Author: admin

May 10, 2021

Good day…. And a Marvelous Monday to you… This will be the shortest Pfennig on record, as I almost didn’t answer the bell this morning… My cold took a turn for the worse, and I pulled a muscle in my stomach during one of my coughing spells… I can’t breathe without major pain right now… So, sleep and rest is my best bet to healing, and so, with that I’ll talk about the jobs number on Friday, and how it really sent the currencies and metals higher on the day, and that’s it… Sorry, but discretion is being the better part of valor for me today… The Easybeats greet me this morning with a song that usually gets my motor going, but not today, as they sing their song: Friday On My Mind…

Well, so much for those so-called experts that called for 1 Million new jobs in April, eh? The BLS jobs jamboree on last Friday showed that only 266,000 jobs were created…  Now you know me, and how I like to sarcastic, but isn’t 266,000 just a but shy of 1 Million?  C’mon Chuck don’t make yourself giddy or laugh this morning that hurts too much!  The Unemployment Rate rose to 6.1% and all the spin doctors were out to try to make it all sound as if it didn’t happen…

But it did… The Currencies rallied all day on Friday, never looking back, and the Dollar Index closed the week at 90.24…. It had started the week on 5/3 at 91.19… So, not a good week for the dollar… The euro climbed to 1.2158… And all the other currencies followed the euro’s lead.

Gold & Silver had quite the day on Friday too, although, Gold could have ended the day higher, if it weren’t for the short trades that were entered late Friday afternoon… Gold closed the week up $16, and a price of $1,831.70… Silver also saw short trades late Friday afternoon, to limit its rise to only 15-cents, to close the week at $27.54

I’ll just add this.. Gold moved strongly above the $1,800 level which had been a line in the sand for the price manipulators… Now, Gold’s mission should it decide to accept it, is to remain above $1,800 and add to its current level…

I’ll try to have more for you tomorrow…  At least you know that my leeriness with the call for 1 Million jobs created for April, came around to being correct, and things went haywire for the dollar since…

I don’t even want to do a currency roundup today, so I’ll leave you with this…

I hope your Mother’s Day was grand… I was supposed to smoke a whole slew of pork steaks for the Mother’s Day crowd here, but… I just bagged it, couldn’t get going…  I stayed in the basement all day nd kept little Evie away from me, which was so difficult to do, for she was dressed so cute! So, you dear readers aren’t the only ones I’ve bagged!

Be Good To Yourself

Chuck Butler

May 6, 2021

* Currencies & metals rally in the overnight markets

* Sam Zell finally bellies up to the Gold window… 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well… This is going to be a short one today folks, I’m beat, draggin’ the line, and feeling like death warmed over…  I won’t opine too much because there was nothing going on yesterday in the currencies… And besides, I just don’t feel like putting my mind to work this morning… I’m sure I’ll be better on Monday morning, and I’ll make it up to you then. Eddie Money greets me this morning with his song: Shakin’…

OK, as I just said, the currencies traded in a very tight range yesterday. The Dollar Index opened the day at 91.30, and ended the day at 91.26…  So, as you can see, little to no movement…  The euro was trading 1.2010 nearly all day and most of last night. I know, because I was wide awake at 1 in the morning, so I checked the markets and didn’t see any movement, so I tried to go back to sleep again…

Gold found a few bids yesterday, and gained $7.60 on the day to close at $1,787.60… Silver didn’t see any bids, and lost 4-cents on the day, to close at $26.56… There was really no new inflation news on the wires, and it sure seems that the only time traders and investors think about rising inflation is when they see new/fresh inflationary data… That begs the question… If you see inflationary data one day, why wouldn’t it still be inflationary the next day? Dolts… all of them, and I’m in no mood this morning for dolts!

In the overnight markets…. It was opposite from what happened overnight on Monday night into Tuesday… The dollar was sold overnight, and this morning the Dollar Index is down to 91.01 from 91.26 last night. And Gold is up $6.70, with Silver up 26-cents in the early trading today. Before we get all giddy about the move in Gold, let me remind you that it was about at this level ($1,793) that we saw the PPT come in and defend the dollar, pushing Gold back down away from $1,800….They could very well, come back to defend the dollar once again, and maybe they won’t… Only the Shadow knows… 

This came in from the good folks at GATA yesterday, as they reprinted a report from 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, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves survey.

Some analysts say this partly reflects the declining role of the dollar in the global economy in the face of competition from other currencies used by central banks for international transactions.”

Chuck again… Well I can see the leaders of China and Russia slapping each other on the back and saying atta boy! As I’ve chronicled here China and Russia started their plans to dedollarize a couple of years ago, and it’s beginning to take shape… Remember when I told you that these two countries would attempt to get other countries to dedollarize, and that one of the tools they might use is the threat of not invading them if they jumped on the bandwagon…  Now, I certainly don’t know if that’s even part of their plans, but I think it would behoove Russia & China to have that plan in their arsenal, because sometimes when you want something so badly to can taste it, it helps to have a plan to close the deal…  I’m just saying…

The price of Oil couldn’t keep the $66 handle it was trading at yesterday morning…  Sorry Oil contract holders, for deep sixing the price of Oil by highlighting it yesterday! UGH! But even with Oil price slipping back to a $65 handle, it’s still up by a large margin… Last year at this time Oil was trading at $25…  And there’s no inflation right? Yeah, and I’ve got a bridge to sell you!

Speaking of inflation or, in this case, not speaking of it… This came across on Reuters yesterday, “U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth.

OK… you’ve got Yellen, Powell, and take your pick of Fed heads, since none of them ever vote contra to what Powell votes… And you ‘ve got: The three Blind Mice… See how they run… or, better yet, you’ve got a case of: See no inflation, speak no inflation, hear no inflation… 

Just how stupid does Yellen think those of us in the America read stuff like that are? I take offense at what I perceive as her attempting to pull the wool over my eye… And that I’m too gullible to know that she’s pulling the wood over my eye!  Ever since Yellen tried to deep six the economy with the rate hikes ahead of the election, I’ve had no use whatsoever for her… period.

Man, I remember the day I pointed out why I thought she was raising rates, and management didn’t like it on iota…. They had me retract that statement the next day…  But those were in the dark ages for the Pfennig… 

The U.S. Data Cupboard  today will have the 1^st QTR Productivity data… We, as a country, finished off 2020 in the 4^th QTR with a negative -4.2% Productivity… So, I would expect this 1^st QTR to be far better than the 4^th QTR…  And it’s Thursday, so that means the Weekly Initial Jobless Claims will print this morning… 

Tomorrow is the April Jobs Jamboree… The so-called experts are calling for 1 Million jobs to have been created in April…  As I said yesterday, I’m from Missouri, I’ll have to be shown!

To recap… yesterday saw little to no movement in the currencies throughout the entire trading day, and while Gold found a couple of bids, Silver didn’t, and Chuck thinks that traders are dolts…  And in the overnight markets traders are back to selling dollars, with the currencies, and metals both pushing the envelope across the desk once again… Chuck points out that the last time Gold was trading $1,793, and looking like it was ready to breach $1,800, the PPT stepped in to defend the dollar… 

For What It’s Worth…  Well, first I saw this article highlighted in the 5 Minute Forecast yesterday, then I saw it in Ed Steer’s letter, and thought, if it’s good enough for Dave Gonigam, and Ed Steer, then it’s good enough for a FWIW article for me!  And so this is an article about worldly Investor Sam Zell, finally buying Gold, and it can be found here: Sam Zell Buys Gold To Hedge Against Surging Inflation, “Debasement” Of The Dollar | ZeroHedge

Or, here’s your snippet: “Fed Chairman Jerome Powell insisted once again last week that the inflationary pressures building up in America’s overheating economy would be “transitory” (though the central bank is keeping a close eye on prices in keeping with its mandate), but as Wall Street strategists warned their clients on Tuesday as U.S. equities tumbled, signs that the U.S. economy might be headed toward hyperinflation are getting harder and harder to ignore.

As investors brace for the prospect of a sustained downturn in equities, Sam Zell, the infamous Chicago real-estate investor and billionaire, told Bloomberg that he’s seeing signs of inflation everywhere he looks.

And as Treasury Secretary Janet Yellen hints that the Fed (which she once led) might be forced to hike rates sooner rather than later, threatening lofty equity valuations, Zell is resorting to an old-fashioned inflationary hedge that some investors claim has been rendered obsolete by bitcoin.

Many are questioning whether gold (which has been out of favor seemingly since the financial crisis) has become obsolete in the age of crypto, and Zell acknowledged that even he has mocked investors for believing in the yellow pet rock.

“Obviously one of the natural reactions is to buy gold…It feels very funny because I’ve spent my career talking about why would you want to own gold? It has no income, it costs to store. And yet, when you see the debasement of the currency, you say, what am I going to hold on to?”

Chuck again… Zell also said, “Inflation can be seen all over the place”…  That’s the same thing I’ve been saying now for months… Glad to see you jumping on my bandwagon, Sam!

Market prices 5/6/2021: American Style: A$ .7757,  kiwi .7215,  C$.8179, euro 1.2046, sterling 1.3935, Swiss $1.1003, European Style: rand 14.2548, krone 8.3316, SEK 8.4537, forint 297.41,  zloty 3.8074,  koruna 21.4285, RUB 74.76, yen 109.12, sing 1.3346, HKD 7.7683, INR 73.75, China 6.4726, peso 20.22, BRL 5.4079,  Dollar Index 91.91,  Oil $65.30,  10-year 1.57%, Silver $26.81, Platinum $1,241.00, Palladium $2,992.00, Copper $4.55, and Gold… $1,793.30

That’s it for today and this week… I don’t know if it was the losses by my beloved Cardinals and Blues last night or the nasty cold I have that put me into such a dour mood this morning! The Cardinals did split the double header, but once you win the first game, you should go all out to win the night cap! And I just didn’t see them going all-out… Back in the day, when I used to be the kid’s elementary school Santa Claus, I used to come down with a bad cold like this every December, after having 100’s of kids sit on my lap for a picture… And the only little kid to sit on my lap in the last week was little Evie, and I doubt she gave me this cold… I haven’t had a bad cold in years! I know that the old adage for this is feed a cold, starve a fever… So, maybe that’s what I’m doing wrong! I haven’t felt like eating this week! HA!   Ok, there’s a little life in me this morning…   Sunday is Mother’s Day… So a Happy Mother’s day to all the Moms out there! The band Live takes us to the finish line today with their song: All Over You… This was from their first album, which was a big seller.. Their second album, not so much….  I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow…  Now onto my Mother’s Day poem Tradition…

Mom…

Mom is such

A special word

The loveliest

I’ve ever heard

 

A Toast you,

Above all the rest

Mom, you’re so special

You are simply

The Best!

 

Chuck Butler

 

 

May 5, 2021

* Currencies & Metals wrapped a tourniquet around their bleeding… 

* Little to no movement in these markets this morning… 

Good Day… And a Wonderful Wednesday to you! It’s also Cinco de Mayo! More on that in the wrap up at the end of the letter today… Yesterday it was May the 4^th be with you, and today it’s Cinco de Mayo, and tomorrow it will just be May 6^th…  Oh well, just another day! But that’s tomorrow, we need to live for today! Because only today is promised to us… I, unfortunately, feel like death warmed over this morning, as my cold has taken a turn for the worst… Tommy Tutone greets me this morning with his song: 867-5309…  Sort of like 634-5709 the R&B song from the 60’s!

