it’s the Allman Brothers and their song: Statesboro Blues…  I know that I’ve been there many times too!

Ok, well just to prove to the PPT and the price manipulators that you can’t keep Gold under your thumb… Gold rallied on Wednesday gaining $8.70 to close back above $1,900 at $1,909.20, and silver climbed back above $28, gaining 28-cents to close at $28.26…  And the euro rallied back above the 1.22 level yesterday, towing all the other currencies along for ride…

In the overnight markets last night… it got ugly once again, as traders overseas bought dollars and sold the currencies… The euro dipped below 1.22 overnight, but is hanging on to the 1.22 level by the skin of its teeth this morning. Gold is down $12 in the early morning trading, and Silver is down 30-cents, with both of them falling back below $1,900 and $28 respectively…  

This selling makes no sense to me… The U.S. is talking about an infrastructure deficit spending spree that the Democrats will do with or without Republican support… That means more debasement of the dollar, and traders overseas bought dollars?  I used to talk to these guys and get the skinny on what they were thinking, but no longer, as I have no contacts any longer… I sure would like to know what they are thinking here… Because it makes no sense to me! 

The price of Oil was trading with a $69 handle overnight but has fallen back below that figure this morning… As the price of Oil continues to move higher this year… Do you remember the chaos last year about this time when the price of Oil when negative? That was a one day phenomenon to say the least. But since that time the price of Oil has steadily moved higher and higher, with the next stop at $70…  Oh, and you can thank our President for some of that increase at the gas pump you’ve been paying for recently, since he shut down the keystone pipeline and put 52,000 oil workers out of jobs… That’s not a political statement, it’s just a statement of one of the reasons for the price of Oil to be rising, that’s all, nothing more… 

Look, I know that there are scientists that believe that the fossil fuels are causing all this weird weather…  But do you have any idea how much the world runs on fossil fuels? I don’t just mean for cars and trucks, I mean for plastics, and fuel to run the solar wind mils, and there are thousands of things that are made that depend on  fossil fuels…  I told Dennis Miller the other day that by 2035, I don’t think I’ll be around and I’ll be glad to not have to drive an electric car…  I know, I know, they are pretty cool to have now, but until they get the long term battery issues figured out, I’m not one to have to recharge every 300 miles… I’m just saying

We used to be, at least for a short time, energy independent as a country, with all the shale Oil being pumped out… But the other day I told you that Russia reported a record amount of Oil being shipped to the U.S. so far this year…  Better be careful who you tick off here… Wouldn’t it be nice to live together in the kind of world where we belong?  (Beach Boys)

Ok, let’s talk about something else… OK… I’ve spent a lot of time over the years, tracking the Dollar Index…  And to my knowledge, the highest the index has been was during the previous strong dollar trend when it reached 119.55 on 1/1/02. Our research back at EverBank showed that the next weak dollar trend began in Feb 2002, and at the peak of the dollar weakness the Dollar Index had fallen to 71.31 on 3/1/2008…  Last April, I said, “Let’s watch the Dollar Index’s direction, for I believe it’s about to go downward. At that time the index was 98.52…  So, today’s index number of 89.90 represents a 10% downward move in the dollar since April 2020…  Now, I don’t think most of you have considered that a 10% drop in the dollar represents 10% loss of buying power… So, as items that you buy, no matter what it is, go up in price, you know where that’s coming from… 

Inflation can be shown in dollar weakness folks… and a weak dollar invites inflation to be imported into the country from other countries..  So, with inflation soaring right now, and the dollar losing buying power, you’re receiving a double whammy…  Joker, Joker, Joker! (remember that game on tv?) The move in the dollar, downward, has been very methodical, sloth-like, but here we are, and like I said last year, that we were seeing the beginning of a new weak dollar trend, it’s here among us now, and I just have one question for you…. Got Gold?

Speaking of Gold… Recently there was news that in India, one the world’s largest consumers of Gold, they were setting up an Gold Exchange, that wouldn’t allow paper trades, only spot transactions in an attempt to put their foot in the door on the pricing of Gold… Yesterday, the good folks at GATA sent me this note they reprinted from Bloomberg.com : “India is moving closer toward setting up spot contracts for gold, finalizing rules for trading and providing the world’s second-biggest consumer a firmer grasp over setting the price of bullion.

The gifting of gold at weddings and festivals, and its purchase as a store of value are deeply held traditions in India, and the country has been trying to overhaul its fragmented gems and jewelry industry to make supply more transparent, help enforce purity standards and bolster confidence among consumers.”

Chuck again…  That would make the 2^nd country outside of England and the U.S. to start their own Gold exchange, with the other being the Shanghai Gold Exchange…  these two didn’t start their own Gold Exchanges because they liked the way things were getting done in London and NYC. As these things go on, they don’t seem to be major news items, but a few years down the line when most of the gold trading is done outside of the U.S. people will stop and say, “When did that take place, or How did that occur?”

I think about this a lot these days… Wouldn’t it be cool if as individuals we could start our own Gold Exchange? And bypass the price manipulators and all their short paper trades?  But we’re stuck with what we have, and I don’t like it one iota!  But it is what it is… let’s move on to something else… 

The U.S. Data Cupboard today has the ADP Employment Report for May, and the experts are calling for 680,000 jobs to have been created in May… We’ll also see the Weekly Initial Jobless Claims, along with first QTR Productivity… 

Yesterday’s Cupboard has the Fed’s Beige Book, and in it the regional Fed offices reported that the economy is growing but not at the break neck speed that was forecast, and that the recovery is very uneven…  they didn’t mention about the latest setback for the shipping industry…

Yesterday, Dave Gonigam reported in his letter The 5-Minute Forecast, that a shipping port in China had to shut down because of an outbreak of Covid…  this will cause major pipeline disruptions in shipping folks… more problems down the road for sure!

To recap…  The Currencies and metals fought back on Wednesday and regained the ground they lost on Tuesday, thus kicking sand in the face of the PPT and price manipulators… The price of Oil is trading higher again and on its way to $70… How much did you pay for gas recently at the pump? I believe that gas prices are back to pre-Covid levels… Chuck talks about how we can see the weakness in the dollar from a year ago in the Dollar Index…  And India is opening a Gold Exchange that will only deal in spot transactions, no paper trades… Good for them!

Ok… on a sidebar this morning, I thought this news was interesting… It was announced yesterday that Anheuser Busch is going to buy a round of beer for all once the U.S. reached 70% vaccinated…  Ok, now I’ve got a reason to tell people to get vaccinated! HAHAHAHAHA!  I’ve always said that there’s nothing like “free beer”!

For What It’s Worth… Ok… well, there is a shortage of FWIW worthy articles out there this morning folks… I searched and searched and finally gave in to this article on Reuters that talks about the flood of cash that’s out there that causing rates to fall even lower, and it can be found here: Analysis: A ‘tsunami’ of cash is driving rates ever lower. What will the Fed do? | Reuters

Or, here’s your snippet: “Banks have too much cash on their hands – and they’re running out of places to put it.

Nowhere is this more evident than in the rising popularity of a Federal Reserve program that lets firms stash their cash overnight with the U.S. central bank in exchange for at best a small return. The payout these days: Zero percent.

But usage is soaring to record highs as money market funds and other eligible firms cope with what some analysts are calling a “tsunami” of cash.

The banking system is swimming in nearly $4 trillion of reserves, thanks in part to the Fed’s asset purchases, a fall off in Treasury bill issuance and a rapid drawdown in the government’s store of funds at the Fed. The Treasury General Account, or TGA, has dropped by nearly $1 trillion since last fall, mirrored by the surge in bank reserves.

All that cash is pushing down short-term rates and increasing expectations the Fed will need to respond with a technical adjustment at its June 15-16 meeting, if not earlier, in order to keep its key policy rate from sliding further.

The situation is also a headache for money market funds, which are absorbing much of the money and finding fewer options for investing it, a dynamic the Fed is watching closely.”

Chuck again…that last part of the snippet really interests me, as these money market funds take in cash, they have nowhere to go to invest it and get a return on their investment… Sort of like what individuals have faced these past 10 years!  So, don’t cry for the money market funds… 

Market prices 6/3/2021: American Style: A$ .7730,  kiwi .7220,  C$ .8292, euro 1.2205, sterling 1.4197, Swiss $1,1119, European Style: rand 13.5389, krone 8.2950, SEK 8.2732,  forint 283.36,  zloty 3.6512,  koruna 20.8468, RUB 73.35, yen 109.71, sing 1.3231, HKD 7.7575, INR 72.75, China 6.3820, peso 19.91, BRL 5.1222, BBDXY 1,117.38, Dollar Index 89.90,  Oil $68.87, 10-year 1.60%, Silver $27.96, Platinum $1,193.00, Palladium $2,893.00, Copper $4.58, and Gold… $1,896.20

That’s it for today and this week… Like I said yesterday, I sure do like those Holiday shortened weeks! I still can’t get over how badly the Cardinals starting pitcher pitched last night! UGH!  I foresee the Cardinals having to make a trade for a starter, out of necessity… I hope they don’t give away the store! Last week I went to have a new prosthetic made for my eye, but she couldn’t make one for me until the infection in my eye was healed… Well, I do believe that after a week of dealing with the medicine for the eye, that the infection is gone… So, it’ll be back to the oculist next week… The rectus hematoma on my abdomen is getting better. The pain is gone, and the swelling seems to be abating, which is good with me! I’ve seemed to have lost my appetite… My oncologist always asks me about my appetite and I’ve always said no problem… I wish the loss of appetite came with weight loss! I could stand to lose quite a few more pounds, that don’t seem to want to come off!  Ok… no weddings, no holidays, nothing for this weekend… I think I’ll take ride in my car and go west, and see where it takes me… I’ll report on that on Monday… For now, The Moody Blues take us to the finish line today with their song: Story In Your Eyes… “And the sounds we make together. Is the music to the story in your eyes.” I hope you have a Tub Thumpin’ Thursday, and Please Be Good To Yourself!

Chuck Butler

 

June 2, 2021

* The PPT spends The ESF’s funds to defend the dollar… 

* Inflation is not transitory… 

Good Day… And a Wonderful Wednesday to you!  I like holiday shortened weeks! And I’m not even employed any longer! Day one of being by myself wasn’t unlike most days… I read, I researched, I napped, and tried to stay awake to watch my beloved Cardinals play the daunting Dodgers…  I only made it for 3 innings the night before! Darn Pacific Time games! Well, little Evie came home from the hospital yesterday, I was relieved, to say the least! My girl, was sick, and I didn’t like that one iota! Ahhh, the joys of daycare… sharing germs…  The weather here is weird… Just plain weird… chilly days, no sun, strange brew, mother nature, girl what’s inside of you? (Cream, with an addition by Chuck!) Paul McCartney and Wings greets me this morning with their song: Let ‘Em In… 

Well, around noon yesterday, I checked the price of Gold to see if I was right, yesterday morning, when I said that Gold should turn around that early morning, $3 loss… And my gosh by golly, Gold had indeed turned that early $3 loss into a $5 gain! Yahoo! Said I! But then later in the day I checked it again, and that gain had turned into a loss… Gold held the $1,900 figure, but barely, while Silver couldn’t hold its $28 figure…  What the heck happened?

At one point of the day, the euro was rallying, up to 1.2250, and Gold was rallying, and then quicker than a NY Minute, that all ended, and the dollar was rallying…  The PPT again?  I mean there was nothing else to move the markets the way they turned, yesterday, but some intervention… So, go ahead PPT use all the Exchange Stabilization Funds (ESF) you want, sooner or later you’ll run out of funding… Especially if the Fed demands their funds returned to them! 

You may recall me talking about this from several months ago, how there was Trillions of dollar allocated to the Fed for them to use in case of an emergency, and former Treasury Sec. Mnuchin, recalled the funds, becoming persona non gratis with the Fed Heads…  I have a dear reader that reminds me every time I refer to the Federal Reserve, as the Fed, that they are not Federal in any way, and that they don’t have reserves either!  I guess he thinks I don’t know that… when it was me that a very long time ago recommended everyone to read the book: The Creature From Jekyll Island, by Edward Griffin… 

Ok, so the dollar rallied yesterday, for whatever reason the PPT wants to make up that will appease the markets journalists….   Gold ended the day at $1,900.50, down $7.50 on the day… And Silver closed down 17-cents to end the day at $27.98… The BBDXY rallied to end the day at 1,117.08 up from 1,116.82 to start the day… The old time Dollar Index started the day at 89.87 and ended it at 89.83…

In the overnight markets last night… the dollar buying has intensified, and for some strange reason, traders are buying dollars like they are worthy… But like Wayne and Garth, they are NOT worthy! HA ! The BBDXY has risen to 1,120 overnight, and the Dollar Index has risen to 90.23… The euro slipped back below 1.22, and Gold finally gave up the ghost, and fell back below $1,900 overnight. Silver has lost another 11-cents this morning, so our Wonderful Wednesday is turning into a Worrisome Wednesday… UGH! 

