Author: admin

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

April 21, 2021

* Currencies give back some gains on Tuesday & overnight

* Chuck to talk at the Money Show once again! 

Good day… And a Wonderful Wednesday to you! Well, it was April 20^th, and if you looked outside yesterday, you saw snow falling and accumulating on tree limbs and tables… not on the streets though, as they’ve been warmed for over a month now… Strange sight, for sure!  Well, my primary doc was quite pleased with me yesterday… He told me I should celebrate my weight loss, and I said, “but then I would gain it back!” He laughed…  and I said, “ you don’t know how much I love to celebrate things”!  Well, my beloved Cardinals won Monday night, scoring 11 runs, with 4 home runs, and then they struggled to score 2 the next day and lose… UGH! Tyrone Davis greets me this morning with his song: Can I Change My Mind…  Los Lobos did a remake of this song, but nothing beats the original!

Well… guess what? My oncologist called yesterday, and said she needed to change my visit date from this week to next Monday… That means this won’t be THAT short, of a week for Pfennigs! You’re stuck with me for this Tub Thumpin’ Thursday, and that’s that! HA!

When I left you Monday morning, the currencies were forcing the dollar bugs back into the wall boards, and everything looked to be going in the right direction… The dollar was down, currencies and metals were up, the price of Oil was up, and Treasuries yields were down…  And the rest of the day on Monday pretty much played out the same way as it started, with only Gold & silver seeing major price manipulation to end up down on the day.

All the major bullion dealers were present and accounted for at the COMEX window with their respective arms filled with short Gold & Silver paper trades… This was a major effort to stem the price rise of Gold & Silver and it worked, but for only one day, as Gold & Silver rebounded on Tuesday…

On Tuesday, the currencies were still pushing the dollar bugs around most of the day, with the Dollar Index falling to 91.01 at one point, but when you least expect them to show up, they do… The Plunge Protection Team (PPT), that is…  And the Dollar Index rallied to end yesterday at 91.19…  But as I just said, Gold & Silver rallied, with Gold up $7.80 to close at $1,779.80, and Silver up one penny on the day to close at $25.92… After all those short paper trades on Monday, Gold was right back to where it began Monday at $1,779…  I’m just saying…

In the overnight markets… the PPT has made sure that there was more dollar buying, and the Dollar Index has risen to 91.42, with the euro falling to just above 1.20, and the Aussie dollar (A$) losing about 1/2-cent in the overnight trading.. Not all the currencies are losing ground this morning, currencies like the renminbi, real, and krone are still holding to their gains VS the dollar, and adding to them. 

Gold & Silver are up again in the early trading today… Gold is up $6.30, and Silver is up 4-cents…  As Gold creeps toward $1,800 again, one has to wonder when an engineered takedown will occur?  Maybe it will, maybe it won’t… You see, in my opinion, the Cartel heads have to be wanting Gold to rise, as it would fuel inflation fears, and getting inflation to really move does depend on consumer feelings… If they fear rising inflation they will go out and spend now before inflation eats away their buying power, and this will beget even higher inflation rates.. 

So, each time the price manipulators do one of their engineered takedowns of Gold, I can imagine the Cartel heads, banging their respective heads against a wall, and saying, “We told them to lay off these takedowns, why won’t they listen?” 

It’s really a shame that the price manipulators won’t listen… I wish we could get them to listen the same way my dad would get me and my sisters to settle down…  He would walk into the room, and hang his belt on the door knob… That would do the trick!  So… A memo to the Cartel heads, hang a belt on the door knob, and see if they listen then…  

I was going over things I want to talk about for Tomorrow’s virtual Money Show Panel that I will be participating in…  The thing I want to be careful of is not stepping on anyone’s toes… Omar Ayales, for instance is a Gold guru, and has been for many years, so I don’t want to dive into something he might want to talk about.. Pamela Aden is an asset chartist, and I don’t want to go there either…  I need to “stay in my lane”… Hopefully you’ll be able to log onto the show, and hear what I have to say!

The panel is only supposed to last 45 minutes, with 10 minutes at the end for Q&A…  So, I don’t see how I’ll be able to talk much, but… you know me, I’ll get my thoughts across! 

OK… back to the markets…  I was reading the 5 Minute Forecast by Dave Gonigam at Agora yesterday, and he printed something that I’ve talked about before, but this has more defined lines for us, and it refers to the crazy times we live in where things are being priced at outrageous levels for things that nobody needs… This is called the “mania Phase”…  I plan to talk about this tomorrow on the panel, so there’s your teaser…

On Monday’s FWIW I had an article on China allowing Gold imports again, and how much they these Gold Imports were rising… And then yesterday, the folks at GATA sent me a note telling me that Gold Imports in India are up 23% in the last year.. That’s investors looking to buy and own Gold at cheaper prices before it heads higher…

Yesterday, after returning home from the doctor visit, I sat down to read Doug Casey’s International Man article on Empires…  Remember Bill Bonner’s “Empire of Debt” book? Well, these two basically describe the same thing, in that Empires grow to large, deficit spend, raise taxes, and then collapse, Here’s Doug’s 10 steps of an Empires ruin…

1. The reach of government leaders habitually exceeds their grasp.
2. Dramatic expansion (generally through warfare) is undertaken without a clear plan as to how that expansion is to be financed.
3. The population is overtaxed as the bills for expansion become due, without consideration as to whether the population can afford increased taxation.
4. Heavy taxation causes investment by the private sector to diminish, and the economy begins to decline.
5. Costs of goods rise, without wages keeping pace.
6. Tax revenue declines as the economy declines (due to excessive taxation). Taxes are increased again, in order to top up government revenues.
7. In spite of all the above, government leaders personally hoard as much as they can, further limiting the circulation of wealth in the business community.
8. Governments issue bonds and otherwise borrow to continue expansion, with no plan as to repayment.
9. Dramatic authoritarian control is instituted to assure that the public continues to comply with demands, even if those demands cannot be met by the public.
10. Economic and social collapse occurs, often marked by unrest and riots, the collapse of the economy, and the exit of those who are productive.
11. In this final period, the empire turns on itself, treating its people as the enemy.

Chuck again, Doug thinks that the U.S. is now at #8 going on #9…  I would say that I’m in agreement with him 100% on this… Every Empire that has collapsed in the history of Empires on Earth, have all come about by high taxes, currency debasement, and wars… Think about that… 

The U.S. Data Cupboard is still empty today… This is the craziest 3 days of no data that I ever remember seeing before! But it is what it is… And tomorrow, we’ll finally see something in the Weekly Initial Jobless Claims…

To recap… The currencies were going along very nicely pushing the dollar bugs around, until the PPT showed up and put a stop to the currency rally yesterday…  The Dollar Index had fallen to 91.01 before being rescued yesterday and finishing the day at 91.19… And have gotten sold more in the overnight markets… Gold & Silver rebounded Yesterday, from Monday’s truck load of short paper trades that pushed Gold & Silver prices down.  But after three days of trading Gold is right back to where it was Monday morning, before the onslaught of short paper trades… And Gold & Silver are up in the early trading today… 

For What It’s Worth…  Ok, the folks at www.wallstreetonparade.com have uncovered some news that find to be very interesting… It’s about the major banks being told to report to Congress in May for hearings, but not having any news on what the hearings will be about. This article can be found here: Wall Street’s Mega Bank CEOs To Be Hauled Before Congress in May; Nobody Will Say Why (wallstreetonparade.com)

Or, here’s your snippet: “We’ve been closely monitoring the Senate Banking and House Financial Services Committees for the past 15 years. We can think of no other time when the Committees issued a joint statement to announce they were hauling the most powerful men on Wall Street to testify, without offering a scintilla of information on the topic of the hearing.