The currencies never rallied back yesterday, but did wrap a tourniquet around the bleeding they had suffered in the overnight markets the night before. The Dollar Index was trading at 91.30 yesterday morning, and closed at 91.26… So not much movement either way for the currencies. Gold never found a bid all day, and added to its early morning loss to end the day, down $13.20, and close at $1,780.70. Silver suffered the same selling that Gold did, and ended the day down 42-cents, to close at $25.58…

So, some more up one day, down the next for these two asset classes… You know, I’m not sure I ever told you this before in the Pfennig. I used to tell audiences this all the time… But during the dollar’s life as a fiat currency, circa 1971, it has seen 6 completed trends, alternating back and forth between weak dollar trend, and strong dollar trend. The point I’m going to make here is this… During the strong dollar trends, the dollar never recovered all that it had lost in the previous weak dollar trend… So, since 1971, the dollar’s overall direction is down… I used to show a chart of these trends to illustrate how the dollar never recovered all the ground it lost in the previous weak trend…

The reason this came to mind for me is that Gold & Silver have had their trends too… Commodity trends, of which there have been far too many through history to list them… But the great Jimmy Rogers noted in his book Hot Commodities that throughout history, when Commodities began a boom trend, the trend lasted between 17-20 years…  So, while that history might not play out in today’s world of trading, it does give us some idea of how long a strong commodity trend can last…  And just like with the dollar, Gold & Silver saw it’s last completed boom trend, end in 2011 after reaching $1,900, and then never lost all of its gains in the ensuing weak commodity trend…

In addition, regarding Gold & Silver…  The prices stated on line or in the paper for these two metals are the paper prices… They do not reflect the price of buying physical coins and bars… For instance, a dear reader sent me a note yesterday, and told me his local Gold dealer quoted him a price of $2,100 for a 1 oz. Gold coin, and when the buyer questioned the price, the dealer then explained to him that there’s a paper price, and a “real price” for Gold & Silver…

Speaking of silver, there was an article on Bloomberg.com about how the solar panel industry has put in orders for more physical Silver than every before!  I’m telling you this now, so maybe you’ll listen to me later, but not too much later because by then it could be too late baby now, it’s too late… there’s a shortage of Silver out there and demand for physical is high… Let’s see… supply is weak, and demand is strong… seems like a good recipe for a bull market doesn’t it?

In the overnight markets… there’s been little movement in both the currencies and metals… The Dollar Index is back to 91.30 this morning, so not much movement at all… The biggest mover in price is the price of Oil… Oil is trading with a $66 handle this morning.. Oil traders are buying into the thought that the U.S. economy is going to go gangbusters this summer, and people will be driving all over God’s green earth… 

I tend to think that’s getting overly optimistic but I’m not going to step out in from of the moving bus that represents the price of Oil right now… 

OK… I still looked and looked for a reason for the selloff on Monday night into Tuesday, and there was nary a word written about it, so like I said yesterday, we’ll just have to go with some profit taking was the cause…

Alrighty then… I was reading Dave Gonigam’s 5 Minute Forecast yesterday when I came across this little ditty that he reported, “U.S. military planners are preparing for the likelihood of Beijing reuniting with Taiwan by force — “in the next six years,” according to Adm. Phil Davidson, commander of U.S. forces in the Indo-Pacific.”  I couldn’t stop thinking about all the horrible things that could happen if the U.S. decides to back Taiwan…  The losses of ships, planes, jets, soldiers, and innocent civilians would be egregious, and that would before the war escalated to nuclear devastation…  I’m no yellowbelly when it comes to defending our country, but somebody else’s country? Didn’t we learn our lesson in Vietnam?

But starting a war of any kind, would be a way to get people’s minds off the problems at home, right? The dollar is losing value by the boatload, start a war… People are taking to the streets to protest food prices, start a war…   I have shivers going down my spine right now thinking about this stuff, so I’m going to stop right there….

I’m sorry I went down that rabbit hole folks… But people need to be aware of potential problems right?

The U.S. Data Cupboard yesterday had March prints of Factory Orders, and the Trade Deficit… Factory Orders for March did recover from Feb.’s -0.5%, and printed a 1.1% gain, but that gain didn’t meet expectations of 1.3%, so the print was more of a meh…. And the March Trade Deficit came in much larger than Feb’s $70.5 Billion… The March print was $74.4 Billion…  Signaling that the dollar is still too strong for foreigners to buy our goods…

Today’s Cupboard has the ADP Employment Report, and the forecast here is for 800,000 jobs to have been created in April… Well, I’m from Missouri, and I’ll have to be shown that! And since the letter is so late today, I’ve been shown and 800,000 jobs was not what printed! 742,000 jobs were created in April according the folks at ADP…  And 742,000 is still a whopping number.. But remember last April? 20.5 Million people were out of jobs…  Just putting today’s report in perspective… 

To recap… The currencies tried all day on Tuesday to recover the losses they incurred in the overnight markets the previous night, but the best they could do was to wrap a tourniquet around the bleeding and end the day pretty flat… Gold & Silver never found a bid on Tuesday, and suffered further losses as the day went on… You know, I tend to think that any time there’s profit taking in these two asset classes of currencies and metals, the price manipulators use that as a great way to show up at the COMEX with arms full of short paper trades…  Chuck goes down a rabbit hole that you might want to have missed!

For What It’s Worth…  OK, you won’t believe this one…  But you had better sit down, and put away any sharp objects before reading… Ok, back now? Here we go… Late last month, hundreds of people across Southern California woke up to a nightmare: their private security-deposit boxes had been raided by federal law enforcement.  Wait! What? Is that even legally possible you might be asking? Well, the article can be found here: https://www.ocregister.com/2021/04/22/the-fbi-cant-seize-first-and-ask-questions-later/

Or, here’s your snippet: “Late last month, hundreds of people across Southern California woke up to a nightmare: their private security-deposit boxes had been raided by federal law enforcement. Customers of U.S. Private Vaults learned the FBI raided the Beverly Hills company after an indictment for federal crimes. More to their horror, those customers learned their precious valuables were being held at an undisclosed location and that they would need to identify themselves to the FBI to reclaim their property.

Those customers must have been gobsmacked. The governments allegations were against U.S. Private Vaults, not them.  The indictment didn’t allege that U.S. Private Vaults customers had done anything wrong.  And many customers who found U.S. Private Vaults (often through Google) liked the company because renters could keep the keys to their security boxes. U.S . Private Vaults also boasted of faster in-and-out times and better hours than banks, as well as larger security boxes and included insurance. It was even a member of the Beverly Hills Chamber of Commerce!  So, many innocent people who wanted security and privacy for their most valued possessions found it at U.S. Private Vaults.

But to listen to the feds, every one of the companys customers is a potential criminal. The indictment points out that U.S. Private Vaults advertised the anonymity of its services, including the fact it wouldnt force customers to divulge personal information. To the government, any individuals who may want anonymity cannot be law-abiding citizens.

So its little surprise that the government broke into every deposit box at U.S. Private Vaults, emptied them, and took all their contents. Now the FBI refuses to return any customers stuff until he or she comes forward, identifies him or herself as the boxs owner, and submits t o an FBI investigation. In other words, people must prove their own innocence to secure their properties return.

The feds have created a privacy nightmare that demands the courts immediate involvement. The Fourth Amendment guarantees that the people will be secure against unreasonable searches and seizures. Here the government seized the property of hundreds of people, not because the feds had any evidence those people did anything wrong, but because they rented from a business the government doesn’t like.

The Constitution does not abide guilt by association. The government can seize a customers property if it submits evidence linking that customers specific property to a crime. But what the government has done here is completely backwards. The government cannot search every apartment in a building because the landlord is involved in a crime. After all, that apartment is theirs.”

Chuck Again… Man, this really burns my you know what! Civil Liberties, are being taken away from us left and right, and where’s the media reporting the crime of all this?  I shake my head at what we, the People have allowed to be taken from us…

Market Prices 5/5/2021: American Style: A$ .7741,  kiwi .7200,  C$ .8147, euro 1.2010, sterling 1.3907, Swiss $1.0961, European Style: rand 14.3691, krone 8.3368, SEK 8.4894,  forint 298.88,  zloty 3.8067,   koruna 21.4858, RUB 74.95, yen 109.16, sing 1.3351, HKD 7.7692, INR 73.92, China 6.4728, peso 20.16, BRL 5.4391,  Dollar Index 91.30,  Oil $66.25,   10-year 1.59%, Silver $26.53, Platinum $1,233.00, Palladium $3,038.00,  Copper $4.51, and Gold… $1,782.60

That’s it for today… Ok, here’s my traditional Pfennig Cinco de Mayo story…  In 1998, we traveled to Cancun… And walking through a shopping area, there was a guitar player with his sound system playing music… he began to play a song that I knew, and had a microphone plugged into the sound system, so I picked it up and began singing Dust In The Wind… Soon there were tons of people crowded around us…  Ok, so many years ago I first told this story in the Pfennig, on the 5^th of May, and a reader responded calling me a MAK… We laughed so loudly and long on the trading desk, that I promised that I would repeat the story every year on the 5^th of May…  I doubt that I would even think of grabbing a mic and start singing on the streets these days…  Cardinals & Mets were rained out last night, so as the great Ernie Banks used to say, “Let’s play two”!   I also remember, as a young man, going to double headers, with my cooler, and sitting the bleachers for 5 hours! Those were the days, my friend… those were the days… The Outlaws take us to the finish line today, with their long, and rocking song: Green Grass & Hide Tides…  I hope you have a Wonderful Wednesday, a safe Cinco de Mayo, and will Be Good To Yourself! 

Chuck Butler

 

May 4, 2021

* Currencies & metals rally on Monday… 

* But give back most of their gains in the overnight markets… 

Good Day… and a Tom Terrific Tuesday to you! And May The Fourth Be With You! HA!  tried to sit outside yesterday afternoon, to allow the warm sun to dry me up from all the congestion in my sinuses… That worked as long as I remained in the sun, once I came inside…. I had to begin sucking on cough drops immediately!  I watched the baseball game of which, the Cardinals, won 6-5 on the TV and the hockey game, which the Blues won 2-1, on my iPad.   Yesterday, I told you I was going back to sleep, and I did, until 10:30 am… WOW! Sleeping the day away… But I always say, my body tells me when I need to sleep, and I don’t argue with it! You know, that is one thing that I’ve learned since I was diagnosed with Stage 4 cancer in June 2007, and that is… To listen to my body… I know when I need to back off something, etc. Midnight Oil greets me this morning with their song: Beds Are Burning…

Well, before I go on with anything else this morning, I have a quote from Charles Gave, from the John Mauldin letter that I think everyone needs to read and take to heart… here we go! “The idea that maintaining abnormally low interest  rates helps economic growth is a fallacy, says Gavekal co-founder Charles Gave. It mainly helps the rich get richer while depressing  working-class living standards. Such policies historically don’t end  well, yet the Federal Reserve and other central banks are pursuing them enthusiastically.”

Ok… so who’s in on keeping interest rates near zero? Just wondering…

So, I told you yesterday that the all clear horn had sounded and that the Big Bad Wolf had gone away, giving traders the freedom to sell dollars once again… And sell them they did! Gold had a phenomenal day rising $23.80, to close at  $1,793.90. And the Dollar Index reflected the dollar selling by falling to 90.94 at the close, from 91.28 at the close on Friday…  The currencies got back on the rally tracks, and took Gold & Silver along for the ride… Silver had an even better day than Gold, rising 98-cents! That’s a 3.60% gain on the day, to close at $27.00 WOW!  

I guess those wage numbers that I reported to you yesterday, showing wages increasing  1.0% in the 1^st QTR and 2.7% year on year, scared the bejeebers out of a few traders, eh? With those increased inflation fears running wild, you might think that the U.S. Treasury 10-year’s yield would have risen… But you would be wrong… Remember the Cartel implemented their Yield Curve Control (YCC) and they aren’t about to let yields rise to combat the inflation they’ve been starved for!

In the overnight markets… Apparently, the overnight markets didn’t see things quite the same way as their U.S. partners last night… The dollar has rallied back and the Dollar Index sits at 91.30 this morning, up from the 91.94 it closed yesterday. Gold has given back $11 of its gains from yesterday, and Silver has given back 16-cents of its gains to, trade back below $27….  I’ve searched the hillside up and down and can’t find anything that tells me why this reversal went on last night… So, it appears to me that it was some quick profit taking… 

Ok, the GATA folks sent me a note yesterday notifying me that the State of Arkansas has now eliminated the sales tax on previous metals…  Well, that’s another state to do this, and I don’t believe it will be the last to eliminate sales tax on precious metals! Here’s some further news on this story…

“Backed by the Sound Money Defense League, Money Metals Exchange, and grassroots activists and coin dealers in Arkansas, Senate Bill 336 will allow Arkansas investors, savers, and small businesses to acq uire precious metals without being slapped with sales and use taxes.

The Arkansas sales tax exemption takes effect on July 1.