Well, I wanted to talk about this yesterday, but in my hurry to get the letter out and get my wife to the airport on time, I forgot about it… And this is important stuff!  Well, I’ll let you be the judge of that! But the U.S. Mint announced last week that they were not minting any Silver coins, for now, and they admitted that there was a shortage of Silver…   Now, why that news didn’t send the price of Silver soaring I have no idea, but, I do know that I’ve been writing about a coming shortage in Silver for years, due to Silver being included in Solar Panels… And now…. Well, now we all know why there hasn’t been any new minting of Silver coins at the U.S. Mint lately…  There’s a Shortage in Silver!

Well…  longtime readers know that I’ve been beating the drum about deficit spending and deficits for, well, let’s see… I began writing the Pfennig in 1992, but it wasn’t until probably 2000 that I began harping about the debt… So for 21 years!  And, just so you know, I’m not stopping here!  Here are some things I came across yesterday in my reading and research…  These aren’t pretty numbers, so put away the sharp objects…

Prior to the distribution of COVID-19 stimulus money, there were ~$13 trillion in US savings accounts that earn less than 1% interest.  According to Shadowstats.com, the real rate of inflation is ~12% versus official government numbers of ~4%.  That means the $13 trillion of banked money is losing ~$2.6 trillion of its purchasing-power each year.

And if you add in all the people that have had their unemployment benefits run out, and therefore are no longer counted as “Unemployed” (I know, makes about as much sense as a screen door on a submarine, but that’s the Gov’t for you!) The figure would be actually around 40 Million people, which would mean a real Unemployment Rate of 25%!!!!!!  (according to Shadowstats.com)

Now, you can do the math just like I can, so you tell me how the Gov’t is going to get tax receipts out of those 40 Million people?  And that brings us to the Biden Budget that calls for $6.1 Trillion Budget… I don’t see how that works, do you? Which means more issuance of Treasuries, and the hope that the kindness of strangers continues…  You know you can only fill a bottle with water until it overflows, and you can’t add any more… The same thing will happen with foreigners buying our debt/ Treasuries, there will come a time when they say, “no mas”…  And I do fear that that that time is drawing near…

In full credit, I got some of these numbers from an article here: You Won’t Believe How Bankrupt the US Is Till You See This – LewRockwell

Now Isn’t Life Strange, a turn of the page…  (Moody Blues)  You know the whole premise of the MMT (Magic Money Tree) folks is that you can print as much currency as you need and then some, as long as we don’t get big inflation…  They think the folks at the Fed have the arrows in their quiver to shoot at inflation to make it go away quickly…  I think they are full of baloney! To say so nicely I might add! The Fed has no more arrows, they’ve all been either shot in the air or taken away from them by the architects of Deficit Spending…  You see there will never be another Paul Volcker to run interest rates up to 17% to combat 10+% inflation… The U.S. had little debt back in the late 70’s and so running up their debt servicing costs with higher interest rates, was no big deal…

But when you flash forward to today’s debt levels, and the amount of IOU’s that are represented by U.S. Treasuries that have been issued, and will need to be issued to finance all the deficit spending the President is talking about, if you raise interest rates to 5%, you would cause major chaos in financing of things like Medicare, and Social Security… In other words… bye, bye Miss American Pie… (Don McClean)

I wonder where the old folks are tonight… ( Gordon Lightfoot) Oh, that’s right, I’m an old folk now, at least that’s what my wife tells me all the time!  But all us Baby Boomers need to fight the good fight VS these Magic Money Tree folks… They’re looney Tunes in my opinion…  But we are at the end of the U.S. Empire’s rule, so when you get near the end, you try anything to survive right?  Remember what I told you Doug Casey said about this yesterday… “Eventually, of course, such irresponsible economics will cause any country, no matter how powerful, to collapse economically, no matter how many Keynesian economists such as Thomas Piketty, Paul Krugman, and Larry Summers declare otherwise.”

Ahh.. the End of the Empire that is the U.S. let’s see what we have in common with other empires that have collapsed… For one let’s take Rome…  they debased their currency, they extended their armies too thin, and spent beyond their means…   Sound familiar?

Or how about Egypt, or Mesopotamia… it doesn’t matter what Empire you bring up, they all have similar reasons for collapsing and one of those similar reasons is currency debasing, and deficit spending on wars… 

I know, you don’t need me to teach your about the history of Empires… So, I’ll move along to other things that are on my mind this morning…  Oh, that’s right I wanted to talk about this… Eurozone inflation rose to 2 percent in May, the first time the rate has surpassed the European Central Bank’s (ECB) target in more than two years… So, inflation is running around the world now, eh?  And what’s the ECB going to do about this rising inflation? Will they be nilly willy about like our Fed and allow inflation to run hot? Or, will they find their inner Hans Tietmeyer, and fear inflation, because of the runaway inflation that ruled Germany in the 40’s?  

For those that don’t know who Hans Tietmeyer was… he ruled the Bundesbank, Germany’s Central Bank back in the 90’s and made it his mission to keep inflation under his thumb… 

Wim Duisenberg, was the ECB’s first President, and he too was an inflation fighter… and probably the best President the ECB has ever had!

Ok, enough!

The U.S. Data Cupboard today has the Fed’s Beige Book today. This is a report from each of the Fed’s regions on how the economy is doing in their respective region… This used to be a big deal for the markets, but now it’s more passé then relevant…  We’ll also see the vehicle sales from last month, which should be a bummer given all the cars that are waiting for chips from China and Taiwan… 

To recap… The currencies and metals were rallying in the morning yesterday, but their rally was stopped in their tracks, and Chuck can only figure that the PPT was in spending their ESF dollars on defending the dollar… Gold ended the day in the red, along with Silver, and the dollar pushed back against the euro and other currencies… In the overnight markets….   There was more dollar buying, and it has intensified… The euro has slipped back below 1.22, and Gold & Silver are slipping lower too… And Chuck talks about real unemployment numbers, taxes, deficit spending, and other things that you might want to go back and reread, to let the numbers sink in… Oh, and he also talks about collapsed Empires!

For What It’s Worth… OK… with Gold slipping this morning, this is a good time to print this article that talks about how Gold’s price slippage is “Transitory” , and not inflation is not!  And it can be found here: https://www.sprottmoney.com/blog/Gold-Price-Dips-Are-Transitory-Craig-Hemke-June-1-2021 

Or, here’s your snippet: “Much has been made about The Fed’s extensive use of the word “transitory” when describing the current inflationary environment. If you understood why they keep using that word, you’ll soon appreciate why all price dips in COMEX gold are transitory, too.

“You keep using that word. I’m not sure it means what you think it means.”— Inigo Montoya

Let’s begin this week with The Fed’s overuse of this word. What are Powell and his goons attempting to accomplish by relentlessly repeating this term with every public appearance?

First of all, understand that this current inflationary cycle is most definitely NOT transitory. It is being pushed along by BOTH of the two classical inflation drivers:

Cost-Push Inflation: This is where input costs force manufacturers to pass along higher prices to consumers. As examples of higher input costs, consider the recent surge in the prices of lumber, iron ore, steel, copper, soybeans and corn.

Demand-Pull Inflation: This inflation is caused by “too many dollars chasing too few goods”. Government stimulus checks combined with surging wages is prompting this problem, as well.

Typically, in response to higher inflation, bond investors demand higher yields. Consider it this way: Who in their right mind would accept a 2% yield in a 10-year U.S. Treasury note when price inflation is at 4%? That investor would be guaranteeing himself a 2% loss of purchasing power over the life of the note if inflation remains unchanged. Therefore, a rational investor would demand a higher nominal interest rate and would forestall buying a treasury note until the interest rate increases.

But the U.S. government cannot afford higher interest rates and The Fed cannot allow higher rates for a multitude of reasons, chief among them the need for negative real interest rates to inflate away the current extreme levels of debt.

Therefore, in an attempt to “jawbone” interest rates lower and reassure bond investors that it’s OK to buy U.S. treasuries with a yield of under 2%, The Fed is desperately pumping the word “transitory”. Again, why? Because if you believe that, by the end of the year, inflation will be back under 2%, then maybe that 10-year T-note you’re thinking about buying doesn’t sound too bad.

But again, this current inflation is NOT transitory. Instead, it’s a direct consequence of all the fiscal and monetary policies the U.S. has pursued since the onset of The Covid Crisis in March of last year. It was a predictable outcome and here we are.”

Chuck again…  Yes, like I keep saying this is not your dad’s inflation, this is different, and a direct result of all the fake money printing and debt levels…  But I’ve been saying this for months so nothing new here to you dear reader… 

Market Prices 6/2/2021: American Style: A$ .7717,  kiwi .7213,  C$ .8274, euro 1.2170, sterling 1.4124, Swiss $1.1089, European Style: rand 13.7490, krone 8.3418, SEK 8.2936,  forint 284.36,  zloty 3.6706,  koruna 20.9203, RUB 73.42, yen 109.85, sing 13241, HKD 7.7593, INR 73.08, China 6.3767, peso 19.99, BRL 5.1871,  BBDXY 1,120.51, Dollar Index 90.23,  Oil $68.38, 10-year 1.60%, Silver $27.87, Platinum $1,188.00, Palladium $2,889.00, Copper $4.57, and Gold… $1,897.70

That’s it for today… Quite wordy today… sorry about that… but I had lots to say! My beloved Cardinals pulled out win in Los Angeles last night… I checked the score when I woke up at 2 am and seeing that the Cardinals won, I was able to go back to sleep easily… One more late night game tonight. UGH! Lots of strange noises in this house that I noticed yesterday because there was no other noise…  Another rainy day today, did I move to Seattle while I was asleep? HA! I have a bumper sticker displayed at my writing desk, and it’s a picture of the Great Mogambo Guru, with his saying, What would Mogambo Guru Buy? (Gold, Silver, and Oil, moron!) And every time I look at it, I smile because I really adore the Mogambo Guru! Our favorite musical terrorist, (that’s what we used to call him on the trade desk) Cat Stevens takes us to the finish line today with his song: Wild World…  I hope you have a Wonderful Wednesday, and Please Be Good To Yourself!

Chuck Butler

 

 

 

June 1, 2021 

* dollar gets sold to end the week last week

* Yesterday’s U.S.  holiday, left markets without any direction… 

Good day… And a Tom Terrific Tuesday to you! And welcome to June! Pfennig Tradition calls for this: June is busting out all over, all over the meadow and the hill… I sure hope you had a relaxing and fun holiday weekend, and you took a minute yesterday to think about those soldiers that have given the greatest sacrifice to our country.  I had to get “dressed up” twice over the weekend for the wedding celebrations of Kathy’s niece. I don’t know how I used to “suit up” every work day, back in the day… I’m a shorts and polo shirt, and tennis shoes kind of guy these days! I’m still feeling the effects of the blood loss last week, but I am feeling more normal as each day goes by… Blood, Sweat & Tears greet me this morning with their song: Spinning Wheel…  Most people don’t catch this, but in this song the music time goes to 5/4, which is common for jazz, but not rock and roll!

So, it’s been a few days since we last talked… In that time we saw more rotten economic data, and the dollar get sold, albeit, not like funnel cakes at a State Fair, but more like “gee we’re going to sell dollars, but not let’s not get anyone upset”…  We also saw Gold move back above $1,900, a level that seemed to be a line drawn in the sand for the shiny metal, and Silver move back above $28…  So, wrap all that up, tie it with a pretty bow, and you’ve got what’s happened in the markets I care about and write about since we last talked.

For the record… Gold closed Friday at $1,908.10, and Silver closed at $28.15… The BBDXY was down on Friday and closed the week at 1,116.55, and the Dollar Index was 89.85… Both of these showing that the dollar was weaker, but not by a wide margin…

In the overnight markets last night…  There was nothing going on trading wise as the dollar is sitting about where it was at the close on Friday, as we start the day… Gold is down $2.30 in the early trading and Silver is up 14-cents, so a hodgepodge of prices to start the trading day…  I don’t believe the small loss in Gold is anything to be concerned with, as it will probably get turned around today, as I see things…  The price of Oil is pushing higher once again and this morning it trades with a $68 handle…  but don’t worry about it, for there’s no inflation, it’s only a transitory number….  As if! 

So, we start the week with the dollar weaker, once again, that is until the PPT spends some of their treasure chest of Exchange Stabilization Funds (ESF) Gold & Silver biding their time, drinking their wine, trying to decide what to do. (James Gang). And the markets looking as confused and convoluted as ever before…  This week, we’ll see lots of data, but not much of it is “real economic data”, that is until Friday, when the May Jobs Jamboree prints… You may recall that last month the so-called experts said 1 Million jobs would be created in April… But they were sadly mistaken when the crooks, I mean the folks at the BIS reported just 264,000 jobs created in April, and as I pointed out last month, even that number was goosed higher by the BIS after the surveys were received, and showed that real job growth for April was negative!

For this month’s forecast, the so-called experts are calling for 674.000 jobs created in May…   Remember when I kept reporting the business failures during the pandemic and kept repeating my thought that many of those businesses wouldn’t be coming back? Well, good friend, Dennis Miller of www.milleronthemoney.com sent me this note yesterday… Check it out…

“While while 16 million people are still claiming state or federal unemployment compensation….