The press statement simply indicated that the Senate Banking Committee would hold its hearing on Wednesday, May 26 at 10 a.m. and the House Financial Services Committee would hold its hearing the following day on Thursday, May 27 at 12 noon.

The announcement indicated that the following CEOs are scheduled to testify: Jamie Dimon of JPMorgan Chase; David Solomon of Goldman Sachs; Jane Fraser of Citigroup; James Gorman of Morgan Stanley; Brian Moynihan of Bank of America; and Charles Scharf of Wells Fargo.

The joint press release did not give a title for the hearings nor the topic for the hearings. There is nothing on the websites for either Committee that sheds any further light on the matter.

The only conclusion that we can draw is that more than a month before the hearings are set to be conducted, the Chairs of these two Committees – Senator Sherrod Brown (D-OH) and Maxine Waters (D-CA) – wanted to send a message to Wall Street’s CEOs that they have them in their crosshairs.”

Chuck again.. my guess is that Congress wants to know about the Archegos failure… But then maybe, just maybe Congress will grill them like a well done steak, and get some answers from this group, eh? Yeah, like that could happen, Chuck… you know better than to even suggest that Congress would do their duty and get answers from these guys… The Congress I know is too yellow bellied, and naive…  I’m just saying… 

Market prices 4/21/2021: American Style: A$ .7714,  kiwi .7175,  C$ .7917, euro 1.2008, sterling 1.3898, Swiss $1.0893, European Style: rand 14.2768, krone 8.3861, SEK 8.4583,  forint 302.25,  zloty 3.7954,   koruna 21.5628, RUB 76.53, yen 108.04, sing 1.3306, HKD 7.7622, INR 75.52, China 6.4960, peso 19.90, BRL 5.5442,  Dollar Index 91.42,  Oil $60.91,  10-year 1.56%, Silver $26.09, Platinum $1,194.00, Palladium $2,851.00, Copper $4.26, and Gold… $1,786.10

That’s it for today, except to send out a GREAT BIG HAPPY BIRTHDAY to my good friend, Frank Trotter! Frank is 11 months older than me. I recall years ago, when Frank was going to turn 50, his wonderful wife, Carol, asked me to send out a request to all his contacts to send him Happy Birthday emails, and on his birthday, his email box was filled with HB notes! Then when I turned 60 Frank returned the favor sort of, he sent out to some contacts of mine and asked them to send their notes to him, and then he put them all in one message, printed it and gave it to me… Frank was and is, the smartest man in the room, any room, any takers. And I’m so glad that we got to know each other way back in the 80’s at Mark Twain Bank! So… Happy Birthday, Frank!  With my new schedule I’ll be back tomorrow, full of you know what and vinegar, so be sure to tune in for that! HA! Well the snow stopped yesterday afternoon and the sun came back out! What a weird day for sure! A Flock Of Seagulls takes us to the finish line today with their song: Space Age Love Song…  “I saw your eyes, and you made me smile. For a little while, I was falling in love” I hope you have a Wonderful Wednesday, and have some birthday cake for Frank! And I also hope that you will Be Good To Yourself!

Chuck Butler

April 19, 2021 

* What’s it gonna be boy, inflation or deflation?

* Gold & Silver move higher once again.. 

Good day… And a Marvelous Monday to you… Not a great weekend for St. Louis sports teams. The Cardinals lost 2 of 3 to the Phillies, and the Blues blew a 2 goal lead to lose Saturday night. The Blues are now out of the playoffs, but 13 games remain, so they need to lace up the skates, and get to work! The weather here turned chilly, and I received a freeze warning for Tuesday night here… Crazy April weather! Back in the day… I was appointed by the football coach to go with a couple of my teammates and attend a banquet and accept our trophy for winning the PHL football Championship the previous fall… It was April and it snowed a few inches, that night, making the drive home a little treacherous given I was driving my dad’s station wagon that night! Just a prelude for what I would experience living in Des Moines, Iowa a few winters later! Blind Faith greets me this morning with their rock classic song: Can’t Find My Way Home…   ( I love this song!)

Well… how was your weekend? The highlight of my weekend was that little Evie and brother Braden came to stay with us Saturday night… She’s 18 months old now, and she bring me books to read to her, so darn cute! Longtime readers will recall me carrying on about my first grandchild, Delaney Grace back in the day… Love them all to pieces!   Ok… I know, I know, I seem to beating around the bush before taking on today’s letter… So, I guess there’s nothing else I can ditter about… So, here goes!

The Currencies put in a good week last week, ending the week on a a strong note, and pushing the dollar bugs back to the wall boards they crawled out of…  The Dollar Index began the week, last Monday at 92.02, and ended the week at 91.55…  And since the euro is the most heavily weighted currency in the Dollar Index, the euro was the main mover during the last half of the week, and ended the week getting even closer to the 1.20 level…  The Aussie dollar (A$) and kiwi, aka the antipodeans, had very good week, along with the Petrol Currencies.

Gold & Silver also got on board with the kicking sand in the face of the dollar bugs. Gold started last week at 1,744.20 and ended the week at $1,777.50, up $12.90 on Friday…  But that’s only half the story regarding Friday’s upward movement…  About halfway through the day, Gold was flying high and appeared it could breach 1,800, and then the rug was puled out from the shiny metal, as the price manipulators showed up at the COMEX with arms full of short Gold paper trades…

The same held true for Silver… Silver started the week at $25.27, and ended the week at $26.50, up just 13-cents on the day, but as I said above, was knocked down at the end of the day, by the price manipulators…

I think this is good place to remind you dear readers that I’ll be appearing along with my publishers, Mary Anne and Pamela Aden, and Gold guru Omar Ayales this Thursday April 22^nd, at 4:30 pm EDT, and it will be virtual, so here’s link for you to sign up to view it: https://online.moneyshow.com/2021/April/money-metals-and-mining-virtual-expo/registration/?scode=052516

This will be a Big Deal for yours truly, because I’ve not been a speaker for 5 years now… I’m wondering if I still “have it”…

In the overnight markets…. the dollar has been led to the woodshed, and we start the week with the Dollar Index at 91.10, almost 100 bps from where we started last week! The euro has pushed higher into the 1.20 handle, and it’s as though there’s no stopping the A$ and kiwi from moving higher these days…  Gold & Silver are basically flat in the early trading today with Gold up $2 and Silver 4-cents… 

OK… So, everybody’s talking about whether we are going to see inflation or deflation will continue… There are so many things like shipping prices have gone up 50%, and World Food Prices have gone up 10%, rising for the 3^rd consecutive month in March… that point to inflation, but then there’s the lack of wage inflation, and some other things that balance out the argument either yay or nay…  The thing that I keep in the back of my mind on this argument is what I talked about in the February 11, Pfennig, let’s listen in : (systemic inflation) is that the economy cools down. Fake money, false price signals, regulation, bubbles, giveaways, and COVID-19 shutdowns could simply cause a cutback in buyable output… while the supply of available money continues to rise.