Meanwhile, similar bills are pending in Ohio, Maine, Tennessee, and New Jersey as the national backlash against taxing constitutional money continues.”

Chuck again… Just keep peeling back the layers of resistance that individuals have against owning Gold & Silver… 

OK… Well I think we’re going to have to root for a Turn Around Tuesday today, because things are looking like there’s some profit taking going on after yesterday’s big run up. In the currencies & metals.

Yesterday I talked briefly about the supply chain strains.. These are real folks, and from where I sit, in the cheap seats, there are still no signs of the strains ebbing. There are still delays and bottlenecks basically everywhere you look across supply chains. And the micro chips for Cars is just one of the things that have been affected…  I find this to be somewhat embarrassing for the U.S. in that, these are cars made here in the U.S., but they need chips from China or wherever?  Serves us right for not circling the wagons on the production of cars… 

I’m doing a fun (for me) interview with good friend Dennis Miller for his letter… In it, I was asked to describe what it would look like in 5 years if the dollar lost its reserve currency status…  Well, since I WAS the first to talk about this scenario back in 2010, at the Orlando Money Show, I should know a think or two about what things will look like….  Spoiler alert… They aren’t pretty!

The FWIW article today is a snippet from Dennis’ letter last week… When reading the letter, I kept thinking to myself, that the U.S. house of cards, financial system is just waiting for something to topple it… I don’t know what it is, could be a default, could be a bank problem, could be a whole list of things that would topple the house of cards…  And I think it’s important that investors keep that in the back of their minds.. Make sure your stop losses are updated, keep abreast of the news, and watch for signs of decay… 

The U.S. Data Cupboard yesterday had the April ISM (manufacturing index), and it surprised, even me with its weakness. The April ISM fell from 65 to 60, and while 60 is still easily above the line in the sand that determines expansion or contraction (50), it didn’t have a good month in April… Does that tell us that the stimmy check euphoria of March was all over by April?  It could very well be telling us that… I’m just saying… 

Today’s Cupboard offerings include March Factory Orders, which in Feb were negative -0.8%… They are expected to get back on the positive side of the equation during the go-go days of March..  Circling back to yesterday, the total vehicle sales were supposed to print, and didn’t… Makes you wonder if the number is so bad, that they are afraid to print it, doesn’t it? 

To recap…  The currencies & metals had great days on Monday, erasing the memory of pain from late last week… But in the overnight markets, traders there didn’t have the same opinion of what to do with dollars, and both asset classes are giving back big chunks of their gains yesterday… Chuck tells us that Arkansas has eliminated sales tax from previous metals sales… And we talk about supply chain strains… They’re real folks… 

Before I head to the Big Finish today, I have something I want to get off my chest… And that is the naysayers to inflation… I just don’t get what they aren’t seeing… Rising inflation is as evident as a man with a hatchet in his forehead! Shoot Rudy, even that wily codger, Warren Buffet is seeing rising inflation, let’s listen to him, “We are seeing substantial inflation,” Buffett said at the Berkshire Hathaway annual shareholder meeting broadcast exclusively by Yahoo Finance. “We are raising prices. People are raising prices to us, and it’s being accepted.” 

I find it difficult to argue with him here… and still there are naysayers… Hmmm….  And while I write, the price of Oil is rising to trade with a $65 handle…. Oh well, you can lead a horse to water, right? 

For What It’s Worth…  Last week, Dennis Miller’s On The Money, letter was a question about how long can this house of cards last?  And I like it so much that I put it on the docket for a FWIW article, and so here we are! This article is long, so I won’t be able to do it full justice with my snippet, so I’ll depend on you to click on the link found here : How Long Can This House Of Cards Last? What Can We Do? – Miller on the Money

Or, here’s your snippet: “If we constantly borrowed and spent more than we earn while debts piled up; our house of cards will eventually collapse.

Over a decade ago, P.J. O’Rourke warned:

“Alarm bells should be ringing very loudly as the United States contemplates a deficit for 2010 of more than $1.5 trillion – about 11% of GDP….

…. Empires behave like all complex adaptive systems. They function in apparent equilibrium for some unknowable period. And then, quite abruptly, they collapse.”

The 2010 numbers now look tame. The Committee for a responsible Federal Budget predicts:

“In light of the enactment of the year-end spending and COVID relief deal, we estimate the deficit will total $2.3 trillion for Fiscal Year (FY) 2021. …. It would be higher than any other time in recorded history outside of World War I.”

The Wall Street Journal reports:

“The federal debt is projected to almost double to 202% of gross domestic product by 2051….”

Dr. Lacy hunt believes the historic debt levels cause economic activity and the standard of living to decline.

Governments worldwide believe they have a Magic Money Tree spending money they don’t have.”

Chuck again… if you don’t already subscribe to Dennis’ letter, I urge you to go to www.milleronthemoney.com and sign up today!

Market Prices 5/4/2001: American Style: A$ .7717,  kiwi .7136,  C$ .8117, euro 1.2013, sterling 1.3884, Swiss $1.0931, European Style: rand 14.4526, krone 8.3248, SEK 8.4607,  forint 299.65,  zloty 3.7898,   koruna 21.5039, RUB 75.15, yen 109.40, sing 1.3353, HKD 7.7673, INR 74.05, China 6.4727, peso 20.20, BRL 5.4285,  Dollar Index 91.30,  Oil $65.65,  10-year 1.62%, Silver $26.84, Platinum $1,245.00, Palladium $3,064.00, Copper $4.53, and Gold… $1,782.80

That’s it for today… It was a good night for both the Blues and Cardinals last night, as they both won very tight games… Unless the wheels fall off for the Blues, they appear to be in the driver’s seat for the last playoff spot in the Western Div. But there’s still 6 games in the regular season to go, so stranger things have happened to the Blues… they just need to keep winning! And get hot going into the playoffs…  I’ve been having a lot of trouble with the shell on my prosthetic eye… So, I’ll go see the doctor that made the shell, and she’ll probably need to make me a new one… She asked me on the phone if I had lost weight… so, my socket could have changed… The appt. is not for a few weeks, so I have to put up with this shell that keeps giving me fits until then! Well, sitting out in the sun yesterday did help my sinuses, but as the night went on, they began to give me fits again… More sun today, please! May the 4^th be with you today… I love that phrase!  Tomorrow is Cinco de Mayo, of which we used to go out and party for… But not any longer, as we’ve become old stick-in-the-muds… I’ll share my annual 5^th of May, story with you tomorrow… The Searchers take us to the finish line with their hit song: Love Potion #9…  “I took my troubles down to madam Rue, you know that gypsy with the gold capped tooth.”…  That song always reminds me of fun times back in the 60’s… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

May 3, 2021

* Currencies & metals attempt to rally back this week… 

* Former Mint Director, says there’s a shortage of metals… 

Good Day… And a Marvelous Monday to you! And Welcome to May! Hopefully the crazy weather of April will have given up the ghost, and May will be more certain…  Pfennig tradition calls for me to repeat this little gag… If April Showers bring May flowers, what do May flowers bring?   The answer… Pilgrims! HA! Well, my internet and tv problems got all straightened out on Friday, so I’m a happy camper. My internet speed is now up to snuff with most of the world! Not that you clicked on this email to read about my internet speed!  I’ve come down with a cold… strange, I know… At first I thought it was just allergies, but I know the difference… Maybe too much tub thumpin’ on Friday? Oh, well, the Guess Who greet me this morning with their song: No Sugar Tonight/ New Mother Nature… There’s that Burton Cummings again!

So, when I left you on Thursday last week, the currencies were kicking some dollar tail, and taking names later, and Gold & Silver were seeing some slippage VS the dollar, but the main theme was that the dollar was getting sold, and currencies like the euro, sterling, franc, A$, and kiwi were all beneficiaries of this dollar weakness…  Now, wasn’t it just last week that I talked about how the last time the euro went above 1.21 that the Plunge Protection Team (PPT) came in, bought dollars and put resuscitation paddles on the dollar… Rampart, clear… zap! The dollar was back to being bought again, as all traders cowered to the PPT…

Well, They were doing it again last Friday… Gold got whacked again, the euro got pushed back below 1.21, and all the euphoria in the currencies had the wind taken out it, and now we’re left with the remains, and they sure look messy…  The PPT made sure there were no survivors.. Gold lost $9.50 after valiantly battling back all day, and Silver lost $8-cents.. Gold closed on Thursday at $1,772.00, and Silver at $26.10

Then on Friday, the boys in the band were back at it, pushing on Gold all day once again, but Gold resisted, and only lost $2.90 to close the week at $1,769.10. Silver didn’t battle as valiantly as Gold and lost 19-cents on Friday to close the week at $25.91

Trying to save the dollar… That’s all this was about folks… Sort of like getting a vote of confidence from the General Manager…  The field manager knows all too well that his time is short… And I would think that dollar bugs have to feel that way too… But as long as they have the PPT to keep things from getting out of hand… they’ll have some misguided confidence… 

Ok, I found this article on Kitco.com this morning, and thought it to be very important to my dear readers…  Read these next few paragraphs with all the seriousness you can muster up, because it deserves to be read that way…  take it away, Kitco! 

“A global shortage of physical gold and silver products has created a premium on coins and bars, and this premium is causing a disconnect between the spot price and the “true” price that retail investors need to pay, said Ed Moy, former director of the U.S. Mint.

Moy, who was the director of the U.S. Mint between 2006 and 2011, cites the inability of the mints around the world to keep up with physical coin and bar demand as a reason for this shortage.

“Not only the U.S. Mint, but other Mints around the world, Australia’s Perth Mint, the Mexican Mint, have all run out of gold, they can’t keep it in spot and there’s so many shortages retailers are having problems accessing that gold,” Moy told Michelle Makori, Kitco’s editor-in-chief.

Premiums on these physical gold and silver products can run as high as 20% in some places, Moy said.

“If you go to any of the top retailers for gold bullion and take a look at what they’re charging for an ounce American Eagle gold bullion coin, even though the spot price right now is $1,775 give or take, you’re hard pressed to find a ounce gold coin for anything less than $2,000, and I’ve seen it as high as $2,100,” he said.

One of the main reasons for why the spot prices have not caught up to gold and silver’s premium-adjusted price is that the overall markets are flooded with bullion derivatives, Moy said, but it’s only a matter of time before the short contracts keeping the price down expire.”

Chuck again… You know me folks, I’ve been writing about a shortage of metals for years, and now this article confirms what I’ve been saying? Well, it doesn’t get any better than that for me!  But what this article doesn’t really come out and say is that Gold & Silver will take for the moon when everybody, and I mean everybody demands delivery of the metals on the futures contracts they hold…  once again I ask… Got Gold? 

Well, did you see the Personal Income & Spending data from Friday?  Personal Income was up a whopping 21.1% in March, VS the negative -7.0% in Feb… Ok… didn’t everyone get their stimmy checks in March? So, what’s the hub-bub? This should have been expected…

One thing that wasn’t expected was the rise in wages… Ahhh grasshopper we’ve been waiting for this for years, is it finally happening? Well, let’s see… According to the data, U.S wages increased 1% in the 1^st QTR, and also saw a 2.7% increase Year on year…  Now, I have to wonder if all those inflation naysayers are rethinking their position? Inflation is running as hot as a firecracker, are you ready for it? Or, have you fallen victim, or drank the Kool-Aid of those that keep saying there is no inflation?  Well, there’s only one thing to ask…. Got Gold?

Now as far as spending… That was up 4.3% in March, VS the negative -1% in Feb… So, contrary to what I thought most people did with their stimmy checks, thy stimmy checks got spent on NFT’s, dogecoin, and other insane investments… That 4.3% increase in spending will be interesting to see if it can be repeated in April… I doubt it, but maybe pigs do fly?

I don’t mean to make this a day of nothing but data stuff, but it appears that’s what it’s going to be… Last week also saw the final revision of 1^st QTR GDP and it was revised upward to 6.4% from the previous revision of 4.3%… The propeller heads had to include the stimmy checks affect on GDP… Well, unless the Gov’t is ready to send out quarterly stimmy checks then the next QTR’s GDP won’t be as exciting as the 1^st QTR…  I hate to be the bearer of bad news… But this euphoria over how well the economy is doing is like listening to two insane people talk about how the Mars helicopter works…

You know, you must keep in mind that inflation is like a currency’s kryptonite… So, to me, the PPT was just reducing the base levels of the currencies before they take off to higher ground in response to the raging inflation in the U.S.  