My observation…….. When the pandemic hit many small businesses were closing their doors.  We lamented, “those jobs are not coming back!”  It looks to me like the government has sent out so much money they may have proved us wrong…..instead the workers may not be coming back.”

Yes, businesses are finding out that they’re going to have to up the ante with wages and benefits to lure these people that don’t feel they need to work as long as the government keeps sending them checks, back to work, and that’s going to push wages higher and isn’t that one of the items that the naysayers to rising inflation right now, point to? That there’s no  “wage inflation”?  Well, it appears that argument is being thrown our with the bathwater!

OK, onto other things…  Reuters reported yesterday that China has directed financial institutions to hold more foreign exchange in reserve, a move that analysts say could help temper a rally in the yuan after the currency hit a three-year high against the dollar on Monday.

The People’s Bank of China said it will raise the FX reserve requirement ratio for financial institutions to 7% from 5%, from June 15. The increase will make it more expensive for banks to hold dollars.

Man these communists sure seem to know how to take the fun out of the markets, eh?  HA

Speaking of Communists, well, they used to be and in some ways still are, although they have become quite capitalistic in recent years, Russia, reported some good economic news in the face of the economic sanctions still hanging over them like the Sword of Damocles….  Here are three pieces of news reported by the RT.com “: Russia’s industrial production surges over 7% in April.

Russian unemployment falls to 5.2%, almost back to pre-coronacrisis levels.

Exports of Russian crude to US soared to 12-year high despite ongoing political tensions.—

You know, and all you longtime readers will recall me saying this over and over again in the past, that Russia is an “Oil play”…  And while the price of Oil has recovered a lot in the past year, the Russian ruble has not… So, what gives?  Well… in my humble opinion, it’s investors that think it’s unpatriotic to buy and own rubles…  It took quite some time before investors got over the fear of being unpatriotic when it comes to the Chinese renminbi / yuan, and while I’d like to think I’m a patient man, I know in reality that I’m not… And so my patience grows thin with these investors that fear that owning rubles are unpatriotic…   

I was looking at Google the other day, and came across an article that said, that “two additional stimulus checks may be coming my way”…  I thought, OMG! That’s impossible! No wait, we’ve already seen that 3 stimmy checks were possible, so instead of saying that’s impossible, I’ll say that’s ridiculous! And you know how you’re not supposed to read everything on the internet as the truth? Well, I’m going to put that one down as false info! And hope it goes away!

I was reading Doug Casey’s latest letter on Sunday, and got to a part that I had to share with you…  Doug was talking about the every increasing money supply, and referred to the Magic Money Tree people here: “Eventually, of course, such irresponsible economics will cause any country, no matter how powerful, to collapse economically, no matter how many Keynesian economists such as Thomas Piketty, Paul Krugman, and Larry Summers declare otherwise.”

You tell ‘em Doug!

Ok… so the U.S. Data Cupboard this week will conclude with the Jobs Jamboree on Friday, leading up to Friday, we’ll see all kinds of data like the ISM manufacturing index, Vehicle sales, Productivity, and the Beige Book (Fed regional reports). We’ll also see the Weekly Initial Jobless Claims, and the ADP Employment Report…  So, a busy data week, just not full-o-market moving data….

To recap…  Since we last talked, the currencies and metals have moved positively VS the dollar, albeit at a slowed pace… In the overnight markets last night,   not much went on, except the price of Oil is pushing higher again..  Also, Chuck talks about Russia, China, people not coming back to work, and the potential for wage inflation…

For What It’s Worth….  Man-o-man, did this article really stick out like a man with a hatchet in his forehead when I came across it this past weekend…  It’s an article about the Fed increasing their powers and how people are starting to notice, and it can be found here: The Fed keeps expanding its powers, and that’s making some nervous (cnbc.com)

Or, here’s your snippet: “The Federal Reserve seems to be having an identity crisis.

Not that long ago, the U.S. central bank was seen solely as a watchdog of the nation’s financial system as well as the entity charged with using its various policy levers to control inflation and keep unemployment low.

Nowadays, well, things have changed.

In recent months, the Fed has extended its responsibilities as a bank regulator to the fight against climate change. Where once the Fed used its power over interest rates to control inflation and keep borrowing costs low, it now is taking on the role of making sure job gains are spread equally among income, racial and gender groups.

If this doesn’t sound like your parents’ Fed, or even legendary former Chairman Paul Volcker’s, you’re not alone.

Wall Street increasingly has noticed the central bank’s expansion of its mandate, and some are none too happy about it.

“They shouldn’t be getting involved in these things even if progressive politicians want to drag them in. They have to have the courage to say ‘no,’” said Christopher Whalen, a Fed veteran and former investment banker and now head of Whalen Global Advisory. “Since 2008, they have capitulated on so many fronts I don’t even recognize the institution anymore. The bank I worked for is gone.”

Of course, 2008 was a pivotal year for the Fed.

That was the year Wall Street stalwart Lehman Brothers collapsed, part of a series of cataclysmic events that sent the U.S. and global economy into its worst tailspin since the Great Depression.

To put the economy back on its feet, then-Fed Chairman Ben Bernanke, then-Treasury Secretary Hank Paulson and then-New York Fed President Timothy Geithner headed the “Committee to Save the World.” The group put together an array of programs that ultimately did save the economy but also embarked the nation on an era of unprecedented influence for the Fed.

Over the years, the symbiosis between the Fed and Treasury has only strengthened.

Now, the dynamic has gotten even more intense. Powell and Yellen, who worked together on the Fed for nearly six years, now run the Fed and Treasury respectively.

The Fed has long been considered immune to outside pressures, free to move interest rates and otherwise implement policy in the way it deems most appropriate, outside of political concerns. The fear is that the Powell-Yellen dynamic could change that.”

 

Chuck Again…  Yeah, maybe they are extending their mandate, but who’s going to stop them? Congress? Yeah, right, and I’ve got a bridge to sell you too!  This is getting really bad folks… I want my old fed back, you know, the one that monitored interest rates, and inflation…  Times change, but not always for the better, and the Fed is a classic example of not for the better!

Market Prices 6/1/2021: American Style: A$ .7732,  Kiwi .7258,  C$ .8298, euro 1.2223, sterling 1.4180, Swiss $1,1118, European Style: rand 13.7706, krone 8.2705, SEK 8.2607,  forint 283.96,  zloty 3.6545,   koruna 20.8360, RUB 73.34, yen 109.60, sing 1.3228, HKD 7.7590, INR 72.84, China 6.3672, peso 19.91, BRL 5.2278,  BBDXY 1,116.82, Dollar Index 89.87, Oil $68.04, 10-year 1.62%, Silver $28.29, Platinum $1,182.00, Palladium $2,890, Copper $4.60, and Gold… $1,904.80

That’s it for today… Well, I took Kathy and her relatives to the airport this morning already… I’ll be alone for the next 16 days… I know, I know, it’s not a big deal, but, it will be interesting to see how many times my kids check on me while she’s gone…  Man, did we ever experience a cold spell last week! It was the end of May, and the temps weren’t anywhere close to normal for that time of year! I had to switch to long pants and long sleeve shirts, with my hoodie! Maybe June will bring more normal temps our way….  My grandkids, all four of them, had a part in the wedding this past weekend, and little Evie stole everyone’s hearts as she walked down the aisle with her rose petal basket… Then she had to go to the hospital with the croup cough that night… It’s her second hospital visit in here first 19 months… Poor thing… Delaney was a junior bridesmaid, and was the cutest of all the bridesmaids! And Braden and Everett were “ring security”… And brother did they have a blast at the reception! Ok, time to get going… The Electric Light Orchestra (ELO) take us to the finish line today with their song: Telephone Line…  I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler

 

 

May 27, 2021

* Dollar gets bought on Wednesday… 

* Chuck takes us back to the 70’s… 

Good Day… And a Tub Thumpin’ Thursday to you… I won’t be joining anyone doing any Tub Thumpin’ today, as I’m still weak, but… getting stronger each day, which means my blood loss is being restored, or at least that’s what I’m hoping it’s doing!  My beloved Cardinals got out of Dodge (Chicago) with just one win in three games, and head to Arizona for 4 games now… Maybe they can get well (hitting and fielding) in Arizona… They played rotten defense for 2 games in Chi-Town, but finally had a good game yesterday… It was a beautiful, Chamber of Commerce, day here yesterday, and I sat outside watching the game… Ahhhh, day baseball!  Our Blues are all playing golf now, as they were eliminated in 4 games.. Swept if you will… UGH! So, now I can concentrate on baseball!  I have the perfect storm going for me that makes me sleep during the day… Chemo effects, and blood loss… I might sleep 3-4 hours during the day, and still not have a problem getting to sleep at night!  My dad would have called me “lazy bones”…  So, I had better get stronger fast I wouldn’t want anyone to think that way about me! Loggins & Messina greet me this morning with their 21 Minute song: Vahevala…  Some real good tropical sounds in this song…  Makes me think of sitting on the beach under a palm tree or umbrella, with a tropical beverage in my hand…

Well, it was bound to happen sooner or later. I would rather get it over with, and move on to higher grounds… What am I talking about this morning?  Another engineered takedown of Gold & Silver yesterday, by the price manipulators…  Gold was adding up the days of positive moves, when here come the price manipulators showing up at the COMEX with arms full of short Gold paper trades… (And Silver paper trades too!)  Gold buyers yesterday, were adamant about keeping Gold’s run of positive days going, but at the end of the day, the short paper trades were just too much, and Gold closed down just $2.00, but given the fact it was up more than $7 during the day, that was the turnaround… Gold Closed Wednesday at $1,897.80, and Silver lost 32-cents to close at $27.76…

The dollar was also bought yesterday, out of the blue… Currency traders were happy with their short dollar trades until yesterday when dollars were the belle of the ball…  Maybe, just maybe there was some PPT participation, but right now I’m not sure, so I won’t say for sure that the PPT was in defending the dollar like it has every time things look bad for the green/peachback, in the past…

The BBDXY closed yesterday at 1,118.23/ Dollar index at 90.04… The euro fell back below the 1.22 handle, and all the other currencies fell into line with losses of their own.  It was a day to commemorate Chuck’s Return! Yeah, that’s the ticket, that’s my story and I’m sticking to it!  HA!

Of course manipulated markets are nothing to laugh about, and I used to get so darn upset when days like yesterday happened, but these days… These days I sit on cornerstones, and count the time in quarter tones to ten… And when I’m finished, I just go on with life because there’s nothing I can do about the price manipulation, nothing, absolutely nothing, say it again!  The Treasury’s Exchange Stabilization Fund (ESF) was created and funded just to manipulate the currency markets…

Now we hear about different trading units that get their hands slapped when they are found to be manipulating prices in currencies, but it’s just peachy dandy for the U.S. Treasury to step in whenever they see things getting sketchy, just find and dandy indeed!  Do, you find that to be somewhat immoral? I do…  And it’s also not fair… But life’s not fair, so you move along, and hope they don’t get in your way very often…

In the overnight markets last night… It was back to the business at hand, which was the continuation of the dollar erosion… the overnight markets were not influenced in any way by the goings on in the U.S. markets on Wednesday, and so the dollar got sold some more. The euro is back above 1.22 this morning, the BBDXY had dropped to 1116.80/ 89.97, and things look about right again this morning. Gold & Silver were not allowed to participate in the dollar selling overnight, and Gold starts today, down $3, and Silver is down 6-cents… Neither of those two negative amounts have me concerned this morning… 

On the Central Bank Digital Currency watch… The Bank of Canada (BOC) yesterday decided and announced that they don’t see the need to develop a digital currency… Really?  So, the rest of the world is going to develop their own digital currency, including your neighbor to the south, and you don’t feel the need to have your own digitial currency?  I found this to be outrageous… And very stupid… like the little guy used to say on the Laugh-In Show… “Very interesting, but stupid”…

Or, and I’m being very, very, very facetious here when I say this… But maybe all those folks that said that the Amero was a real currency (The U.S., Mexico and Canada) will get their dreams come true, when the digitial currency that’s being developed by the U.S. envelops both Mexico and Canada and the digital currency will be call the Amero!   Please do not think I’m being serious here one iota, only having some fun with these stupid digital currencies…

Is it me, or doesn’t everyone question how something that has no backing, no intrinsic value, no real money uses, be worth $38,000?   Do you see the effects of free money at play here? I’m going to stop here because I know I’ve ticked some people off with that thought, and I want us all to be friends…

Longtime acquaintance, Rich Checken, did a video presentation titled: Whip Inflation Now!  It was good and you can find it on YouTube… But hearing that phrase took me back to the 70’s… Come along with me to a visit to the 70’s…   Let’s see, we started the 70’s off with our army in Vietnam, a place most people couldn’t point to on a map, then Richard Nixon closed the Gold window, and soon afterward he resigned. Then we had a replacement president who once played football at Michigan, and had a problem with falling down. But it was in the early to mid-70’s that the removal of Gold from the dollar, began to show its ugly side…Oh, but first we had an Oil embargo, from our friends, NOT!, at OPEC, which caused long lines at gas stations and the price of gas to go from 30-cents to more than a dollar overnight! And then inflation came along, and President Ford, who had a propensity to fall down a lot, started wearing a WIN button… Whip Inflation Now!   But that didn’t do the trick, and it wasn’t until Paul Volcker took interest rates to new heights in the late 70’s that we finally did whip inflation…