So that would throw out the need for wage inflation, but in the end, inflation is what the Fed wants, and the Gov’t needs to reduce the value of the dollar by inflation, to pay back debts with weaker dollars… making $20 bills, $5 bills…   So, by nook, crook and cranny, the Fed will get what they want and the Gov’t needs, eventually… And while 2021 might just be building blocks for the coming inflation, that will hit our shores in earnest in 2022…

Oh, and one more thing… don’t look now but Copper has really jumped higher and is trading at $4.31 this morning, indicating that inflation is all around us… 

Ok… above I talked about the price manipulators, and the this weekend I received this email from the good folks at GATA, that I’m going to give you a snippet of here, so this is from GATA and here goes:

“Chris Marcus of Arcadia Economics has assembled a compelling list of questions about what seems like the indifference of the U.S. Commodity Futures Trading Commission to misconduct and manipulation in the silver market, which the commission is supposed to regulate.

Marcus is undertaking to raise $100,000 via GoFundMe.com to be donated to a charitable cause if the commission answers his questions, or possibly to be used to sue the commission if it refuses to answer.

Of course the CFTC isn’t likely to answer any important questions about misconduct and manipulation in the monetary metals market, in light o f the overarching question it has repeatedly refused to answer for GATA and for U.S. Rep. Alex X. Mooney, R-West Virginia:

That is, does the commission have jurisdiction over manipulative trading undertaken by or at the behest of the U.S. government or governments trading with the approval of the U.S. government?

Indeed, the architecture for manipulative trading for or with the authorization of the U.S. government long has been in place in plain view, just not widely understood. They are:

— The U.S. Treasury Department’s Exchange Stabilization Fund, which is authorized to manipulate and rig not only all markets in the United States but all markets in the world, quite without the approval of the governments with direct responsibility for those markets:”

Chuck Again… That sounds promising doesn’t it? But don’t expect any miracles here, like the CFTC fessing up or even answers the challenge… I think that the CFTC will ignore it, just like they have all other attempts to come clean. But to me this tells us more if they don’t fess up… It tells me that they are hiding something BIG…

OK… countries all over the world, sans Russia, and Singapore, are experiencing the same problems as the U.S. too much debt…  And all of them are looking for ways to inflate their economies to lessen the pain of the debts they have accumulated, with more on the way probably!  The Reserve Bank of Australia came out and said something about leaving interest rates unchanged until wages begin to rise… I’m sure that’s the mantra for most of the Central Banks of the World…

The problem with wages is that they haven’t been a strong component of inflation since the 60’s…  What makes anyone think that they will suddenly become a major player in inflation again?  The U.S. has a real problem right now… There are probably 90 Million people that don’t want to work any longer, they get unending unemployment benefits, while receiving a bonus stimmy check about every 3-5 months… There’s no push to work any longer and that will keep wages under wraps for some time to come… I’m just saying… 

But, as I always say… The U.S. is supposed to be better than the other countries of the world, because they are the caretakers of the reserve currency of the world… Instead of being better than the other countries, for the most part they are worst, debt wise…

Speaking of debt…  Publishing guru, and best selling author, Bill Bonner, had this little tidbit about our debt, and I’ll let Bill take it from here: “In March 2021, the feds collected some $267 billion in tax receipts. But they spent $927 billion – a new record. And a record monthly deficit of $660 billion, approximately equal to the entire U.S. annual budget during the Ronald Reagan administration.

Not only do income and outgo not match… they’re never going to get together.

Losing money at this rate implies a loss for the year of about $8 trillion… More likely, March was an outlier, and the loss will be “only” about $3-$4 trillion, still far more than can plausibly be borrowed.

And this is on top of other big numbers that don’t add up, either.” Bill Bonner… www.rogueeconomics.com

The U.S. Data Cupboard last week has a couple of surprises for us… First off the weekly Initial Jobless Claims fell to 576,000 the previous week, and were being hailed as a sign the economy is roaring again, but… did these spin doctors stop to think that the previous week was a day short because of Easter Monday in many locations? I’m just saying…  Then we had a Big number from Retail Sales for March as they rose 9.8% VS the -2.7% in Feb… That’s a big turnaround, but then we, as consumers did begin to get our stimmy checks in March now didn’t we? What will be the follow up here?  I’m thinking it won’t be anywhere near 9.8%!  Then Industrial Production for March was up 1.4%, but that didn’t meet expectations, nor did it reverse Feb’s -2.6%… And Capital Utilization (CAPU), rose to 74.3 from 73.4. Recall last week I questioned the call for a rise to 75.5?

And that was all last week’s late week data… But this week’s data is a non-event, at least for the first 3 days this week, there are no data prints, none, nada, nil, zilch, a big fat goose egg!  So… until we get to Thursday this week, which by the way won’t be a Pfennig day, we won’t see any data…

To Recap… The Currencies and metals had good performances last week… And in the overnight markets   there was more dollar selling, with the Dollar Index falling to 91.10. Chuck talks about the argument between the inflationists, and the deflationists and gives points of view from both sides…  He also talks about debt in the countries around the world, and Bill Bonner adds his 2-cents!  There is also the price manipulation talk that just continues on and on and on and on…

For What It’s Worth… I first saw this article this weekend in a GATA release… Then, I saw it highlighted in Ed Steer’s letter this weekend, and then when I was reading the latest edition of Grant Williams’ Things That Make You Go Hmmm, he had highlighted it, and I knew then that I had to use it today in the FWIW… It’s an article about how China’s economy has recovered and is importing Gold again, and this should all be good for Gold, and it can be found here: Exclusive: China opens its borders to billions of dollars of gold imports – sources (yahoo.com)

Or, here’s your snippet: “China has given domestic and international banks permission to import large amounts of gold into the country, five sources familiar with the matter said, potentially helping to support global gold prices after months of declines.

China is the world’s biggest gold consumer, gobbling up hundreds of tonnes of the precious metal worth tens of billions of dollars each year, but its imports plunged as the coronavirus spread and local demand dried up.

With China’s economy rebounding strongly since the second half of last year, demand for gold jewellery, bars and coins has recovered, driving domestic prices above global benchmark rates and making it profitable to import bullion.

The local premium is now about $7 to $9 an ounce, according to gold traders in Asia, and would probably have increased further if more imports to satisfy demand had not been allowed.

About 150 tonnes of gold worth $8.5 billion at current prices is likely to be shipped following the green light from Beijing, four sources said. Two said the gold would be shipped in April and two said it would arrive over April and May.

The bulk of China’s gold imports typically comes from Australia, South Africa and Switzerland.”