In the overnight markets… The currencies are attempting a comeback, and Gold & Silver are both moving up this morning with Gold up $6.60 and Silver up 18-cents.  The all clear horn has sounded, and now traders can get back to selling dollars, now that they know that the Big Bad Wolf, has gone…  Speaking of the Big Bad Wolf… I saw a cartoon the other day , that 4 squares, in the first square a little piggy built a house of dollars, in the next square a little piggy built a house of euros, and in the 3rd square the little piggy built a house of Gold… In the forth square, the house of dollars and euros were getting blown away, while the house of Gold stood solid, and a caption that read: We all know how this story ends… 

The U.S. Data Cupboard this week will be sporadic with economic prints… Today it will be the ISM for April, which will be strong, because that’s what happens when people get piles of money, and spend it, manufacturers gear up!   There is one piece of data today that should be interesting, and that is the vehicle sales for April… From what I’ve read… There are thousands of cars sitting on lots that can’t be sold, because they are awaiting a micro chip for their system…  Supply chain disruptions, who’d thunk that?  This will be a Jobs jamboree Friday week… 

To recap… The currencies & Metals saw a ton of dollar buying to end the week last week, the PPT was in protecting the dollar, and traders cowered to the all-mighty PPT…  The Dollar Index was trading at 90.57 last Thursday morning, and when the week ended on Friday, the Index was trading at 91.28…  In the overnight markets the currencies and metals are attempting to rally and comeback.. 

For What It’s Worth…  OK, this is really good, folks… I received this letter from the GATA folks, where Chris Marcus of Acadia Investments, as the current CFTC Chairman about his comments regarding the price suppression of Silver… There’s a YOUTUBE of this whole thing of which he is referring to and it can be found here: https://www.youtube.com/watch?v=HSS3zkWYhaY&t=763s

Or, here’s your snippet: “In an open letter to the acting chairman of the U.S. Commodity Futures Trading Commission, Rostin Behnam, published tonight, Chris Marcus of Arcadia Economics asks for an explanation of a comment Behnam made on March 18 that seemed to applaud and implicate the commission in the suppression of silver futures prices.

— you made the following statement: ‘The resiliency and the market structure of the futures market was able to tamp down what could have been a much worse situation in the silver market.

Also at the conference Behnam appears to have congratulated the commission “for utilizing its authority and some of the tools it has within the margin space to control the price and volatility of the silver contracts.”

Marcus also asks Behnam to explain an assertion made on CNBC in February by the research chief for the Goldman Sachs commodities desk, Jeff Currie, who, in regard to silver, said: “The shorts are the ETFs [exchange-traded funds]. The ETFs buy the physical, they turn around and they sell on the Comex to be able to hedge that physical position like any other corporate”:

But if silver ETFs are just accumulations of metal held for the benefit of their investors so their investment can track the silver price, why do the ETFs need to hedge against the metal’s price?

If silver ETFs are hedging their own silver, they are nullifying its potential for price appreciation and essentially rigging the market surreptitiously against their own investors.

The use of gold and silver ETFs to short the monetary metals markets for price suppression at strategic moments long has been suspected by many in the GATA camp.

Marcus’ letter itemizes much more evidence of improprieties in the silver market, but some of them would be explained by manipulative trading undertaken by, at the behest of, or with the approval of the U.S. government if such trading is legal and outside the commission’s jurisdiction.”

Chuck again… Well, this letter to the CFTC chairman for explanation of his comments regarding Silver will probably be wadded up and tossed into the circular basket, by the Chairman… You know, it would be really cool if a Senator or someone like that called the Chairman on the phone, and said, “you need to answer that letter, and do so truthfully”…   And then pigs might fly….

Market Prices  5/3/2021: American Style: A$ .7728,  kiwi .7165,  C$ .8133, euro 1.2048, sterling 1.3858, Swiss $1.0955, European Style: rand 14.4378, krone 8.3003, SEK 8.4385,  forint 298.90,  zloty 3.7815,   koruna 21.4144, RUB 75.21, yen 109.62, sing 1.3317, HKD 7.7676, INR 74.26, China 6.4735, peso 20.26, BRL 5.4361,  Dollar Index 91.19,  Oil $63.80,   10-year 1.62%, Silver $26.19, Platinum $1,202.00, Palladium $3,014.00, Copper $4.47, and Gold… $1,776.70

That’s it for today… except…. Today is the birthday of my good friend, Toni Moody! She’s one of those people that make it a Birthday Month… So Happy Birthday Month, Toni! Well, my beloved Cardinals swept the Pirates this past weekend, and come home to play the pond scum… Just kidding, they’ll be playing the Mets, who used to be BIG rivals with the Cardinals in the mid-to-late 80’s… For a few years it was either the Cardinals or the Mets who won the division… But then the MLB realigned divisions, and now we see the Mets 6 or 7 games a year… and none since 2019!  The weather people will be diligently at work this week, keeping people abreast of the rain conditions for those going to games… Next Sunday is Mother’s Day… So you have a few days to figure out what your mother would like… I used to buy my mom a dozen roses, for she loved flowers, and loved the aromas of fresh cut flowers… My mom and I had a special relationship, she supported me in any endeavor I undertook… I’ll always be indebted to her, for giving me the freedom to make my own decisions…  I miss you mom… You many notice the letter arrived in your mail box a little earlier than usual today… I was up at 3:30 coughing my fool head off, and decided to write and go back to sleep later…  And with that… The Ides of March take us to the finish line today with their song: Vehicle…  “I’m the friendly stranger in the black sedan won’t you hop inside my car”…  I hope you have a Marvelous Monday, and will continue to Be Good To Yourself!

Chuck Butler

April 29, 2021

* Powell leaves traders nothing concrete to trade on

* The price of Oil jumps higher! 

Good Day… And a Tub Thumpin’ Thursday to you! I really feel like going out and doing some Tub Thumpin’ myself today… But I have a cable guy coming this afternoon, so there goes that idea out the window! Maybe tomorrow, when the sky clears, the rain stops, and the sun comes back out, it would be a better day to do some Tub Thumpin’! Two years ago, I dumped the cable and went to YOUTUBE TV, because we could get it in Florida too… Well, that was all fine and dandy, until the YOUTUBE folks got in a peeing contest with Bally’s Regional Sports, who carry my Cardinals and Blues games… Now I have to jump through hoops to watch them both… But not any longer! I’m going back to cable, today… Speaking of my Cardinals… their bats went into a funk again last night, and they lost….Steely Dan greets me this morning with their song: Black Cow… “so drink your big black cow and get outta here”…  

Well… what a turnaround by the currencies and metals yesterday! And wouldn’t you know it, the press conference that saw Cartel Chairman, Jerome/ Jay Powell tell everyone that while he thinks the economy is improving, the Cartel is going to keep rates at zero, and keep the monthly purchases of $120 billion in Treasury and mortgage-backed bonds going for a while longer when he’s sure the economy has recovered, and the COVID cases are dwindling to near nothing, got everything going… So, when will that be? Only the Shadow knows…

So… yesterday morning pre-FOMC, the Dollar Index was 91.05 and had risen throughout the previous night, but… once Jay Powell’s words were heard, the dollar selling began again in earnest! The Dollar Index dropped to 90.60 at the close of the day, and the euro rose through the 1.21 handle, to 1.2131 when U.S. traders handed over their books to the Asian traders, last night…  But the currencies weren’t the only beneficiaries of Powell’s words…  Gold, which in the early trading yesterday was down $5.20 ended the day up $5.70, which makes that a $10.90 turnaround… And Silver which was down a hefty 43-cents in the early trading ended the day only down 7-cents…  So, Gold closed Wednesday at $1,782.50, and Silver closed at $26.29…

The markets don’t like unknowns, and I’ve explained this before many times in the past.. They like to trade on something solid… not something with shadows, and unknowns! And the unknown was left out there for traders to figure out yesterday, by Jay Powell… There’s just too many questions out there like what happens if….  the economy stumbles?  And how will the Cartel explain their yield curve control while they are selling bonds?  And will the first rate hike be 25 BPS or 50 BPS?  And there are more to talk about, but you get the drift, there are unknowns, and traders don’t like unknowns! Period!

Earlier this week I said that if the euro trades above the 1.21 and keeps moving higher through the level, that we would have a good sing that the dollar is preparing for a long ride on the slippery slope…

The Overnight markets… there  was little movement in the currencies, and the euro begins the day at 1.2130. The Dollar Index weakened to 90.57 overnight, and the A$ has climbed to 78-cents! Gold is down $4.90 in the early trading today, while Silver is up 18-cents…  The overnight traders didn’t seem to think that FOMC was a BIG DEAL… So be it… They’re finished for the week… So, I’m sure they didn’t want to make an large moves and have them hanging around all weekend… 

The price of Oil has really jumped  higher this week and the last 24 hours haven’t changed that mode… The price of Oil is trading with a $64 handle this morning, and this news has awakened the Petrol Currencies… The Canadian dollar has risen to 81-cents, and the Norwegian krone is pushing stronger too this morning. And this rise in Oil price won’t help all those that think that inflation is nothing to worry about… 

Things are looking better in the Eurozone economy too… So, it’s not just a sell dollars/ buy euros trade, it’s a sell dollars to buy euros because they have something going for them right now… German 10-year Gov’t Bonds (Bunds) hit their highest yield in 2 months, and they appear to be heading higher… Which in my opinion could be a reason for buying euros right now…

Speaking of Gov’t Bonds… Globally there are more $18 Trillion in negative yielding Gov’t Bonds outstanding… That means some knucklehead bought a negative yielding bond, and instead of getting paid interest, he has to pay interest to own the bond…  OOh, that sounds too good, I want some at the market, I can’t get enough of them!  NOT! AS IF! To me, any country that sells negative yielding bonds, has no regard for their currency… The U.S. doesn’t sell their bonds with negative yields, but after owning them, and the buyer takes into consideration the inflation rate, then these too are negative yielding…

Last May, almost a year ago, I told you that it was my belief that the debts of the world would cause a collapse of the financial system that we all know and love… And that would bring about a default or two or three or more of countries and their debts… I included the U.S. into this mixture of defaulting countries… I still believe that this is all going to come down the pike and when it does it’ll be like an avalanche… Too much Debt… Too much fake money… Too much willingness to deficit spend more, and no willingness to stop, will be the icing on the cake, folks…

I was reading a report yesterday regarding the food delivery chain, and the writer expressed the belief that by the end of this coming summer, food stores will have empty shelves… The supply chain has been so disrupted, and getting it back in order is taking much longer… Now that’s some scarry stuff, eh? I don’t want to be a Chicken Little but come one, did we really think you could shut down everything and then just start it back up without hiccups? I’m just saying…

OK, getting back to Gold for a moment… The good folks at GATA sent me a note yesterday, and they were talking about technicals. They admit that they are fundamentalists, but when the technicals line up with the fundamentals, like they are now with Gold, a HUGE rally could be in store…

Basically, Gold has been in a downtrend since reaching $2,100 late last summer, and more recently, Gold has been range bound, $1,700 to $1,800… But now.. “The chart has provided some clues, however, that suggest the bulls are finally regaining traction and the market is potentially gearing up for a breakout above $1,800 in the coming weeks.” -GATA 4/28/21

The U.S. Data Cupboard today has the usual Initial Weekly Jobless Claims, which have really been on the downward slope the last two weeks… We had a false dawn with the Claims dropping about 2 months ago, and then they shot back above 700,000 for a few weeks in a row. So, it’s anybody’s guess what this number will be today…  In addition, we’ll also see a final revision to 1^st QTR GDP, which should be a whopper!

Tomorrow’s Cupboard has March prints for Personal Income and Spending… Well, I guess we’ll see what people did with their stimmy checks, eh? It’ll all be here tomorrow… If I were a betting man I would bet that U.S. receivers of stimmy checks, banked the bonus from the Gov’t, or paid down credit card debt… Not many stimmy checks were taken down the store to buy a new big flat screen TV…  And the Personal Spending data for March that prints tomorrow, will be the big payoff on my bet! 