OK, now we’re back in current times, and inflation is soaring once again… Some say it will only be transitory, but I’m one that while, I do see that we had come from a shutdown economy (who’s Idea that was to do that should be, oh never mind), but supply chain deliveries are all whacked out, demand is very strong, given the low interest rates, and the all the free money,  inflation is here to stay until we beat it back with higher interest rates again…  I’m just saying…

So… for investor to whip inflation now, they have to have an inflation hedge, and TIPS are not the answer… TIPS (Treasury Inflation Protection Securities) are Treasury bonds tied to inflation, but that’s only going to get you help VS inflation in that security, unless that’s all you own!  No, the real inflation hedges are Gold, Silver, and land… And if the inflation is only rampant in one country, you need to sell that country’s currency and buy some other non-inflationary country’s currency!  Those countries will be difficult to find, given all the run up in debt these past years, but countries that have Central Banks that mandate inflation be no more than 2%, like Australia and New Zealand, would be pieces to the puzzle, along with the Russian ruble, which has virtually little debt to speak of…  

The U.S. Data Cupboard today finally has some real economic data to print… First we’ll see the color of the Weekly Initial Jobless Claims, and then comes the real meat… Durable Goods and Capital Goods Orders… these two will bring the bacon home on the economy folks…

To recap… everything was going along nicely with the erosion of the dollar, until yesterday, when it appeared to Chuck that there was an all-out effort to defend the dollar on both fronts, VS currencies and metals…  Chuck refuses to get too upset about these days any longer, and just accepts that they will happen from time to time…  In the overnight markets, the erosion of the dollar continued, despite what happened in the U.S. on Wednesday… And then Chuck goes back in time to the 70’s, and not to listen to any stupid disco songs! To describe what led up to the inflationary times of the 70’s…  And he explains how to Whip Inflation Now!

For What It’s Worth…  I got this from Ed Steer’s letter yesterday….  It’s an article on Zero hedge.com about how all the stimmy checks have been spent, and now the crash in buying appliances comes, because everyone’s stimmy money has been spent! And it can be found here: Here Comes The Hangover: Soaring Prices Result In Record Crash In Home, Appliance Buying Plans | ZeroHedge

Or, here’s your snippet: “For the past several months we have warned about the pernicious effects soaring prices are having on both corporations (“Buckle Up! Inflation Is Here!”) and consumers (“”This Is Not Transitory”: Hyperinflation Fears Are Soaring Across America”), prompting even otherwise boring sell side research to get (hyper) exciting, with Bank of America predicting that “Transitory Hyperinflation Lies Ahead.”

But none of this has spooked the Fed into conceding – or believing – that inflation is anything more than transitory. And maybe just this once, the Fed has a point because all else equal, by which we mean lack of rising wages, the best cure to higher prices is, well… higher prices.

Presenting Exhibit A: understanding that Biden’s stimmy bonanza is about to end and that soon they will have to live again within their means, Americans’ buying intentions (6 months from today) as measured by the Conference Board, have cratered across the 3 major spending categories: homes, automobiles and major household appliances.

The drop was so massive, it amounted to the biggest one-month drop in intentions to purchase appliances…

This confirms what we noted earlier, namely a record divergence between crashing home buyer confidence (due to record home prices) and soaring home builder confidence (also due to record home prices). Guess which one will matter in the end.

This, for better or worse, screams stagflation: as Lynn Franco, senior director of economic indicators at the Conference Board, said while consumers’ assessment of present-day conditions improved, “consumers’ short-term optimism retreated, prompted by expectations of decelerating growth and softening labor market conditions in the months ahead.”

While it’s clear why stagflation will be “worse”, we say better because if nothing else these data confirm that U.S. consumers are now tapped out, if not today, then certainly 6 months from today when Biden’s trillions in stimmys will have been long spent, and the spending spree will be over.”

Chuck again…  This is something that I’ve said long before there was stimmy check 1… That U.S. Consumers are tapped out…  This is all crazy folks…  will it lead to more stimmy checks?  I bet it does…. Oh, and this one last thought… Whether it’s inflation or Stagflation, it’s all bad! 

Market Prices 5/27/2021: American Style: A$ .7750,  Kiwi .7305, C$ .8266, euro 1.2207, sterling 1.4135, Swiss $1.1132, European Style: rand 13.7157, krone 8.3577, SEK 8.2971,  forint 285.07,  zloty 3.6731,  koruna 20.8478, RUB 73.47, yen 109.15, sing 1.3228, HKD 7.7613, INR 72.48, China 6.3935. peso 19.84, BRL 5.3206,  BBDX 1,116.80, Dollar Index 89.97,  Oil $65.72, 10-year 1.59%, Silver $27.71, Platinum $1,195.00, Palladium $2,824.00, Copper $4.52, and Gold… $1,894.80

That’s it for today… and this week of course…  I now have a couple of days to rest up… We’ll all be busy this weekend as Kathy’s niece is getting married… Good luck to Brian and Lauren…  Some of my kids are participating in the wedding, with little Evie probably stealing the bride’s thunder, when she waddles down the aisle! HA!  This will be the unofficial start to the summer, Memorial Day… Memorial Day is an American holiday, observed on the last Monday of May, honoring the men and women who died while serving in the U.S. military. May God Bless those men and women who died protecting our freedom..  So Memorial Day is more than the local pools opening… So stop to think about the real reason for the holiday on Monday…  Next time we talk it will be June 1…  And I’ll be all by myself once again for two weeks…  All by myself, don’t want to be all by myself any more… (Nilson)  Ok, I nerd a real rockin’ song to send us to the finish line today, and Deep Purple will do the trick with their song: Space Truckin’  don’t know that one? Google it, or YouTube it, you’ll like it, I’m sure! So, please be careful this weekend, and Be Good To Yourself!

Chuck Butler

May 26, 2021

*Currencies are sloth-like in their moves VS the dollar

* Gold finally moves back above $1,900! 

Good Day… And a Wonderful Wednesday to you!  Thank you, thank you, thank you (in my best Gomer Pyle voice) for all the get well wishes sent to me this week… I didn’t mean to scare anyone with a Sunday Pfennig, just wanted to get the word out about no Monday Pfennig while I was still awake… I did lose about 2 bags of blood, which has made me very tired, and weak for a few days… I’m hoping today is better…  A rectus hematoma is what I have, and now they tell me it could take months before the blood disperses and the swelling in my side goes down… I’ve taken to wearing Hawaiian shirts because they fit real loose, and I can hide the big bump on my side! What the heck is going on with my beloved Cardinals? Errors on top of errors last night, was not what the pitcher needed but received! A day game today on the south side of Chicago… I’m greeted this morning by Alan Parsons Project, with their song, that I imagine a lot of you would be singing out loud to me if you could: I Wouldn’t Want To Be Like You…

Well… It’s been a week since I last talked to you, other than the Sunday notice…. And when I signed off last week the euro had moved past the 1.22 level, and the Euro Wannabes, (zloty, forint & korunas) were all posting daily gains VS the dollar, while the other currencies were lolly gagging along…  Gold was inching toward $1,900, and Silver kept going past $28 only to see it brought back below the figure… The old time Dollar Index was 89.88, the new Bloomberg Dollar Index was 1,117.69, and the data in the U.S. just kept printing very uneven…

Skip forward to yesterday, and the euro finished the day 1.2250, the Euro Wannabes are still applying pressure to the dollar, Gold hit $1,901.20 yesterday, and Silver is back above $28.00 with the old time Dollar Index closing yesterday at 89.84, and the Bloomberg Index ending the day at 1,115.74…   So, from all that I guess you can tell that Gold & Silver have been the main movers VS the dollar in the past week, while the currencies, while bid ok, seem to be an afterthought… for the moment that is…

In the overnight markets last night… The erosion of the dollar continued, albeit at a very slow pace, which to me, is exactly what the Fed Heads, Treasury and White House need for the dollar.  Gold has added to its $1899.80 figure yesterday to start the day today at $1,907.40. And the BBDXY is 1,115.20, thus confirming the slow erosion of the dollar, which means your buying power is being slowly eroded away… 

The stock market hasn’t been a haven for investors lately, along with the cryptocurrencies… And all that worrying is pushing investors toward Gold, in my humble opinion…  Inflation worries are really building, and once again, that’s good for Gold, but bad for anyone that doesn’t have an inflation hedge.. 

Well, just for fun this morning, I’ll tell you that the current National Debt is $30.3 Trillion, which means that each citizen’s portion of the debt is $85,000, and to take it further, if we only counted taxpayers, their portion would rise to $225,310….   I thought you might like to know what your elected leaders have done for you all these years, since Gold was removed as the anchor for the dollar, in August 1971…  Oh, by the way… having the dollar removed was only supposed to Temporary, according to Richard Nixon…  Ahhh, that old saying that, ‘There’s nothing more permanent as a temporary government program.” – Milton Friedman

OK… now that I’ve established the our main problem is debt, and that it was all caused by elected officials who never passed up a deficit spending plan that helped his reelection. And they got the wind in their saild by the removal of Gold from the dollar…  So, this August it will be 50 years, that our temporary removal of Gold has been around… 50 years!  50 years ago, I was the only sophomore starter on the Roosevelt High School Football Team that won the Public High League!  Nowadays I can’t even get down in a stance because my mid section hurts so bad!  That’s how long ago that all happened… In the whole scheme of things, 50 years isn’t really that long…

I mean when Kathy and I traveled to London in 1989, and we were tourists, and went to every historic landmark in London, we even took a train ride out to the country to see a castle… I remember thinking when looking at dates of things there, that they had happened long before the U.S. was a country! Now… THAT was a long time ago! 

Well, each and every day, I read more and more writers, economists, analysts, pundits, and hacks like me talking about rising inflation… Pork is up by a large margin, which means bacon is up by a large margin, we all know about Lumber, but did you know that concrete is now in short supply?  I got that little ditty from Dave Gonigam’s 5 Minute Forecast yesterday…  And yesterday the Case/ Shiller Home Price Index for March rose 13.2%!!!!!   That’s greater than any monthly rise during the last Housing Bubble… Just pointing that out now, so there’s no confusion over who told you that another Housing Bubble is having air blown in to it…. Low mortgage rates, my mortgage expert according to himself on TV, Ryan Kelley, tells me there are still mortgage rates in the 2’s…. Exploding costs to build a home with price leaps in lumber, steel and concrete, Builders now having a clause that allows them to raise the price in the contract on the home if building supplies increase, all these things are causing a perfect storm for yet another housing bubble…

Remember the losses and how close we came to collapsing in 2007/08?  This one will be even worse because the casino banks now have more derivatives on their books than ever before, and there’s no one guarding the hen house…. 

Now, I have to say that I may be a bit early in this call, just like I was with the Housing Bubble of 2007/08, when I wrote in the White Paper, The Decline of the Dollar, about how I was seeing early signs of a housing bubble building… That was 2003…

OK… enough of all that!  The good folks at GATA send me a link to an article in the U.K.’s Telegraph, well you have to have a subscription to read it all, so I’ll give you a snippet from the article that can be found here : Bitcoin fever is the primrose path to digital servitude (telegraph.co.uk)

“Bitcoin is already a barbarous relic in fintech time. It has failed to make the grade as a daily means of exchange after 12 years of agitation, bar money laundering, cyber extortion, and Iranian sanctions-busting.

It has not progressed beyond the stage of a speculative asset. It is captivating but is not what the evangelists promised.”

Chuck again… Well, it’s a good read, from Ambrose Evans Pritchard, one of my fave writers…

The U.S. Data Cupboard has the aforementioned Price Index yesterday, and the stupid Consumer Confidence report for this month, which remained very high at 117…   There is no data on the docket to print today, and that usually means it will be a rough day for the dollar… I guess we’ll have to wait-n-see…

It appears that we will end the week with a boat load of data… And it all begins to show up tomorrow morning… The pieces of data that I’m looking to is Friday’s print of Personal Income and Spending…  You may recall that March’s Personal Income was up 21%, and I told you then that it was a result of the stimmy checks being received and spent in March. And I’m sure we’ll see confirmation of that thought on Friday…  And without currency to spend, because the stimmy check was wasted already, Consumer Spending should also take a big slide downward in April… 

To recap:  It’s been a week since Chuck last talked to you, and in that time, not much has happened in the currencies, they remained well bid, just not moving higher at this time. Gold touched $1,901 yesterday before falling back to $1,899.40… Silver is over $28 at $28.25, Oil was up over $66 before falling back, and all the building commodities are exploding in price…

For What It’s Worth:  Longtime readers know of my adoration for John Williams of Shadowstats.com , and while I don’t subscribe to his newsletter (I should) I love it when I can get snippets of what he’s talking about other places… And in this case I was able to pull this from the Burning Platform website, where they printed John Williams talking about hyperinflation! And it can be found here: “The Fed Has Lost Control” – John Williams Warns Of Hyperinflation In 2022 – The Burning Platform

Or, here’s your snippet: “Economist John Williams, founder of ShadowStats.com, says the Federal Reserve has painted itself into such a tight corner with the economy it really has only two choices.  Williams says it comes down to “Inflation or Implosion.”