Chuck again… Gold can use any help it can get to get back firmly on the rally tracks! But I want to point out that this could go a long way toward what I described China doing with all their Gold, many years ago… And that is to issue a Gold backed currency…  I’m just saying… 

Market Prices 4/19/2021: American Style: A$ .7772,  kiwi .7187,  C$.8005, euro 1.2035, sterling 1.3935, Swiss $1.0944, European Style: rand 14.2279, krone 8.2863, SEK 8.3885,  forint 299.25,  zloty 3.7760,  koruna 21.5195, RUB 75.58, yen 108.15, sing 1.3305, HKD 7.7666, INR 74.84, China 6.5193, peso 19.84, BRL 5.5865,  Dollar Index 91.10,  Oil $62.98,  10-year 1.58%, Silver $26.09, Platinum $1,214.00, Palladium $2,889.00, Copper 4.31, and Gold $1,779.10

That’s it for today… Quite wordy today, but it’s been a few days without a Pfennig, so there was some catching up to do!  So… as I told you last week, I now have two Dr. Appts. This week… So, no Pfennig tomorrow, and then I’ll be back on Wednesday, and then no Pfennig on Thursday… So, in other words, a short week for Pfennigs… Thursday is my visit to my oncologist whom I’ve not seen for 4 months, should be an interesting visit… I can and can’t believe the weather is going to be cold this week… If I didn’t have these Dr. Appts. This week I would be on a plane back to Florida, where it was 90 on Saturday! It was so chilly here that there was no driveway Happy Hour last Friday! And this Friday there won’t be one either, unless the weather takes a U-Turn! My beloved Cardinals now head to the Capital to play 3 games before returning home. I just don’t get how they can score 9 runs one day, and get shut out on 2 hits the next game… UGH!  That’s 3 times in the past week they were shut out!  Double UGH! The Hooters takes us to the finish line today, with this 80’s hit song: All You Zombies…  “All you zombies hide your faces, all you people in the street”… I hope you have a Marvelous Monday today, and will BE Good To Yourselves!  (talk to you Wednesday)

Chuck Butler

 

April 15, 2021

* Currencies & Oil rally on Wednesday… 

* Margin Debt is soaring once again, we had better beware… 

Good day… And a Tub Thumpin’ Thursday to you!  Well, the visit to the heart doc went well yesterday. My heart is functioning better, and is much stronger than when he first saw me in 2017…  That was right after I had been on huge doses of steroids for over a year, and apparently they did major damage to my heart… But that’s all in the past now, and with me losing weight, should be much better going forward.  We had a wonderful dinner last night at a restaurant, where we met Grace’s mom, Lori… What a Southern Belle! For those of you not keeping up… Grace is youngest Son, Alex’s steady girlfriend, now for about 4 years!  Grace is from Arkansas… and was the alternate rifle shooter at the Rio Olympics… So, I don’t mess with her! HA!   But what a joyful evening with my kids,  and little Evie, and getting to meet Lori…  Kansas greets me this morning with their song: Song For America…  It’s a rock classic that’s over 9 minutes long!

Well, the currencies sure did like the fact that I was away for the day yesterday… Just like in the days of old they rallied while Chuck was away!  The dollar started the day getting sold and ended the day getting sold and all points in-between getting sold… The Dollar Index which ended the day on Tuesday at 91.93, and ended the day on Wednesday at 91.62… We’ve seen this drop in the Dollar Index before and every time it looks like it’s headed to the deep south, the Plunge Protection Team (PPT) steps in and buys dollars to protect it, and then we have to put up with a week or so of the Dollar Index heading higher, but has been the recent trend, it turns around and heads south again eventually…

Yesterday’s dollar selling was brought about curtesy to the strong & stupid CPI (consumer price index/ or consumer inflation whichever you care to call it) Here’s a snippet of the report I received from the folks at MarketWatch.com “Consumer prices rose in March for the fourth month in a row and the pace of inflation hit the highest level in two and a half years, underscoring new pressures emerging on the economy as the U.S. recovers from the coronavirus pandemic.

The consumer price index jumped 0.6% last month, the government said Tuesday, spearheaded by the rising cost of oil. Economists polled by Dow Jones and The Wall Street Journal had forecast a 0.5% increase in the CPI.

The rate of inflation over the past year shot up to 2.6% from 1.7% in the prior month, marking the highest level since the fall of 2018.”

Ok, this is what I was talking about earlier this week about how the numbers are going to be skewed because of the base numbers being during the pandemic…  President Biden echoed the words of Cartel Chair, Jerome Powell, yesterday, saying that he believed inflation will only be temporary… Ahhh, even the president gets to play spin doctor, eh?  This is where I’m torn between two lovers… While I firmly believe that inflation is here and spreading like wildfire, I’m torn because actual wages in the U.S. have fallen for 3 consecutive months, and that’s deflationary… So, something has to change there for me to be “all-in” on inflation staying…  If I were a gambling man, I would bet on inflation coming and staying awhile… I’m just saying…

So, let’s see… Monday Gold was down, Tuesday Gold was up, and Wednesday Gold was down, so it’s Gold’s turn to have an up day! UGH!   Gold dropped in price by $9.40 yesterday to close at $1,737.40. And Silver was up 7-cents to $25.50…  I’m thinking that everyone including all traders haven’t gotten the memo from the Cartel that they have started their Yield Curve Control (YCC)…  Don’t look now but the yield on the 10-year Treasury has now fall to 1.59%… It was just two weeks ago that people were celebrating the 10-year’s yield at 1.80%…  

I have to feel that once everyone gets on board that the Fed is buying so many bonds to keep yields from rising that Gold will finally get back on those rally tracks it was on last year, when it climbed to $2,000…  At least that’s what I’m thinking will happen… 

Dodododododododo…  we just went back in time to last year, when the yield on the 10-year treasury was .76%, and Gold was rising daily… But then the bond traders began seeing signs of rising inflation, and the next thing we knew the 10-year’s yield was back to 1.00%, and Gold was off the rally tracks…  OK, now we can go back to the future…

OK… onto other things… While the euro was rising within the 1.19 handle, the price of Oil was also rallying yesterday, gaining almost $3 in price, to $62.95..  so we had two of three anti-dollar assets moving higher VS the dollar.. The third anti-dollar asset, Gold… wasn’t able to join its peers… One of these days Alice…. To The Moon!

In The overnight markets…. the dollar selling has abated, and the Dollar Index, this morning, is still 91.62… So no movement overnight in the currencies, but… As I said above today is Gold’s day to rally, and it is in the early trading today Gold is up $13.10, and Silver is up 18-cents, so a good day for these too so far, but I would certainly like to see these early gains get added to as the day goes one… 

The rise in the price of Oil has the Petrol Currencies all lathered up and their jeans pressed tight for a good night! The beaten and battered Russian ruble has even joined in on the Petrol Currencies rally…  Shoot Rudy, the Mexican peso is below 20! 

And recently a dear reader wanted to know why I don’t talk about the Aussie dollar and kiwi any more, or like I used to?  Well, here you go… After looking like the A$ might begin a ride on the slippery slope, it has turned around and is now on the rally tracks again, along with its kissin’ cousin across the Tasman, kiwi… 

The Fear Factor is still upon us folks… Just when folks were beginning to come out from under their rocks that they have confined themselves to for over a year, there had to be something the powers that be, could bring up that would induce them to go back under their rocks…  I’ve had it with all this keeping us under lock & key and not living our lives…  We live with risk every day! The moment you walk out of your house each day you’re taking a risk, when you start your car you’re taking a risk… The world just needs to accept the risks they are willing to live with, and move on with their lives, and not be influenced by the Fear mongers…  I’m just saying!

OK, sorry about that tangent… I have no idea why I began to type that and before I knew it, the paragraph was finished, and now I have to somehow get back to the markets… Let’s see how that goes! HA! 

So… today is the day… The day when we get a plethora of economic data… First up with the Usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims… This data has seen weekly claims rise the last two weeks… One has to wonder what today holds?    Next up is Retail Sales, and like I said on Monday the BHI tells me that while there may be a recovery of Retail Sales in March, it’s not going to be anywhere near what March usually holds for us in regards to Retail Sales…   Then we’ll see the color of Industrial Production and Capacity Utilization…  IP is supposed to rebound from Feb’s negative -2.7% print, and CAPU is supposed to rise to 75 from 73…   Hmmm….