To recap…. The currencies and Metals had huge turnarounds yesterday, which came via Jerome Powell’s words in his speech following the FOMC Meeting…  He basically said that the Cartel will keep interest rates at zero, and continue buying $120 Billion in bonds per month, until the economy proves that it can stand on its own two feet, and Covid cases are nascent…  He hinted that if all things go as planned the Cartel would look to begin tapering their bond holdings/ purchases, in the 4^th QTR this year… There’s no guarantee that any or some of that will even come to fruition… So, dealing with unknowns is not currency traders’ cup-o-tea… so they sold dollars, turning around early morning losses in Gold and currencies…

For What It’s Worth… For many years now, I’ve told you dear readers that the way to end Price manipulation, is to demand delivery for all metals contracts… If everyone who bought Gold or Silver and bought it physical, took delivery, the COMEX would fall apart, and take with it the price manipulators… I’ve said that for years!  Well, Craig Hemke of the TF Metals Report, writing for Sprott, does a good job explaining what I’ve been saying for years and years, and it can be found here: Blog – The People Have the Power (sprottmoney.com)

Or, here’s your snippet: “There are many of us “keyboard warriors” who believe that the current fractional reserve and digital derivative pricing scheme is unfair and rife with fraud. There are also a handful of system apologists who claim that the current scheme is fair and equitable and that silver is abundant. Well, there’s one way to find out. Let’s do this.

If you regularly read these weekly columns, then you’ll recall this post from last week. If not, please read it now before you continue: A Time to Fight Back

In summary, it’s time to get to The Truth, and we the people have to power to uncover it. The pricing scheme has endured for decades, and the alchemy that drives it has left in its wake a system where no one knows for certain how much physical gold and silver exists with clear, undisputed title. Oh sure, if you own and hold physical metal, there’s no dispute at all. However, if you hold a futures contract, an unallocated account, or an ETF, all you hold is price exposure to an overleveraged system. This leaves you with an incalculable counterparty risk that you may not have even considered before today.

With this in mind, a grassroots effort to buy and hold physical silver took hold in late January and lasted into early February. The sudden rush of physical silver purchases drained the existing physical supply and created a stress in the just-in-time delivery system that the bullion banks maintain.

The effort was substantial enough that even the LBMA, in their Q1 silver report, admitted to a physical supply strain.”

Chuck again…Just think what could have been had the pressure remained on the COMEX for a few more weeks? We might be finished talking price manipulators!

Market prices 4/29/2021: American Style: A$ .7800,  kiwi .7263, C$ 8141, euro 1.2130, sterling 1.3956, Swiss $1.1007, European Style: rand 14.2446, krone 8.1728, SEK 8.3364,  forint 297.07,  zloty 3.7653,  koruna 21.2826, RUB 74.68, yen 108.98, sing 1.3253, HKD 7.7625, INR 74.07, China 6.4798, peso 19.98, BRL 5.4153,  Dollar Index 90.57,  Oil $64.94,   10-year 1.66%, Silver $26.47, Platinum $1,224.00, Palladium $3,008.00, Copper $4.52, and Gold… $1,776.60

That’s it for today… Things were looking good for a moment or two last night, as our Blues stomped their way back from  1-3 deficit to win 4-3, and while that was happening, the Cardinals were going ahead 3-1… But then the Cardinals, as I said above, lost… Let’s Go Blues! Day game at Busch today, wish I was going, but I can’t! UGH! Darn responsibilities! I have so many cable linescoming into the basement from the different providers I’ve had through the years… Charter, Dish, U-Verse, and finally no cable YouTubeTV… Yes, I used to have this big Dish on my rooftop, and to me the Dish delivered the best picture quality, but wind and rain was a real downer for the Dish… I don’t have any plans for the weekend, so I think I’ll really do some Tub Thumpin’ tomorrow! Yeah, that’s the ticket! And my first wife was a young Elizabeth Taylor! HAHAHAHAHA! John Lovitz cracks me up!  And this is the last Pfennig of April… When I talk to you on Monday, God willing and the Creek don’t rise, it’ll be May! R.E.M. takes us to the finish line today with their song: The One I Love…  “This one goes out to the one I love, this one goes out o the one I left behind”… I hope you have a Tub Thumpin’ Thursday, and follow that up with a Fantastico Friday tomorrow, and while you’re doing that, please take time to Be Good To Yourself!

Chuck Butler

 

April 28, 2021

* currencies see some slippage overnight

* Gold & Silver begin the day down… 

Good Day… And a Wonderful Wednesday to you!  Another beautiful day here, that will begin to be disrupted this morning, and rain and cooler temps will arrive, and stay until tomorrow afternoon… YUCK! April weather remains a crapshoot in my opinion… I ran across a cartoon yesterday that I read every day… Pearls before Swine…  And in it Rat is writing, and Goat asks him how long the rewrite will take, to which Rat replies, “my writing is perfect the first time, revisions are for sad little losers”… And that reminded me of my later years of writing at my old bank, and every day the Pfennig had to be reviewed by lawyers. You wouldn’t believe the things they wouldn’t let me say!  And I’m with Rat on this one… I’m just saying…  The Amazing Rhythm Aces greet me this morning with their song: Third Rate Romance… Interesting lyrics to that song, for sure!

Well, it was bound to happen some time… And yesterday, was some time… A day when the currencies didn’t see many bids, and they were offered but not by much… The Dollar Index rose from 90.81 in the morning to 90.90 at the end of the day… Still not much movement, and the euro remained well within spitting distance of 1.21, at the end of the day… Traders are still hiding under shells waiting for the FOMC to end this afternoon, and they get the latest set of lies, I mean of ideas from Cartel Chairman Jay Powell…  To me Powell’s press conference will be full of incorrect statements that border on lies to the American public… But, even though we didn’t have a say in who took over the chair of the Cartel, we have to deal with what his policies are….

Gold never found a bid yesterday either but… again the moves were small… Gold lost $5.20 on the day to close at $1,776.80. Silver found a way to gain a few shekels on the day, and closed at $26.35, up 7-cents on the day…   So, from what you can see with the Dollar Index move, and the Metals move, you will come to agree with me, that traders have gone on hiatus this week, so far, ahead of the FOMC meeting, which takes place this afternoon…

In the overnight markets… it appears the traders there woke up, and decided to buy dollars ahead of the FOMC… The euro saw some slippage, and the Dollar Index rose to 91.05, from yesterday’s close of 90.91… Gold ^ Silver continue to see nothing but sell orders, with Silver really seeing some selling this morning in the early trading… Gold is down $9.80 and Silver is down $43-cents to start the day. 

The U.S. President has announced a new $1.8 Trillion spending plan called the Family Plan, that he will explain will be a net zero plan because he plans to tax the rich…  More spending, more taxes… I’m at a loss as to how much more of this is going to be introduces to us, and shoved down our throats… I’m just saying… 

I can’t help but think that with all the talk of an infrastructure Bill, and a new Green Deal, and more stimmy checks, and a Family Plan, that Traders will be ready and willing to begin to sell dollars once they have heard Jay Powell speak and not say anything about tapering…  Everything else he has to say will be taken with a grain of salt, which is more than I would give him credit for! I read this morning that the markets are expecting Jay Powell to announce that the Cartel will begin tapering in the 4th QTR… The question I would have is what happens if things change before now and the 4th QTR? It’s not as if we don’t have any experience with things changing overnight! 

So, if the markets are expecting this announcement from the Cartel, that explains why bonds got sold off the back of a truck!  The yield on the 10-year Treasury rose from 1.58% to 1.64%. Remember in bonds, when yields rise, the price of the bond goes down, and vice-versa…  

Someone with a bigger mass of gray matter in their heads needs to solve this riddle for me… Riddle me this Batman…  The Cartel has implemented Yield Curve Control (YCC) to bring down the yields of Treasuries, so how’s that going to work (YCC), that is, when you begin to taper? (begin to sell the Trillions of bonds they own)  Ahhh, grasshopper, I would betcha a shiny quarter that the Fed Heads haven’t thought of that yet… 

Yesterday, I tried to spell out the proposed tax increases out for you, but in case you didn’t get it…  There was an article on www.zerohedge.com with some Q.&A’s… Let’s listen in:

Q: Put a 60% tax on capital investments and what happens to investment? 

A: Investment in new businesses will plunge.

Q: Put huge taxes at the state level and what do people do?

A: They move.

Q: What happens to neighborhoods, even states, when the wealthy flee?

A: Think Illinois

Chuck again… And I would add to the states, New Jersey, New York, and California…

OK… but you can’t say I haven’t warned you that this day would be coming for a long time now, right? I’ve said over and over again that this dance is gonna be a drag, no wait! I’ve said over and over again that this uncontrolled debt buildup is going to bring about higher taxes… And these tax increases by the Biden administration will be the first ones in 30 years!

Remember George Bush, in 1988 saying, “read my lips, no new taxes”, and then in 1991 taxes were raised?  Just a little history there for us this morning… Because there’s your last time 30 years ago that taxes were raised…  There are a good number of people in the working world that have never heard of higher taxes… Well, that’s all about to change!

Well, let’s talk about something else besides taxes… And inflation, and debt, Oh no! I can’t think of a single thing to say! Ok, how many of you thought I was serious that I can’t think of something to say? Longtime readers know all too well that, that’s not true!

So, did you hear that Russia & China’s plan to dedollarize is working?  Well, I have an article for you in the FWIW section today that talks about this dedollarization, and so forth, so you won’t want to pass that up and go to the Big Finish without stopping by the FWIW article first!! 

In the U.S. Data Cupboard today… The FOMC meeting comes to an end, and Jay Powell will hold a press conference afterward. That’s the Big Kahuna news item today… An FOMC Meeting… What has our lives become of when we’re looking forward to a FOMC Meeting?  I take that back, if things were different, this could have been an interesting meeting, and press conference, but since things haven’t really changed for over a year now, what else can you expect?

In yesterday’s Data Cupboard we had the Case/ Shiller Home price Index, and it showed exactly what I said it would show, that there was a huge price increase in housing this last year… 12% was the year to date figure for February… Just wait until the next couple of months pass bay and the price increases in building materials drive home prices sky high!

We also saw the stupid Consumer Confidence Index for this month of April, and it shot higher by a huge margin from 109.00 to 212.7!  Like I said, the unemployment bennies are great, the stimmy checks are great, the stock market is setting new highs all the time, life doesn’t get any better than this, for most people… But like I’ve said over and over again… They don’t ask me, my opinion, on what could go wrong… Or better yet, maybe they read the Pfennig, and know better than to ask me? As if! 

To recap … The currencies gave a some ground on Tuesday, but not that much, and Gold never found a bid and lost $5.20, but all in all the markets were quiet, and no big movers were on display, as traders continue to be on hiatus until they see the color of the FOMC’s meeting outcome…  The overnight markets didn’t bring about any major changes in trading, but we did see some slippage in the currencies, and that has Chuck scratching his bald head…  so we all have to wait for the outcome of the FOMC meeting today, and the press conference following.  Chuck goes a step further in talking about the new taxes that are coming your way… And there is more, as always!

For What It’s Worth… Ok, I gave you a teaser above on today’s FWIW article about how Russia’s plans to dedollarize are working, and getting people to notice, that life without having the dollar in the terms of trade and hogging all the shelf space of your currency reserves, is working… For Russia that is, and the article can be found here: Putin’s Bid to Ditch Dollar Picks Up as Exports Move to Euro (msn.com)

Or, here’s your snippet:” Vladimir Putin’s multi-year push to reduce Russia’s exposure to the dollar hit a major milestone as the share of exports sold in the U.S. currency fell below 50% for the first time.

Most of the slump in dollar use came from Russia’s trade with China, more than three-quarters of which is now conducted in euros, according to central bank data published late Monday. The common currency’s share in total exports jumped more than 10 percentage points to 36%, the data for the fourth quarter show.

Multiple rounds of sanctions and the constant threat of more to come have pushed Russia to find ways to isolate its economy from U.S. interference. The central bank has also stripped back its holdings of Treasuries in its international reserves, loading up on gold and euros instead.

The shift away from dollar trade with China accelerated in 2019 when oil major Rosneft PJSC switched export contracts for crude shipments to euros. Lots of mid-cap companies are now also seeking ways to reduce exposure to the U.S. currency, with many switching contracts to yuan or rubles in trade with China, according to Daniel Haindl, the co-head of FX & interest-rates sales at VTB Capital in Moscow.