What would happen to the financial system if the Fed stopped printing massive amounts of money for stimulus and debt service?  Williams explains,

“You could see financial implosion by preventing liquidity being put into the system.  The system needs liquidity (freshly created dollars) to function. Without that liquidity, you would see more of an economic implosion than you have already seen.  In fact, I will contend that the headline pandemic numbers have actually been a lot worse than they have been reporting.  It also means we are not recovering quite as quickly.  The Fed needs to keep the banking system afloat.  They want to keep the economy afloat.  All that requires a tremendous influx of liquidity in these difficult times.”

So, is the choice inflation or implosion?  Williams says, “That’s the choice, and I think we are going to have a combination of both of them…”

Chuck again… once again a very good article that I strongly suggest you read in its entirety… This man knows what he’s talking about folks…

Market Prices 5/26/2021: American Style: A$ .7777,  kiwi .7306,  C$ .8276, euro 1.2231, sterling 1.4164, Swiss $1.1168, European Style: rand 13.8108, krone 8.3220, SEK 8.3025,  forint 287.03,  zloty 3.6727,  koruna 20.8156, RUB 73.41, yen 108.89, sing 1.3233, HKD 7.7620, INR 72.67, China 6.4086, peso 19.83,  BRL 5.3192,  BBDXY 1,115.20,  Dollar Index 89.77,   Oil $65.91, 10-year 1.56%, Silver $28.15, Platinum $1,208.00, Palladium $2,842.00, Copper $4.50, and Gold… $1,907.40

That’s it for today… Good to be back in the saddle, although, I am still quite weak… I got tired yesterday walking out to the back yard to my tiki hut…  I go to the eye prosthesis doctor today, and I believe it’s time for a new shell to be made, I’ve been having some problems with the one I’ve had for 6 years now… The one before that lasted 5 years… So, I do believe it’s time… Thinking back to when I first got the eye shell, I was at Panera’s and ordered, started to walk away from the counter, and felt and itch in my eye, I instinctively went up to rub it and rubbed the wrong way, the shell popped out and fell to the floor, the girl at the counter turned white! And Gasped, Oh My! I bent over, picked it up put in my pocket and went to pick up my lunch! Funny story.. I’ve never done that again!  OK.. I’ll be back tomorrow, as long as God is willing and the Creek don’t rise… David Crosby and Graham Nash take us to the finish line today with their song: Wind On The Water…  It’s a song about the overfishing of whales… I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

 

 

May 19, 2021

* Currencies & metals drift on Tuesday

* And start today in the red… 

Good Day… And a Wonderful Wednesday to you…. This is the last Pfennig of this week, as tomorrow, bright and early I have to report to the hospital for a new set of scans…  Cardinals got back on the winning side last night… I have one question for Cardinals fans… What would we be doing without Nolan Arenado this year? This guy is fun to watch play baseball folks… there’s really not that much to talk about today, so hopefully something pops up, or else this will be short-n-sweet…  The Turtles greet me this morning with their hit song: She’d Rather Be With Me…. “some girls love to run around, like to handle everything they see, but my girl, has more fun around, and you know she’d rather be with me”… 

OK… before we go to the markets, which didn’t rally excite anyone yesterday with movement, I have a couple of things on my mind that I’ll touch on quickly….

1. Bank of America is raising their min. wage to $25 to attract potential hires…
2. Fidelity announced that they will allow teenagers to trade stocks

I could rant and rage about these things, but I’ll just let them simmer on the stove for now, and allow you to come up with all that could go wrong here with these decisions…

So… The currencies never found a strong bid yesterday, after the overnight markets on Monday night took them higher VS the dollar.  The BBDXY rose to 1,116.47 from 1,115.74 in the moring, and the old Dollar Index dropped from 89.84 to 89.83… So, with either index you can see the moves were muted at best… The euro had the best day, rising higher in the 1.22 handle, and I don’t know if you’ve been watching this currency, the forint, in the market prices roundup, but the forint has really been on a mission from God, to move higher VS the dollar… 

And then, longtime readers will recall that I’ve always said that a true dollar selloff will see the Euro Wannabes (forint, zloty, and koruna) rally ahead of the other currencies, and that’s what they are doing right now… So.. the $64 dollar question remains, “does the PPT come back in to protect the dollar again?” And if yes, then “when”? Because, like I said the over day, when the dollar is entrenched in a weak trend, it’ll be too late for the PPT to try and defend the dollar…  Oh, they’ll still attempt to change the markets collective minds, but it will be of no use…

Gold & Silver also were forgotten about yesterday, and they spent the day back and forth between loss and gain. But at the end of the day, Gold was up $2.70 to close at $1,870.10, and Silver was up a whopping 2-cents to close at $28.25… Positive yards gained… Remember how I’ve explained that a football team on offense must gain positive yards or else find themselves behind the chains… And the same goes for Gold & Silver.. positive gains VS the dollar prevent being caught behind the chains…  I’m just saying…

In The overnight markets last night… there wasn’t the emphasis to sell dollars last night as there was the previous night, and so the currencies drifted in the overnight markets with the BBDXY rising to 1,117.69 this morning from last night’s close of 1,116.47… So, as you can see the move to buy dollars overnight wasn’t with any kind of conviction. I think traders were scared that the Fed’s Meeting Minutes that will print today, will reveal some secret to help the dollar…  I think they are way off base here, but, with the dollar buying muted, I won’t lay it on too thick for them… 

Gold is down $7.20 in the early trading this morning, and Silver is down 48-cents to bring it back below $28…   I don’t see anything as to why this is going on. The only thing I’ve seen is a story that talks about how China is attempting to ban cryptocurrencies…  I found this: “According to the PBOC’s official WeChat account, cryptocurrencies should not be used in financial markets or the real economy because they are not “real” currencies.”

That’s China getting the groundwork to ban the cryptos before the make a country wide distribution of their digital renminbi / yuan…  I can’t say that surprises me on iota, for I’ve long said that once Countries develop their respective digital currency, they will take steps to ban the existing cryptos to eliminate any competition… The same will be done here in the U.S. I’m darn sure of that! 

This news has caused some further slippage in Bitcoin this morning, and because of that I would have thought Gold would be the beneficiary of that slippage… See how I circled back and tied this all up with a bow?  Genius, writing, don’t you think? HAHAHA!  As if! 

The U.S. Data Cupboard yesterday had the April Building Permits and Housing Starts… Permits were flat with last month’s number, and Starts were down from March…  Today’s Cupboard has the Fed’s Meeting Minutes, from their last meeting, which yielded nothing new, and so I don’t expect these minutes to have any earth shattering news in them!  And former Treasury Sec. Lawrence Summers, will be speaking in Atlanta…  I wonder what he has up his sleeve?  Maybe I should ask Bullwinkle about that? HA!

To recap… It was a day to take 5, for the currencies and metals, after seeing a huge selloff in the dollar in the overnight markets the night before yesterday, there was no follow up from their U.S. counterparts… Chuck is concerned about two announcements yesterday, and left it up to you dear reader to figure out what the problems might come these decisions…

For What It’s Worth…  This information and website came to me curtesy of a former colleague, Neil George, and it’s about how much a resident of a state can expect to pay in taxes in their lifetime in that respective state…  The graph is very useful as it breaks down the different taxes in a state, and the article can be found here: Life of Tax: How Much Tax is Paid Over a Lifetime | Self.

Or, here’s your snippet: “The US government collects over $5.3 trillion in taxes each year, but how much will the average American pay in taxes throughout their lifetime?

We used the Bureau of Labor Statistics’ expenditure numbers to see what we as Americans were spending each day to work out what taxes we would be paying until we’re no longer able to contribute financially. It’s a lot.

We’ve analyzed this data specific to each state so you can see what you may be giving to your local government in taxes across your entire life.

The average American will pay $525,037 in taxes throughout their lifetime

That’s an average of 34.3% of all lifetime earnings spent on taxes

Residents of New Jersey will pay the most in lifetime taxes ($931,000) and people in West Virginia will pay the least ($321,000)

Tax on earnings is where most tax will come from, with the average American paying $339,173 in a lifetime

Owning a car will cost an additional $29,521 in tax payments alone

Tax on property will set you back an additional $128,581 above the property price and maintenance

Tax payers in California will pay the most on everyday expenses ($40,084), followed by New Yorkers ($39,745)

Using our state averages, we can see that the average American will pay $525,037 over their lifetime, almost 65% of this will purely be tax on earnings. This amount varies drastically by state but uses averages for earnings, expenditures, property and auto taxes.”

Chuck again…  Ok, for all of you who live in states with high tax rates, the thing that comes to mind is…. Move! But I for one know how difficult that would be. In my instance, my kids and grandkids all live close to me… If I were to tell Kathy that we were going to move for tax breaks, she would file for divorce! Just kidding, she really loves me… HA!   But you get what I’m saying… 

Market Prices 5/19/2021: American Style: A$ .7758,  kiwi .7201,  C$ .8275, euro 1.2216, sterling 1.4181, Swiss $1.1108, European Style: rand 14.0319, krone 8.2636, SEK 8.3125,  forint 287.32,  zloty 3.7058,  koruna 20.8391, RUB 73.71, yen 109.12, sing 1.3311, HKD 7.7642, INR 73.16, China 6.4253, peso 19.90, BRL 5.2635, BBDXY 1,117.69, Dollar Index 89.88,  Oil $64.56, 10-year 1.66%, Silver $27.78, Platinum $1,217.00, Palladium $2, 942.00, Copper $4.65, and Gold… $1,862.90

That’s it for today… See? I don’t have to always go ballistic on news items out there!  I’m still ailing with the pulled muscle in my stomach, it is being suborn about healing, and every time I move, or worse, have an allergy cough, OWWWWWW!  I wonder what will show up on the scan tomorrow? One time years ago, right after I was first being treated for cancer, I had a real bad cold, and then wen for scans, and the oncologist thought my lungs had a cancerous mass in them, when it turned out I had pneumonia… A 5 day supply of steriods wiped that out, and all was good!  I guess I would take pneumonia over lung cancer any day!  Well, our monsoon season, which was supposed to take place in April, but has occurred in May, is leaving us today, and the sun is supposed to come back out. YAHOO!  I heard last night that Evie and Braden are spending the night with us Friday night… YAHOO! Monday night at dinner she kept pointing to me, and waving hi from across the table, all the while with that beautiful smile she has… And this visit will allow me to let her crawl up in my lap and sit there while I read her books! And Braden turns 10 on Sunday!  Happy Birthday, little buddy! One of my top 10 all-time loved songs from the Blue Jays, takes us to the finish line today with their song: I Dreamed Last Night, man I DO love this song! I hope you have a Wonderful Wednesday, and rest of the week, and I’m sorry no Pfennig tomorrow…  I hope you will Be Good To Yourself!

Chuck Butler

 

May 18, 2021

*currencies and metals have strong rallied on Monday

* When will they ever learn? 

Good Day…. And a Tom Terrific Tuesday to you! Well… another day, and another day with the pain in my stomach waning… I must have really done major damage inside me because the discoloration, and swelling doesn’t seem to want to go away, just yet…   Last night, the Butlers met Grace’s dad. A couple of weeks ago, we met her mom, but her dad, had not arrived from Dubai yet… I just love spending time with Grace’s mom, Lori… She, as I described previously, is a real southern belle…  Now for those of you trying to figure out who Grace is… (where have you been?) Grace is Alex’s steady girlfriend for over 3 years now…  Little Evie was there, along with darling Delaney, so I got to get hugs and kisses from my two favorite girls!  Los Bravos greet me this morning with their song: Black is Black…

As I said yesterday, with little to no real economic data this week, traders will be searching far and wide to anything that would give them direction on where to take the currencies and metals. And so while the dollar lost more ground yesterday, the currencies didn’t move much…  Gold & Silver though, did see some major moves upward on the day, so, let’s grab a cup of coffee, sit down, and review the moves yesterday.