OK riddle me this Batman… if for the most part businesses especially in Manhattan, are finding that having employees working from home isn’t exactly ideal, but works, and they’re staying with it for now, why would these same Businesses be spending money on Capital improvements, when no one is going to be there to use them?  Because that’s what the so-called experts are telling us is happening by forecasting a big rise in CAPU…

There are a few other data prints today, that don’t really move markets, so we’ll just leave them at the side of the road, in hopes that someone picks them up!

To recap… Chuck was away, so the currencies rallied yesterday, and the price of Oil rose, but Gold lost $9.40 on the day, while Silver rose 7-cents.. . The dollar got pummeled by the strong and stupid CPI print that showed year on year consumer inflation at 2.6%… But as I explained earlier this week the year-on-year numbers are going to skewed because the base being used is last year during the height of the pandemic.  And Chuck goes off the deep end this morning with a discussion that belongs on the Butler Patio, and not in the Pfennig! Oh well, whatcha gonna do when the money is all gone?

Before we head to the Big Finish today, there’s something else I want to talk about… On Tuesday it was reported that margin debt in the U.S. markets has reached $814 Billion, That’s Billion with a Capital B!  Longtime readers may remember me telling them in a past life I ran a margin Dept for a Midwest Brokerage Firm. I was the youngest person to hold that position ever in that company!  But I digress…  So, I know all about margin, how it works, and where the pressure points are…   Ok, having said that, let me also say that, the last time Margin Debt grew that much was in 2007, before the Great Recession. And the time Margin Debt grew that much before that was 1999, just before the dot com implosion.

Doesn’t that give you the willies?  It does me… And I can hear the margin clerks now calling investors on the phone and telling them their account fell below min. Margin, and they need to deposit stock or money to meet the margin call, or else… They will begin to sell stocks to bring the account back into regulation…   Those are NOT calls you wan to be taking folks…  so this is a public service announcement, to remind you to have those stop losses updated!

For What It’s Worth…  Anything you can do I can do better… Sing that song and it’ll be in your head the rest of the day… I say that because it appears that President Biden has sung the song, and is now proving he can do better… This article talks about the debt explosion in March, and it can be found Here: March Deficit Blowout: US Spends 3.5x More Than It Brings In; YTD Deficit Is Biggest Ever | ZeroHedge

Or, here’s your snippet:” The Covid crisis may be over (with nearly 60% of the population vaccinated, one would certainly hope it’s over), but covid crisis spending is here to stay.

At 2pm, the Treasury released its latest Monthly Treasury Statement which showed that in March, the US budget deficit exploded once again, surging to $660BN, up five-fold from a tiny $119BN last March, driven by a 160% increase in government Outlays which soared to $927 billion – the third highest on record – from $355.7BN a year ago, and from $559.2BN in February.

The large spike is primarily due to the stimulus checks released to households after the passage of the American Rescue Plan (ARP) Act which totaled $339bn and included forgiveness of roughly $87bn in Payroll Protection Program (PPP) loans in March. In total, the government spent $453bn on “income security” in March, with social security ($94BN), Commerce and Housing Credit ($81BN), Health ($71BN), National Defense ($70BN) and other spending far in the rearview mirror.”

Chuck Again…  It’s a race to see who can outspend who… And we, U.S. taxpayers will feel the pain of all this deficit spending in the coming years…

Market Prices 4/15/2021: American Style: A$ .7751,  kiwi .7166, C$ .8000, euro 1.1970, sterling 1.3797, Swiss $1.0832, European Style: rand 14.2100, krone 83860, SEK 8.4593,  forint 299.71,  zloty 3.8052,   koruna 21.6626, RUB 75.76, yen 108.77, sing 1.3341, HKD 7.7677, INR 74.98, China 6.5316, peso 19.95, BRL 5.6957,  Dollar Index 91.62,  Oil $62.75,   10-year 1.59%, Silver $25.68, Platinum $1,196.00, Palladium $2,796.00, Copper $4.16, and Gold… $1,750.50

That’s it for today…  Well, our Blues couldn’t stand the heat of an important game last night, even though they rallied in the 3^rd period, they couldn’t win… UGH!  And after scoring 14 runs on Tuesday night, my beloved Cardinals got shut out in yesterday’s day game… I drowned my sorrows with a zero sugar Gatorade last night… UGH!  But seriously, these outcomes were all forgotten about while I had that joyful dinner last night! My primary doc sent me a note yesterday saying he wanted to see me next week… So now I have two  doctor appts next week! Then I’m finished with doctors this month! Reminds me of that old PeeWee Herman skit… I say we shoot ‘em, I say we shoot ‘em then hang them, I say we shoot ‘em, then hang ‘em, and then kill them… And Pee Wee says, I say let him go! HAHAHAHAHA I was a huge fan of Pee Wee Herman, until…  My Cardinals play this weekend in Philly VS the fighting Phils… with all their high salaried players…  Billy Squier takes us to the finish line today with his song: In The Dark…  send me a note if you’re still reading, OK, Bill?  I hope you have a Tub Thumpin’ Thursday, a Fantastico Friday tomorrow, and a Wonderful Weekend, and please Be Good To Yourself…

Chuck Butler

April 13, 2021

* Currencies & metals lose ground on Monday

* Yellen says China is not a currency manipulator! 

Good Day… And a Tom Terrific Tuesday to you! Well, I do believe the pool deck workers have finally finished, but we can’t walk on it until tomorrow… That means I have to find a different place to sit out and read…  My beloved Cardinals are proving me to be correct, with my Spring Training thoughts about how they can’t hit… They are in need of a Big Bat, lefthanded preferably, that plays the outfield… Chances are… They’ll still be needing that at the end of the season! UGH!   Our Blues had their game postponed last night, and next play in Colorado on Wednesday. There aren’t a lot of what you would call Big Games in hockey’s regular season, but… Tomorrow night’s game is a Big Game for the Blues… Yes, greets me this morning with their song: It Can Happen… 

Well the dollar bugs fought back yesterday, and the dollar saw it’s best day in a week… the moves weren’t strong moves, but moves in the dollar’s favor nonetheless…  The euro dropped back below 1.19, and the Dollar Index rose from 92.02 yesterday morning to close at 92.21…  And Gold & Silver didn’t help any VS the dollar, as Gold lost $11.60 on the day to close $1,733.70, and Silver lost 47-cents to close $24.88…  The Gov’t is spending currency like there’s no tomorrow, the Cartel is printing currency like there’s no tomorrow, and the current debt is more than $28 Trillion, and the all-time best safe haven asset (Gold) is getting sold… Go figure…

In the overnight markets… There hasn’t been much movement in the currencies, as evidenced by the Dollar Index, which is trading at 92.24 this morning up from last night’s close of 92.21…  Silver is outperforming Gold this morning, with Silver up 16-cents in the early trading, while Gold stumbles out of the starters’ gate, down $2.90…  

Well…  Yesterday, I wrote about how we needed to be on the lookout for how the inflation rate is calculated on a year -on-year basis, because of the awful prints in the early months of the pandemic, and guess what the good folks at GATA sent me yesterday? An article on Bloomberg talking about that same thing… I got this from: https://www.bloomberg.com/news/articles/2021-04-12/simple-math-is-about-to-cause-an-inflation-problem-quicktake  And here’s a quick snippet from the article:

“No economic question is being debated more right now than whether the United States will see a sharp rise in inflation. But the answer for the next few months is simple: Yes.