“We also see that a growing portion of settlements between Russia and former Soviet countries is in rubles,” Haindl said.”

Chuck again… I know this doesn’t make you want to say hip hip hurray  for Russia, but it does tell you that the world will eventually come around to Russia’s way of thinking that the U.S. has not shepherded the dollar away from danger and potential collapse from so much debt, and money printing… And that Idea that many other countries could follow suit, realizing that they haven’t the need to hold so many dollars in reserve, and that idea scares the bejeebers out of me!

Market Prices  4/28/2021: American Style: A$ .7744,  kiwi .7214,  C$ .8063, euro 1.2069, sterling 1.3865, Swiss $1.0924, European Style: rand 14.3601, krone 8.2687, SEK 8.3795,  forint 299.60,  zloty 3.7993,   koruna 21.5114, RUB 74.90, yen 109.00, sing 1.3264, HKD 7.7624, INR 74.43, China 6.4813, peso 20.06, BRL 5.4390,  Dollar Index 91.05,  Oil $63.38,   10-year 1.64%, Silver $25.93, Platinum $1,218.00, Palladium $2,956.00, Copper $4.47, and Gold… $1,767.30

That’s it for today…  well I got another opportunity to go the Busch Stadium again last night with good friends Gus & Dianne… And I saw a great pitched game, and some timely hitting for once in a Blue Moon, for a Cardinals win! Then got home late last night, and I’m really dragging the line this morning… So, as soon as I hit send on this letter this morning, I’m going back to sleep!  There are times I’m so very glad that I’m retired! So, if I stumbled around this morning I didn’t mean to… My good friend Gus had been to the Blues game the night before and saw a winner, and then last night to the Cardinals game and also saw a winner, I told him he might want to contact those teams management, and lease himself out to games for a price! HA!  I got a Jack Buck statue (small) that has voice chip that has two of his most famous calls, last night at the game, this will fit in nicely with my Stan Musial statue I have on my back bar… The giveaways they have at the ball game these days are much better quality of things than they used to be.. .The Marshall Tucker Band takes us to the finish line today with their song: 24 Hours At A Time…  I shouldn’t be listening to this song, because I won’t be able to go back to sleep afterward!   I hope you have a Wonderful Wednesday, and I hope you will Be Good To Yourself!

Chuck Butler

April 27, 2021

* Currencies & metals gain small amounts on Monday

* Palladium reaches $3,000! 

Good Day… And a Tom Terrific Tuesday to you! 85 degrees in Florida is not the same as 85 degrees in Missouri… I know it took me quite a few years to figure that one out, but I did, and yesterday was a prime example of that… My Accuweather app told me it was 85, but, I was tempted to go inside and grab a sweatshirt! In another month, once the earth turns on its axis, I’ll be sweating in 85 degree weather here… Just not now…  Thanks to all who sent along a note about the Money Show Panel I was on last Thursday.. My good friend, Dennis Miller, called to tell me he compared my picture that appears on the www.dailypfennig.com site, and a picture he took from the zoom screen and he said, “holy cow, you have lost a ton of weight!”  Ok, the group Gallery greets me this morning with their 70’s hit song: I Believe In Music…  “I believe in song..” 

And I do believe in music, it can soothe your sorrows, or lift you up, or make you wanna dance, and sing along…  I bet I didn’t have to tell you that about me did I? HA!

Well, my fears about Traders taking a siesta to begin this week, until they see the color of the FOMC’s meeting, looks to be coming to fruition…  The currencies gained a little bit yesterday, the Dollar Index began the day at 90.88, and it closed at 90.83…  The euro continues to knock at the door of 1.21, and a true test of weather or not this is beginning to look like a long ride down the slippery slope for the dollar, would bring about the euro charging into the 1.21 handle…

Before I get to Gold & Silver… I wanted to point out that the Chinese renminbi / yuan has really been on an appreciation move lately…  From all I read, China’s economy is working on all 8 cylinders these days, a far cry from their shutdown last spring. They’re back, and with all the commodities that they produce, rising in price, I believe good times are back for China’s economy, and in the next couple of years, I expect them to revisit 10%+ GDP growth! 

With the renminbi / yuan on a roll, guess what other Asian currency is tagging along with its own rally? OK, longtime readers will recall me telling them that when the renminbi rises VS the dollar, so does the Singapore dollar, and that’s what we’re seeing take place once again… I was beginning to think that the renminbi / yuan would never rally strongly again… Good thing I didn’t say it out loud! HA!

The other currency that has seen deep dark depression, excessive misery, is the Russian ruble. I talked about how the ruble was getting punished for the perceived troubles rising between Russian and Ukraine…  Well, I don’t know what caused traders to forget about those troubles, and start buying rubles, but they did, and I’m happy about that!

OK… Gold & Silver didn’t move that much yesterday either, but at least their moves were positive as opposed to the two day spanking they got Thursday & Friday last week… Gold ended the day up $4.10 to close at $1,781.00, and Silver ended the day up 21-cents to close at $26.28…

And in the overnight markets, the traders there have gone into hiding too, and there was little to no movement in the currencies and metals… What movement there was tended to be positive for these two asset classes… The Dollar Index begins the day at 90.81, and Gold & Silver are flat to begin the day.   

I did notice that Palladium reached $3,000 today… J recall a few years ago when Palladium lagged the price of Platinum, and a Palladium mining owner said that Palladium would bypass Platinum that year, and he was correct, and Palladium hasn’t looked back since!  

I just keep thinking about all those home builders and remodelers that are having to buy lumber these days… Remember that I told you that in the last year lumber is up 251%, and that was as of two weeks ago, it’s probably even higher now! So, let’s say you contract with a builder to build you a home a year ago, and he quotes a price based on lumber prices then… About 2 months later he calls you up and says, Ahem… the cost of a 2×4 is skyrocketing, along with a sheet of plywood, I’m going to have to adjust your price… And you stubbornly say, “but we had a contract”, and he smugly points out that the fine print says, building materials’ prices are subject to change…   Uh-oh!

And here’s the thing that really will get you later on, when inflation comes back down and things get priced normally again… Your house cost basis will be extremely overpriced…  I’m just saying…

The reason I got to thinking about all that, is Commodity prices are going through the roof, and Gold is still lollygagging below $1,800… I’m going down to see the witch with the gold capped tooth, and bring her some eye of newt, and other strange things, to see if she can mix something up right there in the sink to put a hex/ spell, on the price manipulators…  A curse on your houses!

Patience, Chuck, patience…  Your time will come… You know it in your heart of hears, but patience, while maybe being a virtue, is not one of my strong points!

On a sidebar… the price of Copper keeps rising, and this morning trades with a price of $4.48!  I’ve said all along that Copper is a good inflation indicator… Now, I heard David Rosenberg, the well followed economist, say that “he had never seen someone walking down an aisle in a store asking for a ton of copper”…  thus refuting the claim that Copper was an inflation indicator…  Hmmm, longtime readers know that I simply adore David Rosenberg, so here’s where the relationship gets a spanner thrown in the works…  (I’m sure he doesn’t even know I exist!) 

OK, the folks at www.Wallstreetonparade.com , Russ and Pam Martens, really did some research on the Banks and their derivative positions yesterday… They contend that the Fed is lying to us about the strength of the banks, by way of the Fed’s “Stress tests”…   They point out that the Fed should no longer be the regulator for these banks since they also act as those banks’ sugar daddy…  And I agree! It’s time there’s a 3^rd party regulators for the banks…  I’ll give you the link to the article, it’s very good and will have you wondering when these derivatives will  all implode… The Fed Has Misled the Public about the “Strength” of the Wall Street Mega Banks: This Chart Shows the True Picture (wallstreetonparade.com)

Ok, it’s earning season once again… This should turn out to be quite interesting… But even if the Corporations report horrid earnings, it won’t stop this stock market’s mania phase…

The U.S. Data Cupboard finally had some worthy prints yesterday, with Industrial Production and Capacity Utilization… Well, they both improved in March, from their rotten negative prints in Feb, but they failed to meet expectations… Industrial Production gained 0.5% in March, VS the -negative -0.9% in Feb, but didn’t meet expectations which were to gain 2.2%… Hmmm…  And Capacity Utilization basically brought the Feb/ March months to flat, with a March gain of 0.9%, reversing Feb’s negative 0.8%…  So, nothing that makes you wanna shout, throw your hands up and Shout, no wait! Not now Chuck…

Today’s Data Cupboard as the Case/ Shiller Home Price Index, which will tell us how much home prices have gained in the last year…  I’m thinking that they have gone up quite a bit!  In addition today, we’ll see the stupid Consumer Confidence report for this month… Everyone has the stimmy checks, the stock market is still setting records, what’s there to be worried about?  Of course I jest… There’s plenty to be worried about! And Bank holdings of derivatives is just one of them!

To recap… The currencies did gain VS the dollar on Monday, but their gains were very small, as Chuck’s fear that traders are in a wait-n-see mode to what the FOMC will do on Wednesday… Gold & Silver also gained VS the dollar, or the dollar lost VS the metals, either way, the moves were muted as well, and that leaves Chuck wondering why if Commodity prices are soaring, what’s holding Gold back? Oh, that’s right price manipulators, of which Chuck has contracted a witch to place a hex on price manipulators!  Chuck points out the rallies in Chinese renminbi/ yuan, Singapore dollars, and Russian Rubles… And as always he ventures out into uncharted waters…

For What It’s Worth… OK… since I spent some time this morning talking about building costs rising, this article talks about how while the Fed may brush this off as temporary, the mindset of people is that inflation is rising, and will act accordingly, and it can be found here: Forget 2% Inflation. With Margins Forcefully Squeezed, Big Companies Raise Prices, Point at Massive Inflation Overshoot | Wolf Street

Or, here’s your snippet: “Big companies, such as Procter & Gamble, have used their earnings calls to prepare investors, customers, and consumers for what is coming: Surging input costs are creating hefty margin pressures, and companies are confident they can regain their margins by passing on those surging costs by implementing large price increases. Smaller companies face the same scenario of surging input cost and margin pressures.

Todd Miller, President of Classic Metal Roofing Systems, which manufactures metal shingles in the US, sent me an email today where he goes into detail as to what his industry, and the broader home remodeling industry, is facing, in terms of surging costs, shipping issues, and supply constraints. This is Todd Miller, a long-time reader and supporter of Wolf Street:

“Our industry is dealing with supply chain shortages as well as rapidly increasing prices. While we have not had to go to this extreme yet on the types of specialized products we produce, I have seen the selling prices of “commodity-based” metal roofs increase by 30% over the last six months, with additional increases projected.

“We’re also seeing the industry-leading asphalt shingle market in a pickle. Prices are going up, manufacturers have distributors and contractors on allocation, and lead times of 30 weeks are being reported. We’re also seeing the industry cut back on product offerings.

“The end result is we have a very robust remodeling and construction market, with limited product availability and spiraling prices. Everyone is aware of the lumber issues, but we’re also hearing of major issues with windows, doors, and siding products.

“As a metal roofing manufacturer, here are some of the raw material increases we have experienced over the past six months:

• Unpainted aluminum: up 15%
• Unpainted galvanized steel: up 57%
• Coatings used on our products: up 10%
• Corrugated packaging: up 15% on average
• Lumber for packaging: up 34%
• Fasteners: up 5 to 8%.

“Typically, the metals and coatings make up about 85% of our product costs.”