The old Dollar Index moved downward from 90.16 to 90.07, and BBDXY moved downward too from 1,121.04, to 1,119.31…  So, both indexes confirmed what I just said, that the dollar moved further downward, but not by much…  Gold did move upward by a lot, or the dollar moved downward by a lot to Gold, either way you look at it, Gold was up $22.50 yesterday to close at $1,867.40, and Silver rose by 71-cents to close at $28.25… 

Ok, I hate to be bearer of potential bad news, but we have to always keep aware of the wolf that’s at the door, with the anti=dollar assets… Previously, when things were looking like the dollar was headed on a ride on the slippery slope, the PPT (Plunge Protection Team) with the ESF (exchange Stabilization Fund) stepped in and made sure that the dollar did not take one more step toward the slippery slope. There has to be a slow, steady downward move in the dollar, and not a steep dive downward, that leads to another steep slide down…

The Fed has stated that they want inflation to rise, and one of the easy ways to insure inflation rises is to allow your country’s currency to weaken by a large amount, this is called allowing inflation to be imported… If we could ever have a few weeks of the dollar getting weaker by the day, it would confirm that the dollar was in a new weak dollar trend, and when that happens, we’ll no longer see the PPT stepping in to protect the dollar, for if they did it would akin to “catching a falling knife”…

In the overnight markets….  there seemed to be nothing stopping traders from selling dollars, and sell them they did… The euro has breached the 1.22 figure, and the rest of the currencies are starting the day here in the U.S. with some lofty figures. The Petrol Currencies all have extra oomph behind them this morning, as the price of Oil has risen to a $66 handle… The Canadian dollar/ loonie, is trading above 83-cents, the Norwegian krone is looking spiffy, along with the Brazilian real and Russian ruble this morning… 

Ed Steer tells me this morning that Gold has moved past its 200 day moving average with that runup yesterday.  Gold is flat this morning, but Silver is up 23-cents as they start their days respectively…  I read a blurb this morning on Kitco.com that talked about how the metals bulls are back and pushing the metals higher, with the next stop $1,900… 

In my opinion, this move higher in Gold these past few trading days, is long overdue, as inflation has been rising, and I don’t care if it’s only transitory, it’s still rising, and that calls for Gold to respond… And to date it has been having the reins pulled on it way too often… Time to let loose and let ‘r rip!  And I’m ready for that! 

When will they ever learn? When will they ever learn… Those famous song lyrics by Pete Seeger, are always on my mind, because it seems investors, Governments, Treasuries, Central Banks never remember the past. What got them in their situations, and so they are resigned to having to deal with what comes their way, simply because they failed to learn from the past… 

And that would be sort of OK, if it only affected them, and not taxpayers like you and me…  We foot the bills for their ignorance, and inability to learn lessons… You know me I’m a Constitution, Bill of Rights, kind of guy, and in those precious documents I can’t find it written anywhere that the U.S. Gov’t would be immorally running up debt, or leaving taxpayers in the red…  You know… one of these days, it’s all going to come crashing down on them, and they’ll look at each other and say it wasn’t their fault, it was Capitalism’s fault… And they would be more wrong!  

Ok, let’s go onto something else as this discussion has me really full of you know what and vinegar, and I could end up saying something stupid… 

Remember a few weeks ago, when I told you about how there was talk that the cryptocurrencies were going to see some regulation in the future, and I wondered if this would be a problem for these cryptocurrencies?  I don’t know, because I don’t really follow these digi-currencies, but it sure seems to me that this is what has caused some investors to take profits… Since then Bitcoin has fallen from $58,000 to just below $45,000…  And that’s all I have to say about these digitals…

Longtime friend, best selling author, and publishing guru, Bill Bonner, has some thoughts in his Daily Economics letter yesterday on cryptos… Here’s Bill: “And so… whether we look at the private sector or the public sector… at cryptos or at federal deficits (already headed for an 8-month record over $2 trillion)… at Elon, or at Janet, Joe, or Jerome…

…well, everyone is nuts.

Or else we’re just too “out of it” to appreciate what is going on.

Maybe this is just one of those times in history when you have to be young… or brain damaged… to understand it. No one over 50 can be trusted to “get it.”

But we’re not sure if that “50” refers to age or I.Q.”

Chuck again…  I sure do love reading his thoughts every day…

Well, all you families out there with young kids, you can expect to begin to receive your monthly checks from the Gov’t for child credits starting in July…  Now that’s all fine and good, but once again, where does this money come from?  Should the Gov’t be sending out money they don’t have?  Well, we all know that anything that makes sense doesn’t get implemented in Washington D.C. I truly believe that our current debt will be $30 Trillion at the end of this year…

But I may as well go yell at the walls, at least I would probably get a better response out of a piece of drywall than a Congressman…  I’m just saying…

In addition, a few times in the past year, I’ve highlighted a state that passes the no sales tax on Gold & Silver sales law… The number of those states bringing those bills to a vote are growing… And once everyone in the States, doesn’t charge sales tax on Gold & Silver we’ll see these two take steps toward new record levels…  Are you ready?

There are no changes to the U.S. Data Cupboard offerings today, as Building Permits for April, will print… nothing more, nothing less… Tomorrow, the big print will be the Fed’s Meeting Minutes, but since nothing happened at the meeting, I doubt the minutes will hold anything new for the markets.

To recap… the currencies continued to push the dollar down yesterday, but the downward move was small on the day… Gold & Silver had great days, and that brought Chuck to remind everyone that the last time we were here, the PPT came in to defend the dollar.  In the overnight markets the dollar has gotten sold down, with the old Dollar Index at 89.84 this morning. Chuck explains how the Fed needs a weaker dollar to help import inflation, and he also questions the gov’t’s checks they plan to send out on a monthly basis in July…

For What It’s Worth… Well, for the past 10 years I’ve chronicled Russia’s amassing of Gold in their reserves… And then added in Russia’s desire to dedollarize… And what you have now is this report on Bloomberg.com that Russia now holds more in gold than in dollars, and it can be found here: Russia’s $583 Billion Reserves Now Hold More Gold Than Dollars – Bloomberg

Or, here’s your snippet: “A multi-year drive to reduce exposure to U.S. assets has pushed the share of gold in Russia’s $583 billion international reserves above dollars for the first time on record.

Gold made up 23% of the central bank’s stockpile as of the end of June 2020, the latest date for which data on the breakdown is available, according to a report published late Monday. The share of dollar assets dropped to 22%, down from more than 40% in 2018.

The shift is part of a broader strategy outlined by President Vladimir Putin to “de-dollarize” the Russian economy and lower its vulnerability to U.S. sanctions amid deteriorating relations with Washington. Gold is now the second-biggest component of the central bank’s reserves after the euro, which makes up about of a third of total assets. About 12% of the stash is in yuan.

The increase in Russia’s gold reserves was aided by a 26% surge in prices between June 2019 and June 2020. The central bank also bought $4.3 billion worth of the precious metal over the period, according to the report.

Russia has been growing its international reserves in recent years

Russia spent more than $40 billion building a war chest of gold over the past five years, making it the world’s biggest buyer. The central bank said it stopped buying gold in the first half of last year to encourage miners and banks to export more and bring in foreign currency into Russia after oil prices crashed.”

Chuck again…  And China is doing this too, folks… And all that was confirmed by the news I gave you previously that the total % of dollars held by Central Banks in reserves has hit an all-time low… And the other thing that I saw in this report was that the data was from a year ago, I would think in the past year, Russia has gotten rid of scores of more dollars… I’m just saying… 

Market Prices 5/18/2021: American Style: A$ .7796,  kiwi .7252,  C$ .8309, euro 1.2209, sterling 1.4185, Swiss $1.1130, European Style: rand 13.9981, krone 8.2292, SEK 8.3043,  forint 287.30,  zloty 3.7065,   koruna 20.8164, RUB 73.91, yen 109.04, sing 1.3299, HKD 7.7655, INR 73.08, China 6.4381, peso 19.74, BRL 5.2709,  Dollar Index 89.84, BBDXY 1,115.74,  Oil $66.56, 10-year 1.64%, Silver $28.48, Platinum $1,227.00, Palladium $2,976.00, Copper $4.70, and Gold… $1.867.20

That’s it for today   Well, our Blues had to start out their playoffs without one of their best players, who was ruled out for Covid Protocol… And after playing 2 good periods and being tied 1-1, they ran out of gas in the 3rd period, and lost 4-1.. That was Game one of their best of 7 series with Colorado… Dinner last night was great, and the company was even greater!  We’ve been in a rainy period that supposed to begin to end tomorrow.. I sure hope so, because I didn’t remember moving to Seattle…. Hamilton, Joe Frank, and Reynolds takes us to the finish line today with their song from the 70’s: Fallin’ In Love…  This song reminds me of when I was traveling the country with the band, and it kept playing on the radio… I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler

 

 

May 17, 2021

* Currencies & metals have good rallied on Friday

* Kitco.com allows Frank Holmes to talk price manipulation! 

Good Day… And a Marvelous Monday to you!  It’s Tax Day… and Pfennig Tradition calls for this: Should five percent appear too small Be thankful I don’t take it all ‘Cause I’m the taxman Yeah, I’m the taxman- The Beatles!

What a disastrous weekend for my beloved Cardinals! They got swept by the Padres out in San Diego. I had just been talking about how the Cardinals pitching was doing so well, and then they went West and walked 26 batters in 3 games!  Baseball is a difficult enough game to win without putting so many runners on board! It was a kind of yucky weekend here weather wise, and this whole week is supposed to be about the same! UGH! I’m still waiting for consistently warm May days…  My cold is gone… all that remains is the muscle pain in my stomach…  Steely Dan greets us this morning with their song: Kid Charlemagne….

Well, Friday was a good day for the currencies and metals, folks… It all came about as a reaction to the bad data that printed on Friday… More on the that bad data below…. Well, it took about a week for the euro to get back to the 1.21 plus area, but it finally rose above 1.21 on Friday… About a week ago we had the PPT come in to defend the dollar, and that brought the euro back to the 1.20 range. So, the Big Dog (euro) is eating again, and gobbling up dollar bugs!  The BBDXY was down a few shekels on Friday, opening the day at 1,125.08 and ending the day and week at 1,121.04…   It’s taking me some time, but I’m getting used to using the new Dollar Index that includes the Chinese renminbi/ yuan.

Gold & Silver had a good day on Friday too… Gold rose by $17.40, to end the week and day at $1,844.90, and Silver rose on Friday by 34-cents, to close the day and week at $27.54…The Price of Oil was up on Friday, So, all in all a good day for the anti-dollar assets…  It too took Gold & Silver a week to get back to where they were before the engineered takedown by the PPT…   So, hopefully, everyone that wanted to buy at cheaper levels, got in, last week, while the getting’ was good!

So, we start the week with the overnight markets last night… And in those overnight markets, the dollar has slipped a bit more, and Gold is up $6.90, and Silver is up 22-cents… This is going to be a strange week in that there is little to no real economic data that’s printing, and so the markets will be looking at other things to trade off of…  News like more stimmy checks, or inflation news, etc.  Traders will have to search far and wide for anything to get them going in one direction… 

So, basically, what I’m saying is that I don’t think we should look for any major moves in the currencies & metals this week, which is fine with me, in that as long as the general direction moves upward in a slow, stealth-like manner, as to not ruffle any PPT feathers, is just fine with me! 

OK, circling back to Gold…  the folks over at Kitco.com do a great job of reporting prices, writing articles and research on metals, but one thing they’ve avoided all these years is any acknowledgement of price manipulation of Gold… but that all changed last week, when long time Gold Fund Manager, Frank Holmes, was interviewed and went straight for the jugular with price manipulation, and Kitco.com printed it!  Here’s a snippet of Frank’s talk : “Governments and central banks might have an interest in “stabilizing” gold prices in order to maintain public confidence, which may be an explanation as to why the gold price did not move up on the release of last month’s headline record inflation data said Frank Holmes, CEO of U.S Global Investors.

Headline inflation came in at 4.2%, the highest since 2008.

“The threat of gold exploding would basically say they’ve lost control, and I really think there’s some kind of stabilization, if you want to call it,” – Frank Holmes

I met Frank Holmes many years ago, and had dinner with him and Thom Calandra in Las Vegas… And then we never crossed paths again…  Strange how that all works out, eh? But I’ve read his articles through the years, for he knows what’s going on, and is unafraid to talk about it… Sort of like someone else I know quite well…  ME! 

So, in my mind, if the folks at Kitco.com are willing to print an article that talks about price manipulation in Gold, then the whole price manipulation story is coming more to light… The spotlight isn’t on it yet, but it’s about half-way…  If the Corprations and hedge Funds and Pensions and Insurance companies would all stomp their feet and complain about price manipulation, the media would finally admit that it exists, and write about it…  Unfortunately, the day I see that happening is the day I’ll be turning over in my grave… I sure hope it doesn’t take that long, but since none of these groups have even hinted that they are unhappy with price manipulation, it’s going to take some time… 

Well… I finally filed my taxes on Friday… It’s all different now that I’m retired and my income consists of Social Security, and some investments… I don’t know what took them so long to get them done, but I’m just glad I don’t have to do it any longer!  Game time is on time, right? 

The Cardinals of a long time ago, had the great power hitter, Richie Allen for one year… And it was a year that the Cardinals were out of the pennant race in August… The reporters would ask Richie how his knee felt, and he would reply, “It fells like 8 games out of first place”…  that’s funny now after all those years gone by, but I doubt it was funny then…

OK… onto other things… I saw a blurb on Google on Saturday, that said, “2020 tax filers will receive a supplemental stimmy check”… Wait! What?  Enough is enough! Stop this madness before everyone is holding out their hats waiting for another stimmy check, that’s really nothing but fake money, as it was never earned by anyone, instead the Gov’t just made some computer entries and voila! It’s in your bank account.