Due to the way the government’s inflation metrics are calculated, what will appear to be significant price increases are all but guaranteed. The phenomenon is known as the base effect, a term worth keeping in mind when new figures make the argument even wilder.”

Chuck again… Crazy how that works isn’t it… Makes me wonder, do the folks at Bloomberg read the Pfennig? Nah… That couldn’t happen, they’re the Big Boys, they don’t need to read the Pfennig!

But if they did… That would be a hoot and half!

OK.. So… Treasury Sec. Janet Yellen, announced yesterday that the U.S. would not name China a currency manipulator…  Boy I can see the Chinese back slapping with congratulations for each other on what a great job they did, hiding their currency manipulation from the U.S. !   HA!  Well, no, really I see them saying, “so what”… “Who cares”…  We’re China and we do what we want to do whether the U.S. agrees with it or not”… So, the renminbi rallied on the day after the announcement… Hmmm…  You know I think I’ve told you this before, but stay with me here… My dad used to tell me that China was a sleeping giant, and the world would behoove itself to not wake them up…  Well, we woke them up about 20 years ago… And ever since, they’ve been out to gain governance of the world!

Speaking of China…  Long ago, and oh so far away, I fell in love with you, before the second show… OMG! Quit that Chuck!  OK… so long ago, I told people that China was gaining a wider distribution of their currency by having these currency swap agreements signed between China and its trade partners, and that a wide distribution of their currency was the first step to gaining a reserve status for the renminbi. The other BIG Step was to have a bond market, that their trade partners could invest their profits in and not have to convert their renminbi holdings to dollars to buy U.S. Treasuries…

Well, yesterday, I was reading the “5” by Dave Gonigam, (Five Minute Forecast)  and came across this bit of information from James Rickards… “China is also creating a Chinese yuan bond market so the countries who earn trade surpluses in yuan will be able to invest in yuan-denominated government bonds instead of being forced to buy U.S. Treasuries.”

Chuck again… all I have to say to that is… Uh-Oh, spaghetti O’s…  (for the dollar!) Now, it will take China a few years to get up and running with a bond market folks, things like this do not happen overnight, but this is just another in the long run of things that will act as a gauntlet for the dollar down the road…

And things in Russia/ Ukraine seem to be heating up again… The last time these heated words turned to armed action, the ruble got whacked badly, and this time, the ruble is already getting whacked because traders are certain that these heated words will turn to armed action once again… For all of you who own rubles, I would simply say that this is a time to batten down the hatches, and don’t open the hatches to look out until the all-clear horn has sounded…  Well, that’s what I’m going to do with my rubles… I’m just saying…

Ok, yesterday I told you I had a graph that showed the loss of buying power in the dollar through the years that the Cartel has been around… And since I can’t get it on the letter I’ll give you the items and let you see it that way… 

A dollar, in 1931 would buy 30 Hershey Bars it would cost you $26.14 today

A dollar, in 1922 would buy 10 rolls of Toilet paper, it would cost you $15.14 today

A dollar, in  1923 would buy 10 bottles of beer, it would cost you $19.91 today (unless you at the ball park where 10 bottles of beer would be $100!

A dollar in 1944 would buy 20 bottles of Coke, it would cost you $14.71 today

A dollar in 1964 would buy you 1 drive-in movie ticket, it would cost you $8.35

There are more but these really show the loss of buying power in a Big way… courtesy of the Cartel’s monetary policies through the years, and Congress’s inability to to rein in deficit spending…

I’m sure you have some examples of loss of buying power too… Because as I’ve always said, inflation is a personal thing…

OK… well the U.S. Data Cupboard last Friday has the March PPI (wholesale inflation), which surprised everyone in the markets, but not me, by rising at the fastest annual rate since 2011! The 1.0% monthly rise should be an indicator of how strong CPI (consumer inflation) will be, because, I don’t think Companies can not afford to not pass on the price increases they’ve received to consumers…

And this morning the stupid CPI will print… There’s no telling what the stupid CPI will print, because of all the hedonic adjustments that are made to it before it gets ready for prime time…

To recap…   The dollar bugs fought back on Monday, and the Dollar Index rose to 92.21 from 92.02… Gold & Silver lost ground on the day, as well as the euro which fell back under the 1.19 figure on the day. Chuck talks some more inflation today… And also talks about China being left off the list of currency manipulators, along with a batten down the hatches warning for rubles.. . And the overnight markets didn’t bring about any change, although the buying of dollars was muted so to speak… 

Before I head to the Big Finish today, I just wanted to give a head’s up on something I will most likely be talking about tomorrow… Long time Reader Bob, sent me a link to a talk by Catherine Austin Fitts, who I like to listen to, and she’s going to be talking about “The Great Currency Reset”…  I didn’t have the time to listen this morning, so that’s my charge for today! 

For What It’s Worth…  Well, it’s been a couple of weeks since I highlighted an article by Pam and Russ Martens of www.wallstreetonparade.com . They do such a great job of researching and digging into stuff that most journalists just forget about… Well, this article is about the Jerome Powell interview on 60 Minutes, and it can be found here: Fed Chair Jerome Powell Goes on 60 Minutes to Present a False Narrative on Mega Banks He Supervises Loaning Out their Balance Sheets to Hedge Funds (wallstreetonparade.com)

Or, here’s your snippet: “The CBS “investigative” program, 60 Minutes, gave Wall Street a pass again last night.

This time around 60 Minutes’ host Scott Pelley interviewed Federal Reserve Chairman Jerome Powell. The Fed, and by extension, Powell, are in charge of supervising the holding companies of the mega banks on Wall Street, including those involved just two weeks ago in loaning out their balance sheets to the tune of tens of billions of dollars to a hedge fund run by a man previously charged with insider trading and stock price manipulations. The man is Sung Kook (Bill) Hwang and the hedge fund is Archegos Capital Management. (Fed-supervised mega banks loaning out their balance sheets to hedge funds for nefarious purposes was previously exposed in 2014 in an in-depth report and hearing by the U.S. Senate’s Permanent Subcommittee on Investigations. The practice has clearly metastasized since that time.)

The 60 Minutes interview comes just two weeks after Archegos blew itself up, along with generating billions of dollars in losses at the mega banks that allowed it to take on obscene levels of leverage in a replay of the financial crisis of 2008 – something that the Fed has continuously assured Americans could not happen again under its oversight.

Rather than dig deep into the insidious rot of the Fed as a lapdog regulator, Pelley devoted just a brief and shallow part of the interview to the topic of what happened at Archegos. ” (failed hedge fund that’s been in the news) 

Chuck again… OK, this is a very good article, and has a transcript of a question the interviewer asked Powell… Powell claims that “this incident doesn’t really raise questions about the stability of the financial system or of those institutions, which are mostly foreign banks.”