Chuck again…  that’s crazy folks… and while it may only last a while, it also may last longer than your houseguest that likes to make his eggs with his shirt off! And I’m afraid that once that the Fed acknowledges that inflation is running hot, it’ll be too late, too late baby… 

Market Prices 4/27/2021: American Style: A$ .7784,  kiwi .7227, C$ .8059, euro 1.2087, sterling 1.3905, Swiss $1.0954, European Style: rand 14.3331, krone 8.2830, SEK 8.3874,  forint 299.96,  zloty 3.7757,   koruna 21.4156, RUB 74.89, yen 108.26, sing 1.3256, HKD 7.7616, INR 74.59, China 6.4842, peso 19.92, BRL 5.4608,  Dollar Index 90.81,  Oil $62.32,  10-year 1.58%, Silver $26.32, Platinum $1,250.00, Palladium $3,000.00, Copper 4.48, and Gold… $1,782.30

That’s it for today… Well I was the star of the show yesterday at the Oncology office! Everyone there wanted to know my secret to losing so much weight… I told them… when you can’t eat sweets, you can’t add salt, and you cut out white bread carbs, there’s not much point to eating… I do eat, folks, just not like I used to eat…  Our Blues were very impressive in their win last night, playing all three periods. My beloved Cardinals found the going tough to hit the ball last night, and lost… UGH! I had the baseball game on the TV, and the hockey game on my phone…  Well, my heart doctor, my primary doctor, and my oncologist have all given me the thumbs up and to keep doing what I’m doing… So, there you have it! At least for another month! HA! Tom Petty, whom we lost way too soon, and the Heartbreakers takes us to the finish line today with their song: I Won’t Bank Down… “you can stand me up at the gates of hell, but I, won’t, back, down”  OK… so now it’s up to you, to go out and make this a Tom Terrific Tuesday, and while you’re at it, you might want to Be Good To Yourself!

Chuck Butler

 

April 26, 2021

* Currencies gain VS the dollar on Friday… 

* Taxes, as a result of every growing debt, to rise… 

Good Day… And a Marvelous Monday to you!  Well, did you tune in for the panel discussion that I participated in last Thursday? I thought it went pretty well, and I thoroughly enjoyed doing my bit, that’s for sure! I hadn’t seen Mary Anne and Pamela Aden for a few years, and afterwards I had the thought that maybe they had found the fountain of youth, for they looked the same to me, as they did the last time I saw them in Orlando, years ago! And Omar spoke as well as he writes, which sometimes is a tough trick to pull off…  And as far as I’m concerned, I have fun speaking, even more than I do writing… not that I do either of them very well, but I have fun!  So…  for all of you who had to work on Thursday during the Money Show presentation, I have a link to a YOUTUBE of the panel discussion, and here it is: https://youtu.be/Pn7Znetr9XY   How’s that for a quick turnaround? HA! Gerry & The Pacemakers greet me this morning with their song: Ferry Across The Mersey…  I used to sing this song to Alex when he was a toddler to get him to sleep…  Alex is nearing 26 this summer, so that tells you how long ago that was!

Friday was an interesting day as far as the currencies are concerned… The dollar bugs were sent back to their wall boards, and the currencies romped and frolicked all about all day long, which saw the Dollar Index end the day fall below 91 to 90.85…  The euro is pushing toward 1.21, which is where we saw the PPT come in BIG TIME the last time the euro got to 1.21, and it’s been a tough row to hoe for the euro ever since, but after some back and forth trading of the last 5 weeks, the single unit is pushing toward 1.21 once again…  And kiwi has pushed through 72-cents, and so on… it was a day to frolic in the sun for the currencies…

But Gold & Silver were not allowed to go outside for any frolicking and they suffered their second consecutive day of selling on Friday.  Gold never could find a bid to end the week, and I have a sneaky feeling that the price manipulators were seeing to that!  The cryptocurrencies are seeing fear enter into their trading days, and for this I would have thought Gold & Silver to be the beneficiaries of any slippage in the cryptos…  But that was not to be, at least on Friday…  Gold closed the day down $7, to close at $1,777…  I have to apologize right here, right now, for deep sixing Gold last Wednesday, when the title of my Pfennig was Gold Inches Toward $1,800… Because ever since that morning, Gold has seen selling… Hmmm… Maybe I didn’t jinx it so much but rather I alerted the price manipulators, who were sleeping at the wheel, that Gold was nearing $1,800….    Either way, I should have just allowed Gold to fly under the radar…

Silver closed the day on Friday down 16-cents to end the week at $26.06.. I have to say this about Silver…  You know with the all the talk of a Green Deal, you would think that Silver would be inching higher daily…  I know you know this, but Silver is a major component of Solar Panels…  And that’s only one of its uses that don’t have anything with stores of wealth!  My spider sense is tingling folks, and it’s tingling because I think Silver is about to take off for higher ground. Traders just don’t know it yet, but they will very soon, that is if my spider sense is anything like it used to be!

In the overnight markets….. there’s been not much movement overnight, with the Dollar Index inching up to 90.88, but that’s about as noticeable as removing a bucket of sand from a beach… And Gold & Silver are basically flat in the early trading today…  I have this feeling that the markets traders have gone into a batten down the hatches mode, ahead of the FOMC Meeting on Wednesday this week.  Why would do they do this? Because the Cartel is a wild card, and traders don’t trust that they will keep everything moving along, and not mention tapering or anything like that. 

Ok, part of the discussion on Thursday’s panel was about how this “all -everything bubble’ dominates everyone’s thoughts these days…  I had chimed in and called this the “mania phase”, where investors just pile in and buy everything, no matter what the fundamentals are, like does the company make money?  And items that make no sense, like NFT’s, and crypto that were created as a joke.. Basically, this “mania phase” is the 3^rd phase of a bull market. In the bull market of 1982 to 2000, in stocks, the mania phase didn’t kick in until 1995… Remember when Big Al Greenspan saw this, and tried to stop it with his “irrational exuberance” speech? So, the mania phase ran 5 years before bursting, and cause pain and losses everywhere… This one could very well last just as long, with interest rates at zero, and the Gov’t sending out stimmy checks like money grows on trees. With all the fake money on the streets, it will continue to drive up prices for things that everybody wants to buy, but nobody needs… Remember during the last weak dollar trend, when euros were the new king, and they were being use in movies instead of dollars? That was the mania phase for currencies… And in 2011 that was over…  So, that’s the whole story that I would have loved to explain on the panel discussion, but due to time constraints, we move ahead in the program…

So, last Thursday, I gave you a list of soft commodities that were flying high and in rally mode… Things like soybeans up 72%, heating Oil up 107%, food prices up 10%, copper up 83%, and lumber us 265%, all in the last year… I talked about how inflation is all around us, but there is no technical inflation… But the currency traders see these rallies and know that 1. Given the stress on the food and commodities delivery system in the past year, that now that things are opening up again, that there will be this HUGE rush to buy, and that will drive up prices, thus signaling inflation, and 2. The amount of fiscal stimulus that the U.S. is supplying will eventually drive price higher too, and that’s reason to mark down the dollar, and buy Gold…   Got Gold?

On a sidebar here… Don’t you just love when the President puts all Americans in one big pile and accuses us of things? I take major exception to him when he does this… he doesn’t know me, so until he takes the time to get to know me, he might not want to include me in his generalizations!  I know this has nothing to do with the markets, but, it was on my  mind since last Thursday, and I had to get that off my chest this morning… 

Ok… back to the markets, economies and dolts…  Ok, longtime readers have heard me crying wolf about the debt in the U.S. for more years than I care to count off…  But one of things I always told people about this rising debt was that taxes would be going higher…  And with that thought, here’s Dave Gonigam at the 5 Minute Forecast, on taxes….

“President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6% to help pay for a raft of social spending that addresses long-standing inequality, according to people familiar with the proposal.”

The higher rate would affect those with incomes of $1 million or more. The present rate is 20%. If you toss in the 3.8% Medicare surtax, it’s 23.8%. So in reality, the 39.6% proposal is 43.4%.

➢           That Medicare surtax on capital gains took effect as part of Obamacare. It kicks in whenever modified adjusted gross tops $250,000. And that $250K figure is not bumped up each year for inflation.

In states that impose steep capital gains tax like California and New York, the total government take would top 50%.”

Chuck again…  So, I can here a lot of you saying, “well that $1 Million in income, excludes me” Au Contraire Monfrere… Just wait… Because this is how this will play out… After a couple of years of not reaching the goals for tax receipts from this program, the Gov’t will come for your tax dollars… Trust me on that one folks, it starts at the top and trickles down, to you and me…

Debt just keeps moving higher every minute of every day… And there’s nothing I can do to stop it, so I just sit here and think of all the things that are being disrupted by it…  The research paper of Rogoff and Reinhart says that when a country’s debt get’s to 90% of GDP that it will cause a negative to GDP… And we’re currently around 130% of GDP, which explains why the GDP of the U.S. has averaged about 2.1% for the last decade…  This year will be an exception because of the shut down of the economy in 2020, but if you average out the two years, then it will no longer be an exception!

The U.S. Data Cupboard was very lacking last week… But this week will be different, starting this morning with March prints of Industrial Production and Capacity Utilization..  you may recall that these two were very disappointing in Feb at -1.2% and -.9% respectively…   Tomorrow we’ll see the stupid Consumer Confidence, which is really just a pulse of the stock market…  And Wednesday is an FOMC Day! How did that sneak up on us?  Well, it will be a FOMC meeting day with a press conference afterward…  The Cartel is not going to make any changes, so it will all be about what Jay Powell has to say in the press conference afterward!

Later in the week we’ll see the Weekly Initial Jobless Claims, and on Friday Personal Income and Spending will print for March…   So a fun-filled week packed with lots o’ data… Should be an interesting week… stay tuned!

To recap… The Currencies romped and frolicked over the dollar bugs on Friday, sending the euro to near 1.21, and the Dollar Index down to 90.85….  Gold & Silver were not allowed to participate in the dollar bashing on Friday… Gold was down $7, and Silver was down 14-cents… Chuck describes his thesis on the mania phase, and then goes into a discussion of taxation because of the debt, so you won’t want to have missed that!

For What It’s Worth…  Well… this is an article that the good folks at GATA posted this weekend, and so unless you are a member of GATA it’s not a public article, but I’ve got it here for you! This about a guy who has changed his mind on metals manipulation…  Don’t forget the recap of the article at the end, for I have a comparison for you… 

Or, here’s your snippet: “What does Ross Norman, formerly chief executive officer of London bullion dealer Sharps Pixley, now CEO of Metals Daily, think about gold market manipulation?

Three years ago, in an interview with Grant Williams’ Real Vision, Norman said “you betcha” when asked if central banks had an interest in manipulating the gold market, adding that while he didn’t know if they were doing it, he thought they “probably” were:

But now he does a 180:

“That same narrow linear thinking in my view — and this is where I disenfranchise many of you — applies to those who maintain that the gold market is manipulated. My frustration is firstly that there is not only no evidence to support that view and less regard or critical thinking around the second-order ef fect of pushing the mantra. I have many personal friends who would not consider investing in gold because they believe the bullshit … those morons pushing the line are working against their own interests, no matter the damage to the ‘brand.'”

No evidence?

GATA cordially invites Norman to support his assertion by responding to the decades of documentation”

Chuck again… Ok, so he thinks I’m a “moron”… Well, as Pee Wee Herman would say, “I’m rubber and you’re glue and everything you say bounces off me and sticks to you!”   Ok, here’s my comparison… First of all something along the way made him do this 180, right?  Maybe something to the tune of his new job makes him say these things?

I compare this to Big Al Greenspan… Many of you don’t know that Big Al was a student to Ayn Rand, who was the ultimate Gold Bug, which means Big Al was too a Gold bug, but then he went on to become the Fed Chairman, and suddenly, Gold is a Barbaric relic?  Never moving off that thought all his years at the Fed, but… as soon as he goes back to civilian life, he starts to tout the benefits of owning Gold…  Think what you want here, but I’m saying he was told to be the Fed Chairman that he would not be allowed to bestow his learnings of Gold…

And why is that, you ask? Because the Gov’t does not want Gold to be more popular than the dollar, and the Fed is the captain of the dollar’s ship, that’s why! 

Market Prices 4/26/2021: American Style: A$.7780,  kiwi .7218,  C$ .8037, euro 1.2082, sterling 1.3891, Swiss $1.0921, European Style: rand 14.2742, krone 8.3095, SEK 8.3806,  forint 300.80,  zloty 3.7711,   koruna 21.3649, RUB 74.83, yen 108.01, sing 1.3262, HKD 7.7594, INR 74.79, China 6.4944, peso 19.85, BRL 5.4741,  Dollar Index 90.88,  Oil $61.25,  10-year 1.59%, Silver $26.11, Platinum $1,240.00, Palladium $2,954, Copper $4.43, and Gold… $1,777.50

That’s it for today… We started the weekend with rain, and it lasted all day on Saturday, giving way to a beautiful day on Sunday…  I was able to sit outside, watch my beloved Cardinals sweep the Reds, and barbeque some very delicious Chicken Breasts… A Chamber of Commerce day for sure! Our Blues rallied on Saturday to defeat the Avalanche… they need more efforts like that to make the playoffs!  Billy Paul takes us to the finish line today with his song: Me & Mrs. Jones… This used to be a fave song of the guys on the trade desk back at Mark Twain Bank… I hope you have a Marvelous Monday, and will Be Good To Yourself!