I’ve long banged on the drum and shouted from the rooftops that the U.S. Gov’t needed to only spend money they had collected in taxes…  Deficit spending came about because there was no anchor preventing it… Gold had been replaced by the “Debt Ceiling”, which used to be a bunch of show for the people to make them think our elected officials were serious about it… But every time the debt ceiling was reached, it was thrown to the curb, and a new debt ceiling number was announced…  These days, we don’t even have the dog and pony show for the Debt Ceiling any longer… It’s a Deficit Spending Palooza… And that, folks, is going to be end of the financial system that we all love…  bye, bye… 

The U.S. Data Cupboard on Friday last week, as I said above, was to blame for the dollar weakness, and April Retail Sales were flat 0.0% after the large March number, which I had explained last month was due to the stimmy checks…  In addition we saw Industrial Production fall in April from March’s 2.4% to just .7% in April…  And then finally, the Consumer Sentiment report for the first two weeks of Mayl fell… can you believe that one?   Well, it did… from 88.3 to 82.8… I guess that weakness in Bitcoin caused that! 

So… all in all, the data from last week was not good, and very sketchy…  Uneven if you will… And that doesn’t spell a strong economic recovery, and I can hear the naysayers of inflation yelling from the rooftops that inflation is only transitory…  But like I keep telling you, dear reader, this is not your father’s cyclical inflation… This is systemic inflation, the kind that caused by money printing, and stimmy checks…  That’s my point and I’m sticking to it!

This will be a week of no real economic data printing…  Yes, we’ll still have the Weekly Initial Jobless Claims print on Thursday, but even this print has become hold news, as the claims have been falling for weeks now… The problem here is while the Claims may be falling there’s still 16.4 Million receiving Unemployment benefits… Yikes!  So, most of the data this week will be housing stuff, which we all know is getting oh-so similar to 2007…. 

To recap… The currencies, metals and Oil all rallied on Friday, on some very weak economic data in the U.S.  Chuck points out that it took the euro and gold about a week to get back to the levels they traded at before the engineered takedown by the PPT….  So, there was about a week of buying at a cheaper levels in place… Chuck makes a Big Deal out of the fact that Kitco.com printed an interview with Frank Holmes who talked about price manipulation, something that Kitco had not done previously… And the data cupboard is basically empty this week with some housing data, and the Fed’s meeting minutes.

For What It’s Worth… Well, I talked about this article a couple of times last week, and Thursday it finaly printed. I’m talking about the Dennis Miller article that I did a lot of work on , about looking at 5 years inot the future…   And it can be found here: www.milleronthemoney.com 

Or, here’s your snippet: “CHUCK: Hold on tight, here we go down the rabbit hole…

So, losing the advantages I outlined would bring about quite a few changes in our economy, our value of the dollar, which affects your buying power, and life as we know it…

Any future weak dollar trend could easily trigger the loss of the reserve currency status, affecting everyone:

• A sudden dollar collapse would create global economic turmoil.
• Investors would rush to other currencies.
• Investors would rush to other assets, such as gold and commodities.
• Demand for Treasuries would plummet.
• Interest rates would rise, and possibly very high.
• U.S. import prices would skyrocket, causing inflation.
• The cost of commodities like Oil would increase.

As an example, I used to compare gas prices. In the U.K., gas costs $8 a gallon as compared to the U.S. being $3. We would all pay what everyone else in the world pays for gas.

Remember when the Beatles appeared on Ed Sullivan in 1963? They showed pictures of their home town, Liverpool, England. Those pictures are as depressing now, as they were then.

The U.K. lost the reserve currency status after World War II; 20 years later they still hadn’t recovered, economically, and psychologically.

The U.S. would probably have to default on some debts; causing a major shift around the world out of dollars, and stocks. I’d expect damage to your investments, psyche and your buying power.”

Chuck again… Part II of this article will be out this Thursday, and I don’t think it’s anything you’ll want to miss… But as my good friend Rick B, said after reading Part 1… “I had to hide away the sharp objects”…

Market Prices 5/17/2021: American Style: A$ .7760,  kiwi .7212,  C$ .8260, euro 1.2156, sterling 1.4105, Swiss $1.1103, European Style: rand 14.1378, krone 8.2623, SEK 8.3484,  forint 289.53,  zloty 3.7325,   koruna 20.9773, RUB 73.96, yen 109.20, sing 1.3351, HKD 7.7673, INR 73.25, China 6.4318, peso 19.89, BRL 5.2709,  BBDXY 1,120.15,  Oil $65.50,   10-year 1.62%, Silver $27.76, Platinum $1,234.00, Palladium $2,957.00, Copper $4.63, and Gold… $1,851.80

That’s it for today… Well, I was right, and my wife was wrong…. She said I needed to go to the doctor, that I didn’t sound good… And I told her it was just a cold that would take 10-14 days, and that’s exactly what happened! I’m still dealing with allergies, but that’s nothing unusual… Last Thursday night, I was invited to attended a former colleague’s last day in World Markets… I had hired Antione years ago, and so I was included in the send off… And guess who else was there? My longtime friend, and former boss, Frank Trotter! There will be a family wedding on Memorial Day Weekend, coming up, and Kathy asked me if I had something to wear to a wedding… And I thought, hmmm, good question since I’m down 3 pant and shirt sizes! I guess I had better look into that and not wait until the morning of the wedding!  The Band, A-ha takes us to the finish line this morning with their hit 80’s song: Take Me On… The range in this guy’s voice is incredible! Alright, I hope you have a Marvelous Monday, and I trust you will Be Good To Yourself!

Chuck Butler

 

May 13, 2021

* Currencies & metals get sold in a move to protect the dollar

* Markets believe that the Fed will hike rates to combat inflation? 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, besides the pain in my stomach from the pulled muscle, I do believe I’m through with the cold… A strange reaction to the inflation data has me really full of you know what and vinegar this morning! My beloved Cardinals couldn’t find their bats last night and lost, but our Blues played well and won their next to last reg. season game last night.  So it was a win one, lose one night… The Eagles greet me this morning with a song from their first album: On The Border…  Not a radio hit song, and not on their greatest hits, but a song that I always liked, and so it’s on my iPod!

Well, what have we here? A sign that the BLS is finally coming on board that inflation is roaring like a lion in our faces? In April, the Consumer Price Index for All Urban Consumers rose 0.8 percent on a seasonally adjusted basis; rising 4.2 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.9 percent in April (SA); up 3.0 percent over the year…  So, if you don’t drive, or eat, then your inflation rate is lower…  I still don’t get the reasoning behind taking food and energy out of the equation… Sure they can be volatile, but it’s not like people don’t use them!

That’s right 4.2% rise in the last 12 months…  Of course the BLS has a long way to go to catch up with John Williams’ Shadow stats, where he shows that CPI is actually 8% if we calculated it like we used to before Clinton and Greenspan implemented hedonic adjustments to the index…  Now, 8% kind of feels about correct, don’t you think?  And what do you think Gold did after this data print yesterday?

Well, it was scrambling to stay afloat, that’s what! The price manipulators made sure of that, as they showed up at the COMEX’s opening with arms full of short Gold (& Silver) paper trades… These no good varmints knew, like I did, that CPI was going to show a rise in inflation, so they made sure that there was no chance that the Gold bugs would be able to push Gold’s price higher on the data print…

So… here was the mindset of traders and investors yesterday… “Hey, let’s buy dollars, because they are going to come with runaway inflation!”  I say hogwash, this selling of currencies and metals had the PPT’s finger prints all over it… There’s just no way, that an intelligent trader, or investor saw the inflation data yesterday, and said, “Ooohhh, boy a buying opportunity for dollars”….  

I will say that one of the reasons given for the dollar run up yesterday was that with inflation soaring, the Fed will have to address this very soon with rate hikes…  And to that I say, Balderdash!  The Fed isn’t raising rates for at least another year, folks… Their Chairman said as much when last asked about inflation rising…  The Fed truly believes like  some economists that this inflation is only “transitory”…  Yeah, like income taxes, and removing Gold from backing the dollar were only temporary measures… 

So, the currencies got sold, Gold got sold, Silver got sold, bonds got sold, stocks got sold, shoot Rudy, even Bitcoin got sold, hmmm, Oh we did have a winner, winner Chicken dinner rising asset class yesterday, and it was… drum roll please… the price of Oil….  But that has been corrected in the overnight markets and now the price of Oil is under pressure too… What were Oil traders thinking, having the audacity to move the price of Oil higher, when everything else was getting the snot kicked out of it? They should have known better… But now they do! 

The price manipulators sold Gold down $22.50 to close the day at $1,1816.40, and Silver got sold down $64-cents, to close the day at $27.08….  The BBDX rose on the day from 1,120 in the morning to 1,126.68 at the end of the day…  As I looked at the currencies last night, I didn’t see one currency that held its ground yesterday, even the Steady Eddie Chinese renminbi/ yuan, lost ground on the day…

What to make of all this is confusing… The dollar bugs think the Fed is going raise rates to combat rising inflation, and Chuck thinks they are so wrong, they’re almost right!  That’s one of my fave sayings through the years, and I haven’t used it in a very long time! I think that this type of inflation, which, as I’ve explained previously, is systemic inflation, that’s created with fake money, stimmy checks, and more fake money…  An economist that I truly admire and follow, Dave Rosenberg, doesn’t see it this way and continues to say that the rise in inflation is only transitory…

Of course I never heard what he had to say about the rise in Wages that were reported a week or so ago…. But que sera sera….  I guess only time will tell, who’s right about this inflation and who’s wrong…  Bill Bonner had a great line in his letter yesterday, He asked if “inflation had brought its big pillow and suitcase to stay awhile”?  

In the overnight markets there was more dollar buying, as this totally incorrect theory, of the Fed needed to hike rates is permeating through the Global markets. The BBDXY is up to 1,127 this morning, and all the currencies, including the Aussie dollar (A$) and N.Z. dollar / kiwi, which had previously defied the dollar buying have finally succumbed and have lost major ground in the last two trading days.  

Well this is the day that Dennis Miller’s letter on the loss of the reserve currency status for the dollar comes out, and to add salt and pepper to the sauce, one of my fave economists, Danielle Di Martino Booth, had this to say over at Kitco.com, “U.S. dollar’s status as reserve currency is in jeopardy, ‘I’m bold gold, silver & platinum.”  

It must pain here to see what the price manipulators do to these metals from time to time, don’t you think? I say that, because it pains me… Now, I’m not one to worry about the actual price of Gold because I know I’m not selling my Gold or Silver, but I worry about short term Gold & Silver holders, and how they think these store’s of wealth metals are a commodity that gets traded daily…  Oh, well… it is what it is… and there’s nothing I can do about it, so I’ll move along here for these are not the droids we’re looking for… 

In other news yesterday the St. Louis Post Dispatch reported that Missouri Gov. Mike Parson followed several other Republican governors Tuesday in announcing plans to exclude Missouri from federal pandemic unemployment aid — ending a $300-per-week boost and extra weeks of unemployment pay, and chopping all benefits for gig workers and the self-employed, starting June 12^th.

As you may know the Gov’t extended the unemployment benefits to Sept, but Parsons said that he thought the benefits were keeping people from looking for a job…  He’s probably right on that, for the most part, as thee would certainly be some unemployed people out there actively looking but not finding what they need… Because as I said about a year ago, some of those jobs aren’t coming back… And now we’re seeing that in living color… 

So, this will certainly cause some people some major problems… Just like when they also get the notice that they need to start paying rent or their mortgage payment again, and they look around to see if the Gov’t is handing out more fake cash, but…. Uh-Oh… There’s none to be had…  I feel for these people in this predicament, I don’t want to make it sound like I’m Mr. Freeze, with a cold heart to them… Just pointing out that there will be troubles ahead for the economy, and not all will be wine and roses going forward.

Today’s Data Cupboard will have the usual Thursday fare of weekly Initial Jobless Claims, which have really fallen in numbers in recent weeks… And again there will be a slew of Fed Head speakers out spreading lies… (My opinion)

To recap… Well inflation according to the BLS is soaring higher, to the tune of 4.2% in the past 12 months, or 3% less food and energy.  So, like I said above, as long as you don’t drive or use gas to heat your house or pool, and don’t eat, then you’re golden! Chuck thinks that the reason to buy dollars yesterday is hogwash, and the selling of the currencies and metals was all due to the PPT, protecting the dollar once again… here’s a memo for you dollar bugs… One of these days, your protection  isn’t going to be able to come to your aid, and then whatcha gonna do?

For What It’s Worth…  Since today’s edition of the Pfennig is all about inflation, I thought the FWIW article needed to be a good follow up, and I think I have one for you… Longtime well thought of and king of economists, James Grant, gives us his thoughts on inflation and the Fed’s ability to contain it…and it first appeared on Peter Shiff’s website… And it can be found here: Jim Grant: The Fed Can’t Control Inflation | ZeroHedge

Or, here’s your snippet: “In a recent talk, Jim Grant, investment guru and founder of Grant’s Interest Rate Observer, echoed Peter, saying the Fed can’t control inflation.

During a webcast sponsored by State Street SPDR ETFs, Grant said he thinks “there’s a gale of inflation of all kinds in progress,” adding that he believes it will take the Fed by surprise and “overwhelm our monetary masters.” Grant said, inflation is “clear and present and will manifest itself in our everyday lives.”