Yeah, what did I tell you yesterday, to get used to the Gov’t and Cartel selling you snake Oil?  This is a hefty dose of snake oil folks… 

Market Prices 4/13/2021:  American Style: A$ .7601,  kiwi .7021, C$ .7926, euro 1.1891, sterling 1.3723, Swiss $1.0812, European Style: rand 14.6323, krone 8.5581, SEK 8.5846,  forint 301.97,  zloty 3.8341,  koruna 21.8667, RUB 76.36, yen 109.37, sing 1.3433, HKD 7.7736, INR 75.42, China 6.4889, peso 20.17, BRL 5.6877,  Dollar Index 92.24,  Oil $60.03,  10-year 1.68%, Silver $25.05, Platinum $1,173.00, Palladium $2,760.00, Copper $4.05, and Gold… $1,730.80

That’s it for today… and tomorrow… Yes, sorry about the short notice, but… no Pfennig tomorrow, as I have an appointment to see my heart doctor bright and early in the morning tomorrow. The last time I saw him he told me the good news that my heart function had improved from 60% to 85%… I would have to think that it’s gotten even better with my recent weight loss!  We, here in the Midwest will be getting chilly days for the next 10 days! UGH!  I want to go back to Florida, where it’s 80 and sunny! I sit around with a sweatshirt on all day and evening… Too darn chilly for me! Next week I go to see my oncologist, and then I’m finished with doctors for this month! It’s April, the weather is chilly, and we’ve got our pool open and ready to go…  UGH!  Same as last year, but last year was quite different, with the plandemic going on… That wound I received on my arm last Monday, is taking its sweet time healing. UGH!  Mama’s Pride takes us to the finish line today with their song: Blue Mist…  Mama’s Pride was a St. Louis band back in the day… And I always loved this song!  I hope you have a Tom Terrific Tuesday today, and will be Good To Yourself!  (remember! No Pfennig tomorrow!)

Chuck Butler

 

April 12, 2021

* Dollar Index continues to head downward… 

* Chuck talks about inflation today… 

Good Day… And a Marvelous Monday to you! The weather over the weekend turned chilly once again, as I’ve said before April’s weather is a crapshoot…  But Friday was marvelous, weather wise, and I held a driveway happy hour, for neighbors and friends, and… My old World Markets Desk… All the folks, except one, made it out to my little river town, and we sat out, and got to see each other face to face and have some great conversations! Then we finished the night with our good friends, Gus & Dianne at dinner… It was fun seeing all my former colleagues’ faces… and catching up on what’s new?  And then that night, a cold front moved through, with rain, and Saturday was a dud… Sunday was a little better, but still pretty chilly… UGH!  The band Lighthouse, greets me this morning with their rock classic song: One Fine Morning…  “one fine morning girl I’ll wake up, wipe the sleep from my eyes… “

Well… Friday’s price action in the currencies was almost a non-event, But the currencies did rally just a tiny bit on the day, with the euro holding onto the 1.19 handle, and the Dollar Index falling from 92.22 to 92.16…  And Gold lost $11.60 on the day to close at $1,742.20, and Silver lost 19-cents to close at $25.30… I just don’t get it about the price action of Gold these days… I’m a person that looks at facts, in fundamentals, and then compares them with what has happened in the past when these fundamentals existed, and then combine them and voila! I get a current picture of where something should be going in price…  And Gold has all these ducks in a row for it to be climbing steadily each day, higher and higher… 

I will say this though, the way the Treasury yields steadily climbed higher in the last 9 months was something to be concerned with, but now with the Cartel’s Yield Curve Control (YCC) that should be the end of all that fear that Treasury yields would return to normal levels, and then attract so much investment that it would leave Gold out in the Cold… But with the YCC in the Cartel’s back pocket now, Gold should be able to climb steadily…   And it’s not… 

And one more thought on what is holding Gold & Silver back… It’s the short sellers…  Did you know that in Silver the short positions equal 118 days of production? And Gold is about 75 days of production? On what planet on earth, does a regulator allow these kinds of short sales that are more than the asset’s total above ground?  Oh, that’s right…. The COMEX, and the CFTC…  THAT, my friends is a black mark on our country’s ability to regulate markets fairly and efficiently…  No wonder the Chinese said to hell with the COMEX 10 years ago and started the Shanghai Gold Exchange! Where short sales are not allowed!  Believe me, I could go on and on about how this shouldn’t be allowed in any universe, but it is in ours… UGH!

In the overnight markets… there was a little more slippage in the dollar, and that has given the currencies some good levels to start the week. The Dollar Index has fallen from 92.16 on Friday to 92.02 this morning.  Gold is down a buck in the early trading and Silver is down 8-cents… These sure are crazy times in the markets folks… probably crazier than I’ve ever seen before, and I’ve been associated with the markets since 1973! 

Well I had quite a few inquiries in the Pfennig Replies mail box asking me about inflation, and what was going to cause it to climb higher, since it hadn’t really done so yet…  It’s coming folks, and in some things like groceries, gas, heat, tuitions, insurance health and otherwise, etc. it’s already putting some folks in the red each month…  This form of inflation is called “Structural Inflation, and it’s derived by all the fake money being printed…  Here’s Bill Bonner from his rogueeconomics.com letter on structural inflation…  “Instead of increasing interest rates and thereby reducing demand for credit, the fake money increases debt loads, dependency, and the need for more cheap credit – more money-printing – to keep up with it.

“Structural inflation,” in other words, is not a natural feature of the business cycle. It is government policy. Intentional. Deliberate. And disastrous.” – Bill Bonner

Disastrous it is… because once it gets started… It will be difficult for the Cartel members to slow it down, and I have to think that they know that in their heart of hearts, and do not plan to attempt to stop inflation from rising because….. Remember when I told you many years, ago that the Gov’t needed inflation to inflate away the debt?  Well, the debt has grown by leaps and bounds since I first laid that idea on you many years ago… And I can’t imagine how much inflation we would need to inflate away our debt… Maybe Zimbabwe Inflation, maybe German inflation of the past, but it will certainly be more than the 14% that Fed Gov. Volcker slayed in the early 80’s…

And inflation is a kryptonite for the dollar.. You know, I saw a graph on inflation and the dollar’s loss of buying power over the weekend, and I hope to be able to reproduce it here for you tomorrow… And once you see this loss of buying power in the dollar, you’ll begin to realize that all the things I’ve talked about for years, have been going on, but you were led to believe, by the Gov’t, that there was no inflation… This week we’ll see the stupid CPI (consumer inflation) for March, and it should be heading to 3% even with all their hedonic adjustments, but it won’t… It’ll be lucky to breach 2%!  But as I told you last week, John Williams at www.shadowstats.com has inflation rising near 5%…  

One thing to keep in mind as we go through 2021, and the year-on-year prints of CPI come to light… Their base is a year ago, and what was going on a year ago? Nothing! Absolutely nothing, say it again!  No wait… Of course we were just starting our two -week shut down, no wait, that didn’t happen, but we were just starting a shutdown that would last throughout the summer for most states… And that is going to cause the CPI numbers to be skewed when compared to a year ago… As if the stupid CPI didn’t have enough hedonic adjustments to skew it each month already! UGH! 

OK, let’s talk about something else… Oh, this is important! My darn fat fingers got in the way on Thursday last week when I said that I would be on the virtual Money Show panel to speak about Gold & Silver on April 21^st (Frank Trotter’s birthday), but that was the wrong date, it’s actually April 22^nd. The links I provided were still good, and I’ll provide them again as we grow nearer to the date… I was so embarrassed when the first dear reader sent me a note and said I had the date wrong… I was like: These darn fat fingers, had the wrong date, even though I had the promotion staring me in the face as I typed! UGH!

Tsk, tsk, tsk… I’ve now lost 75 lbs and I still have fat fingers!  What the heck is going on here?  I think I could get down to my H.S. weight, and still have fat fingers!  Oh well, these fat fingers fly across this keyboard when I get them going, so they may be fat, but they are agile! HAHAHAHAHAHA!