Chuck Butler

April 22, 2021

*Currencies & metals rally on Wednesday… 

* You don’t want to miss this, Chuck thinks he’s in line for a Nobel Prize! 

Good Day… And a Tub Thumpin’ Thursday to you! A bonus Pfennig day to boot! Man was it cold here yesterday! I went outside for a moment, and turned right around and went back inside, for it was too darn cold for me! Remember, I spent 3 months in a very warm climate, and therefore my body is unaccustomed to having cold air blow on it! HA!   And today and tomorrow won’t be much warmer! UGH! From what I see, I won’t be back outside to sit in the sun until Sunday!  Sunday, Fun day, as my good friend, Duane often says… Cardinals blow two chances to win the game yesterday, and blow a great pitched game by their pitcher to lose 1-0… UGH!  OK, all you 70’s bands fans turn up your machines, because today, Vanilla Fudge greets me this morning with their song: You Keep Me Hanging On… I love this version of the song, and for once the remake was better than the original…

OK… Well the all clear horn sounded yesterday morning giving currency traders the green light to sell dollars, and that the PPT was gone, for now that is…  Tuesday saw the currencies give back a good portion of their previous 3 days of trading gains… And yesterday morning the PPT was still hanging around to scare off any dollar sellers… But midday on, the dollar selling began again in earnest, and the Dollar Index fell from 91.42 in the morning to 91.13 by the end of the day… The euro and the Aussie dollar (A$) recovered nicely, and the currencies that didn’t succumb to the dollar buying on Tuesday, added to their gains…

And Gold & Silver really swung a mid section punch at the price manipulators, and moved higher on the day, all day, until the normal trading hours closed, and then these two metals didn’t stop gaining VS the dollar… Or, as I like to think of it, the dollar lost ground to the metals… Gold was up $14.80 on the day to close at $1,794.60, and Silver really took a chunk out of the dollar’s armor rising 73-cents on the day to close at $26.65…

Here’s you last chance saloon to sign up for the virtual Money Show presentation this afternoon, featuring The Aden Sisters, Omar Ayales, and yours truly… Click this link to take you to the sign in page with all the info you need…

https://online.moneyshow.com/2021/april/money-metals-and-mining-virtual-expo/speakers/1e45e94ad4c911d487fc0050da180a7f/chuck-butler/?scode=052583

In the overnight markets… The currencies have continued to push the currency envelope across the desk, and have the dollar bugs on the run as I write this morning… The Dollar Index begins the day at 91.09, which is down from last night’s close of 91.13… The European Central Bank (ECB) met this morning and left all their stimulus in place in hopes of an economic rebound soon…  yeah… sort of like crossing your fingers and hoping… The ECB used to be dynamic, and now they sit on their hands, cross their fingers and hope… I just got a thought in my mind here, that hopefully you won’t mind me sharing… 

Back in the last weak dollar trend from 2002 – 2011, I used to type European Central Bank (ECB) nearly every day, for they were always in the news with their currency trading hot every day…  But they’ve faded from the news front, and take a back seat to the Cartel now…  Funny how times change, eh?  Ok, back to the overnight markets!

Gold & Silver start the day in the red this morning…  Don’t know why this is going this way this morning, but it doesn’t mean it will be the way these two trade all day… Gold is down $9.80 this morning and Silver is down 22-cents…  Up, down, Up, down, it’s like the price manipulators are making these two metals do their exercises! UGH!  Oh well, these two have had good weeks so far, let’s not lose fact of that! 

I received an email in the Pfennig Replies box yesterday that got me thinking about something that could very well be coming down the pike… It was just a couple of days ago that I read an article by an “insider” who said that strong regulation on digital currencies, like Bitcoin, was coming from the SEC… And then I noticed that Bitcoin and the other digital currencies were all backing off their recent highs… Could this news be what’s scaring the digital bugs?  I still truly believe that once the U.S. has their own form of a digital currency that they will outlaw owning the other digital currencies. I say that from my history with how the U.S. does not like competition with the dollar…  Look at all the years of the price manipulators trying to scare investors from buying Gold… 

OK… There was another piece of news that I talked briefly about last week, and that is the $814 Billion in Margin Debt…  And how right before the last 2 stock crashes, margin debt ran up very high, not this high, but high… And what really got my goat about the news was that when Cartel Chairman Jerome Powell was asked about the size of the debt, he replied that he didn’t follow it so he couldn’t comment on it…  Wait! What?  Well, if any of the economists that you employ, at the Cartel,  happen to be reading this right now, maybe they’ll share this bit of information with you so you can do something about it… In 1929 only 2.5% of Americans owned stocks, and you think that stock crash brought about a lot of misery? Well, today 55% of Americans own stocks, and if there is a stock crash, there will be pain and misery all around and about… Especially if a ton of these Americans have their stocks leveraged with debt…  

Here’s what you can do right here, right now, and it’s something that Big Al Greenspan should have done in 1996 when he said that the stock market was full of irrational exuberance… And that is… drum roll please, because I should get a Noble Prize for this suggestion…   RAISE THE MARGIN RATE TO 65%!

Back in 1974 when I was doing margin for a brokerage firm, the initial margin rate was 65%, and it kept all those little accounts that shouldn’t be buying on margin from doing so,  because margin gives you leverage, that can end up going either way… Stop this now Jay… stop it from getting too much larger, and you’ll be made a hero…

OK… I was going through Twitter to look for something yesterday that I thought I saw come across on my phone, and I came across this…

Commodity prices over last year… Lumber: +265% WTI Crude: +210% Gasoline: +182% Brent Crude +163% Heating Oil: +107% Corn: +84% Copper: +83% Soybeans: +72% Silver: +65% Sugar: +59% Cotton: +54% Platinum: +52% Natural Gas: +43% Palladium: +32% Wheat: +19% Coffee: +13% Gold: +3%

And you wonder why these items are all heading higher in price?  Egon Von Greyerz tells us why… Let’s listen in on his latest Twitter donation:” As of April 2021, the M1 supply has gone from $4.5T to $18.1, a rise of 450%.

Such data represents a pretty bad report card for the Fed’s failed monetary experiment of unlimited #QE.

The Fed’s solution to the problem? Hide it. – Egon Von Greyerz on Twitter

Chuck again… Well, our current National Debt is greater than $28 Trillion, that’s $80,000 liability for each citizen is greater than $85,000, and if they only divvy it out to tax payers the bill would be $225,000…  Ok, do you want to stop the illegal immigration of people into the U.S.? Have them sign a document telling them to become a citizen they will have to divvy up $225,000 to remain…  Now that would cause a lump in one’s throat, now wouldn’t it?

And that’s just the current debt… The Unfunded Liabilities are $162.7 Trillion! Folks, that’s never going to be paid off, so we might as well just go ahead and default on it now and get it over with!

All I can say about all of these things that keep causing a swell to form that eventually will turn into the Perfect Storm on our Financial markets, is… Got Gold?

The U.S. Data Cupboard is finally going to produce something for us to look at today, with last week’s Initial Jobless Claims…  Recall that the previous week saw a huge drop in the number of claims filed from 769,000 to 576,000… recall that I pointed out that the previous week’s numbers were 1 day short, so maybe we’ll see this all illustrated with today’s data, and then maybe we won’t, only the Shadow Knows…

To recap… The currencies rebounded nicely yesterday after the all clear horn had sounded signaling to currency traders that the Big Bad Wolf, I mean PPT, had gone home, for now… The Dollar Index fell on the day from 91.42, to 91.13.  Gold & Silver gained again on Wednesday, with Silver really outperforming its kissin cousin, Gold… Silver gained 2.85% which was equal to 73-cents… Chuck talks about all kinds of things that are piling up against the U.S. financial system, and so therefore you had better not skip to my daisy through the letter and go back to read it! Chuck thinks he might be up for Noble prize… Yeah, as if! HA!

For What It’s Worth…  Well, I mentioned leverage above, and then Ed Steer highlighted an article about how there’s too much leverage, and thought, well, by jove, you’ve got yourself a FWIS article! And so here it is, this is an article about leverage in the U.S. and if you think it can’t come back and bite us in the rear, then let me introduce you to Bill Hauwn of Archegos… Any way, the article can be found here: Stock Market Leverage in La-La Land, Rises to Historic WTF High | Wolf Street

Or, here’s your snippet: “Archegos shows how leverage is the great accelerator of stock prices on the way up, and on the way down. One of its bets, ViacomCBS, after skyrocketing, collapsed by 60%.

Vast, unreported, and at the time unknown amounts of leverage blew up Archegos Capital Management, dishing out enormous losses to its investors, the banks that brokered the swaps, and holders of the targeted stocks. The amount of leverage became known only after it blew up as banks started picking through the debris. ViacomCBS [VIAC] was one of the handful of stocks on which Archegos placed huge and highly leveraged bets, thereby pushing the shares into the stratosphere until March 22, after which they collapsed by 60%.

Archegos is an example of how leverage operates: It creates enormous buying pressure and drives up prices as leverage builds, and then when prices decline, the leveraged bets blow up as forced selling sets in. Most of the leverage in the markets is unreported until it blows up. The only type of stock-market leverage that is reported is margin debt – the amount that individuals and institutions borrow against their stock holdings as tracked by FINRA at its member brokerage firms. Margin debt is an indicator for overall leverage, and it has reached the zoo-has-gone-nuts level.

FINRA reported on Friday that margin debt jumped by another $9 billion to $823 billion in March, having soared by $163 billion in five months, and having exploded by 72% from March 2020 and by 51% from February 2020, to historic highs”

Chuck again… well… looky there margin debt rose $9 Billion more in the past week! But how much of it would have actually been booked if the Initial Margin Requirement was 65%?  I’m betting a free undercoat with your paint job, no wait! I’m betting it would have been a much lower number… the other thing here with this article, is that Bloomberg magazine just arrived the other day with the front page in big block letters: How TO LOSE $20 BILLION IN JUST TWO DAYS!  That’s the damage from the Archegos failure… 

Market Price 4/22/2021: American Style:  A$ .7744,  kiwi .7186,  C$ .7997, euro 1.2045, sterling 1.3894, Swiss $1.0918, European Style: rand 14.2739, krone 8.3975, SEK 8.3975,  forint 301.85,  zloty 3.7798,   koruna 21.4574, RUB 76.71, yen 108.08, sing 1.3278, HKD 7.7594, INR 75.00, China 6.4934, peso 19.92, BRL 5.5676,  Dollar Index 91.06,  Oil $61.02,  10-year 1.57%, Silver $26.43, Platinum $1,209.00, Palladium $2,916.00, Copper $4.29, and Gold… $1,784.80

That’s it for today, Well, not quite… Today is EARTH DAY So let’s go celebrate EARTH DAY! When I was a young hippie with long hair, and wore ragged jeans and wife beater T-shirts, we used to celebrate EARTH DAY at Forest Park flying kites, as a local radio station KSHE provided the tunes… Man, now that I think about that, it was a very long time ago! UGH! Go hug a tree, or lay a kiss on a flower bud… Oh, I know there are real things that people can do, but I’m not here to tell people how to live their lives… My wife has been ill the past two nights, and so that leaves me to make something for dinner… the first night it was pizza, and last night it was chips and salsa… I really know how to live it up, eh? HA!  I’m looking forward to Sunday, Fun day, since that will be the only day in the next 4 that will be worth bragging about… The Cardinals will be playing the Reds, in a day game on Sunday, so I’ll be able to sit outside and watch it! YAHOO! Day Baseball! The Rolling Stones take us to the finish line today with their song: Can’t You Hear Me Knocking?  One of Keith Richard’s best guitar works… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and please, pretty please with sugar on top, Be Good To Yourself!

Chuck Butler