That sounds like the exact opposite of Powell’s “transitory” mantra.

Peter has said that once the Fed is forced to admit that inflation isn’t transitory, it will be too late to take action. Grant made a similar prediction, saying inflation will “catch the Fed flatfooted. In response it will “prevaricate” – meaning speak or act in an evasive way. In fact, that already seems to be the central bank’s strategy.

The question is can the Fed actually control inflation. Grant doesn’t think so.

I think the Fed is under the misconception that it controls events. Sometimes, events control the Fed, and I wouldn’t be surprised if this was one of those times. The Fed thinks that not only can it control events, but it can measure them. It believes it can pinpoint the rate of inflation.”

Grant believes that the economy can only tolerate 2.5% real rates. If that is breached, he thinks the Fed will have to resort to yield-curve control. If it does actually try to shrink its balance sheet and sell bonds, it will drive bond yields even higher. Fed bond-buying is the only thing propping up the bond market right now.”

Chuck again… Well, one of the many things that I learned from Frank Trotter was to listen to what Jim Grant says… And I always have… And Jim Grant is correct that the Fed only has so many arrows in its quiver to use for rate hikes, before all hell breaks loose in the financial system…

Market Prices 5/13/2021: American Style: A$ .7710,  kiwi .7158,  C$ .8248, euro 1.2070, sterling 1.4034, Swiss $1.1012, European Style: rand 14.1040, krone 8.3826, SEK 8.4354,  forint 295.69,  zloty 3.7640,  koruna 21.1848, RUB 74.32, yen 109.56, sing 1.3350, HKD 7.7672, INR 73.59, China 6.4444, peso 20.13, BRL 5.2454,  BBDXY 1,117.17,  Oil $64.43,    10-year 1.70%, Silver $26.90, Platinum $1,208.00, Palladium $2,902.00, Copper $4.74, and Gold… $1,814.10

That’s it for today… What a way to lose a game last night for my beloved Cardinals… strike out a guy with a 101 mph heater, and he reaches base because the catcher couldn’t handle the pitch… That runner came around to score the winning run…  UGH!  I was just looking over my picture board here that looks at me at my writing desk, and noticed that I have a slew of pictures of Alex, four of Andrew, and three of Dawn, a lot of Delaney, a couple of Everett and Braden, and the rest is hodge podge of pictures, with only one with little Evie. It’s a picture of me holding her when she was just hours old, and you can already tell I’m smitten with her! Don’t know why I went through that, but I did… Cat Stevens takes us to the finish line today with this song: Moonshadow… “I’m being followed by a moonshadow, moonshadow, moon shadow”…  Now, if you’re like me (heaven help you!) that song will be an earworm for you all day!  I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

May 12, 2021

* Currencies drifted on Tuesday… 

* Gold fights back on Tuesday to erase an intraday loss! 

Good Day… And a Wonderful Wednesday to you…  As the group Chicago sang many years ago, I’m feeling stronger every day….  The pain in my stomach from the pulled muscle, is not as sharp of a pain, but still painful… I’ve got a ton of stuff to talk about today, so the markets will be playing second fiddle to all my thoughts today… That sure was a nice win for our Blues on Monday night, in L.A. after sleeping all day I had no problem staying up for that late game! My beloved Cardinals are in Milwaukee, to play the Brew Crew… And last night they won 6-1, with some 11th inning home runs… Crosby, Stills, & Nash greet me this morning with their love song: Suite: Judy Blue Eyes…

Well it was a real strange day on Tuesday in the currencies and metals…  At one point in the day, Gold was down $18 and I thought, “oh no, here we go again, another engineered takedown”, but then Gold’s fortunes turned around and the shiny metal ended the day up $1.90, to close at $1,838.90, and Silver fought through some short selling too, and wound up 36-cents on the day to close at $27.73.

The currencies kind of drifted on the day… there were some that lost a little ground and some that didn’t…  And that leads me to my first discussion of the day… Ok, after all my complaining about the Dollar Index yesterday, former colleague, Neil George, sent me a note and told me I should use the Bloomberg Dollar Index, which includes the Chinese renminbi/ yuan. I looked into it, and saw the weightings in the index, and saw the inclusion of renminbi, and also saw that euros make up 32% of the index, so not as much as the Dollar Index I currently use… So, from now on the Dollar Index I refer to will be the Bloomberg Dollar Index (BBDXY). It will take some time to get used to it, but over time I do believe it will give us a better illustration of what the dollar is doing on a trade weighted basis… 

So, the BBDXY ended the day yesterday at 1,119.20, after starting the day at 1114.14, so you can see that the currencies lost a little ground to the dollar yesterday. But just like the metals, the currencies were down by a larger amount early only to comeback strong at the end of the day. Hopefully that will be a harbinger for the overnight & today’s price action…

In the overnight markets…Well hope springs eternal I guess… But the dollar kept up the pressure on the currencies overnight, and the BBDXY rose to 1,120.33 in the overnight trading.  Gold is down $3 this morning, and Silver has lost 23-cents in the early trading.  I find these down figures for the metals to be something that could very easily be reversed, given that today we’ll see the color of the stupid CPI which even with all its hedonic adjustments, should show inflation rising, which should be a good thing for Gold & Silver. 

Well, recall last month when there was all the talk of a stock market collapse on a certain day, but the collapse never happened…  On Monday this week I had planned to talk about the newest call for a collapse but with me being sick didn’t help that discussion along…  Yes, Monday, May 10^th, was supposed to be the latest armegeddon day for the stock market… And while the Dow actually lost a percentage point or two, it certainly wasn’t a collapse…  So, to me these people are doing nothing but crying wolf… yes, the wolf exists, as everyone and their brother knows that the stock market is overvalued by lengths… So, the possibility of a stock market collapse is reality, but calling it on a certain day to happen? Well, eventually, it will happen, and they will be the ones that said, “I warned you”…   

Ok, so all this talk of a market collapse on Monday, must have gotten the folks at www.wallstreetonparade.com looking into the possibilities… And you won’t believe what their research showed, but don’t worry, I have it for you here…

“The data shows that just prior to the dot.com bust on December 31, 1999 that resulted in the Nasdaq stock market losing a stunning 78 percent of its value from peak to trough, the total stock market value was 1.77 times GDP.

At year-end 2007, prior to the greatest Wall Street collapse since the Great Depression, the total stock market value was 1.34 times GDP.

As of December 31, 2020, total stock market value represented 2.10 times U.S. GDP. Siblis Research further shows that as of March 31 of this year, total stock market value in the U.S. stands at a breathtaking $49.1 trillion. (That includes U.S. based public companies listed on the New York Stock Exchange, Nasdaq Stock Market or OTCQX U.S. Market.)

A $49.1 trillion stock market is larger than the combined GDP of the four largest industrialized nations (U.S., China, Japan and Germany) according to International Monetary Fund data.”

Chuck again… So… maybe the end is near, but again, it’s long overdue, but being able to say it’s going to bust a button on X day, is getting a little too much for me…

But what it does do for us is to remind us to update our stop losses…  These are very important in you retaining profits you have in stocks folks… Because when the bottom falls out getting your stock sold at your price will be quite difficult…

Deficit spending has been a bane of mine for as long as I can remember… I remember yelling at walls for Bush’s deficit spending, then Obama’s, then Trump’s, and now Biden’s…  I finds this all to be worthless spending on boondoggles, and bonuses… The misallocation of tax payer funds, has continued down a long path of good money chasing bad programs…  And to highlight what I’m talking about here’s longtime friend, and publishing guru, along with best selling author, Bill Bonner…

“And while the feds have been wasting resources for generations, the rate of loss has recently gone much higher than usual.

In the 1970s, Washington reliably frittered away about 27% of GDP. Now, it’s over 40%. That doesn’t count the trillions in private waste and malinvestment caused by the proliferation of regulations and edicts, not included as federal spending.

All together, directly and indirectly, half of U.S. GDP is probably misallocated… or misspent.”

Chuck again…  I find this all to very likely ruin, our future folks… Yours, mine, your kids and grandkids, my kids and grandkids, and I try to sit them down and talk to them about this stuff, and it all falls on deaf ears, like deer caught in headlights, but one day, when the lights go out, they’ll call me on the phone and ask me why I didn’t warn them….   

And finally…. Yesterday, I mentioned the article that will have episode 1 from Dennis Miller, will run tomorrow, and how we explore what it will be like when the dollar isn’t the reserve currency any longer…  And to that, another good friend of mine, Craig, sent me this link to an article on Kitcom.com, that talks about how Central Bank reserves around the world are seeing their dollar holdings drop… Here’s an excerpt from that article:

“The reach of the U.S. dollar as the global reserve currency is declining as central banks around the world reduce the share of U.S. dollar reserves, according to the International Monetary Fund (IMF).

“The share of U.S. dollar reserves held by central banks fell to 59 percent—its lowest level in 25 years—during the fourth quarter of 2020,” IMF cited its own Currency Composition of Official Foreign Exchange Reserves (COFER) survey.”

Chuck again… And in my opinion, we will continue to see the percentage drop even lower… As the currency printing continues, thus debasing the value of the current stock of dollars… When the drop in reserves comes to a crescendo…  We will probably wake up to find a digital currency had taken over our dollar balances at the bank…. 

The U.S. Data Cupboard yesterday showed that their were a record number of job openings in the U.S. The number was 8.1 Million… So, do the reverse math on that, and you get over 8 Million people not interested in working any longer, as long as the Gov’t keeps sending them stimmy checks, and tax credits for children, etc.

Today’s Data Cupboard will have the stupid CPI (consumer inflation) will print for April… Don’t expect this index to reflect the items I showed you yesterday that had increased…  That’s not what this index is geared to do… Instead it’s geared to lie to you… And tell you there is no inflation to be fearful of… I didn’t pay attention to any of the Fed head speakers yesterday, for I’ve been told enough lies to last a lifetime!

For What It’s Worth…  Ok, when this article first came to my attention, I blew it off because it was behind a paywall at the tellegrapch.uk.co website… But then Ed Steer came to my rescue with a snippet of his own of the article in his letter yesterday, and so unless you pay for a subscription to the Telegraph.Uk.co, this snippet will be it for this article by Ambrose Evans Pritchard…

Here’s your snippet: “The U.S. Federal Reserve and Treasury are repeating one of the most disturbing episodes of the 1940s and risk stoking a destructive inflationary boom, a leading monetary watchdog has warned.

The Center for Financial Stability (CFS) in New York says U.S. money supply data is flashing a red alert and that excess reserves in the banking sector threaten to set off an “explosion of lending” as the recovery accelerates.

The Fed is riding a tiger by the tail and may have great difficulty extricating itself from a torrid monetary experiment that is reaching its limits.

The CFS said its “divisia” measure of the broad M4 money supply rose 24 percent in March from a year earlier, and narrow its M1 variant rose 36.9 percent. “Those monetary growth rates are potentially alarming,” said Professor William Barnett, the institution’s director.

Barnett said de-facto collusion between the Fed and the Treasury is much like that of the 1940s, when the Fed served as a fiscal agent for Democratic administrations and mopped up the vast bond issuance needed to pay for the Second World War and its aftermath.

Inflation reached 17 percent by mid-1947 and creditors were gradually expropriated in what amounted to a stealth default stretched over several years.”

Chuck again… For all the work that Ed Steer puts into his letters each day, I salute him, and would recommend signing up for his letter to anyone! You can find him at www.edsteergoldsilver.com

Market Prices 5/12/2021: American Style: A$ .7806,  kiwi .7234,  C$ .8176, euro 1.2135, sterling 1.4137, Swiss $1.1068, European Style: rand 13.9938, krone 8.2641, SEK 8.3291,  forint 294.67,  zloty 3.7415,  koruna 21.0396, RUB 74.12, yen 108.75, sing 1.3283, HKD 7.7661, INR 73.45, China 6.4146, peso 19.97, BRL 5.2256,  Dollar Index 1,120.33, Oil $65.54,  10-year 1.61%, Silver $27.50, Platinum $1,243.00, Palladium $3,000.00,  Copper $4.83, and Gold… $1,835.90

That’s it for today…  Thanks again for all that sent along get well wishes… I haven’t had a cold like this in many years, and with today being the 9^th day of the cold, means that it’s just about to give up haunting me… And I’ll say good riddance! What a strange game last night for my beloved Cardinals. The Cardinals hitters couldn’t find their way out of the infield for 10 innings, and then in the 11th inning they exploded for 5 runs! Good thing the Cardinals pitching was up to the task…  What’s up with the cool temps here in the Midwest?  We won’t see 70 degrees this week, and we’re in the 2nd week of May!  I had requested that we turn the heat back on in the house, as I sit here each day with a hoodie on, and wrapped in a heavy blanket! But as usual my requests fell on deaf ears… And so I await warmer weather to return to the Midwest…  Linda Ronstadt takes us to the finish line with one of the saddest songs ever: Long, Long Time…  So sad… Well, I hope you have a Wonderful Wednesday, and will Be Good To Yourself! 

Chuck Butler