A quick look at the U.S. Data Cupboard for this week tells me that except for the stupid CPI that will print tomorrow, we’ll have to wait until our Tub Thumpin’ Thursday, when a plethora of economic data will print, including Retail Sales, Industrial Production, Capacity Utilization, and the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims…  The only one I have a bead on right now is Retail Sales for March. You may recall that Feb’s Retail Sales were down -2.7%… The Butler Household Index (BHI) indicates to me that March’s Retail Sales will be very disappointing…  Even with the Easter holiday the first week of April, having some sales in March…

So, today’s Data Cupboard has the Federal Budget, but who cares any more how much currency we spend that we don’t have?  Americans have all become Comfortably Numb to the numbers…  And that’s a shame…

To recap… The currencies rallied by small amounts on Friday VS the dollar… Some of the moves were so small you couldn’t detect them without a price comparison from Thursday. Gold lost $11.60, and Silver lost 19-cents on Friday… Chuck talks about Inflation, and how it’s going to eat away at your buying power, as the dollar’s value gets whacked by inflation… In the overnight markets… There’s been more slippage in the dollar’s value, as the Dollar Index has fallen to 92.02 this morning, and Gold and Silver are down a smidgen this morning… 

For What It’s Worth… Since I spent a lot of time on inflation this morning, I thought you might like to hear what Cartel Chairman Powell, had to say about inflation… (if you’re like me, then you would like to skip anything Powell has to say!)  Apparently he and I went to different economics classes because I’m not buying what he has to say, and you shouldn’t either… Today’s FWIS is actually a 4:40 in time, video on YOUTUBE…  And the video can be found here: https://www.youtube.com/watch?v=Y2GwFiLhZZw

Or, here’s your snippet” At the Debate on the Global Economy hosted by the IMF this week, Fed Chair Jerome Powell once again re-iterated that he sees a temporary spike in prices, but that inflation would not be a long-term, persistent force.

“There’s a difference between essentially a one-time increase in prices and persistent inflation. When we say inflation that’s what we mean. We mean persistent inflation that goes up by 2% or 4% or whatever it is, year after year, and that level of inflation tends to be dictated by underlying inflation dynamics in the economy, as opposed to things like bottlenecks,” Powell said.

Powell added that bottlenecks in the supply chain will be resolved, therefore, any price increase from a “temporarily tight” supply side would likely not repeat the following year.

Higher levels of inflation are not a phenomenon that advanced economies have seen over the past two decades, he added. “

Chuck again… you may as well, get used to Gov’t and Central Bank leaders selling you snake Oil… For that’s all they have left to sell you… They’ll probably be telling us that they still have things under control when inflation is passing 10%…  I’m just saying…

Market price  4/12/2021: American Style: A$ .7630,  kiwi .7047,  C$ .7976, euro 1.1911, sterling 1.3766, Swiss $1.0826, European Style: rand 14.6036, krone 8.4791, SEK 8.5610,  forint 299.21,  zloty 3.8002,  koruna 21.8797, RUB 77.38, yen 109.32, sing 1.3404, HKD 7.7754, INR 74.96, China 6.5520, peso 20.15, BRL 5.6798,  Dollar Index 92.02,  Oil $60.03,   10-year 1.66%, Silver $25.27, Platinum $1,188.00, Palladium $2,527.00, Copper $4.06, and Gold… $1,733.20

That’s it for today… A very fun home opener for my beloved Cardinals was about the only bright spot of the weekend, as they lost 2 of 3 games… They began the season with a 5-4 record for the first 9 games, and I expect that unless something changes in their roster, that they will hover around .500 all year…  Our Blues had a good weekend wining both Friday and Saturday… Let’s Go Blues! Little Evie came to spend the night with us on Saturday night… She’s my buddy again now, and we played with a ball, I read her 6 books, as she sat still on my lap, which is very unusual for this little girl!  We had a mini-dance party, and she blew me a kiss when she left… ☹ I was just glad she warmed up to me again… I had some strange days Saturday and Sunday… My legs felt like they weighed 200 lbs a piece, and hurt when I walked… And going up and down stairs was not fun! I slept most of Saturday, as I couldn’t wake up, and Sunday I just sat in a chair outside most of the day… UGH!  I’m hoping I bounce back today… The great Barbara Lewis takes us to the finish line today with her song: Baby, I’m Yours… “And I’ll be yours until the rivers all run dry”…  I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

 

 

April 8, 2021

* Currencies are back on the rally tracks this morning… 

* Gold & Silver recover nicely and head north! 

Good Day… And a Tub Thumpin’ Thursday to you! My beloved Cardinals got out their brooms yesterday as they swept the Marlins in a 3 game set… A HUGE home run by long time fan fave, Yadier Molina was the margin of victory… Today is the Home Opener… That is if the rain allows it to be! I saw rain yesterday for the first time in over a month! And it’s coming back today just for good measure. The rain has pushed back the schedule that our pool deck will be finished, but that’s no biggie, as we have the whole month of April left to get that done.  Our Blues  ended their losing streak at 7 games, with a 3-1 win last night… It’s finally time they won a game!        Radiohead greets me this morning with their song: Karma Police…

The old saying that I coined many years ago is that A Trend, is not a one-way street…  And that’s what we saw yesterday, as there had to be some profit taking and a bit of selling short, on the day, as the euro, the Big Dog, lost about 1/3^rd -cent. The Dollar Index gained on the day from 92.22 in the morning to 92.44 at the end of the day.  Gold found a way to rally during the day, and had erased its $8 loss in the early trading, but then to close out the day, a flurry of short gold paper trades hit the market, and Gold ended up losing $6.00 on the day… Silver didn’t see a flurry of short Silver paper trades and it ended up only losing a nickel… Which was far better than in the early trading when Silver was down 26-cents… 

In The overnight markets… The dollar was back to getting sold overnight, as the euro, the Big Dog, climbed back to 1.1880, and the Dollar Index dropped back to 92.26…  Gold is back on the rally tracks this morning, with the shiny metal up $9.90 in the early trading, and Silver is kicking some tail up 25-cents this morning.  If these gains in the currencies and metals hold throughout the day, then it will confirm to me in my mind that yesterday’s trading was simply profit taking… 

Well… I had a dear reader ask me what was the problem with the vaccine passport?  I didn’t respond to him because… If you have to have your freedom of movement limited explained, then I’m at a loss to explain it any different than I did yesterday….   

Today is the day that my interview with Dennis Miller of milleronthemoney.com gets printed, and posted to his website…  I’m going to use some of that letter as my FWIW article today…  In the meantime, publishing guru, and best selling author, Bill Bonner, basically wrote a review of the letter without knowing it! He pointed out that China’s digital currency is a BIG DEAL….  He also had this to say in his letter rogueeconomics.com “The U.S. feds can control many elements in their fantasy world.

They can create “money” out of thin air. They can create make-work jobs. They can increase ersatz “demand” – by giving away more fake money. They can goose up stock prices… and suppress interest rates.

The thing they can’t do is control the value of their phony-baloney dollars.

And when it becomes more obvious that the morons have lost control of the dollar, the new digital yuan may look like a handy alternative.” – Bill Bonner

Chuck again…  OK… Well if you want evidence that the Cartel is implementing their Yield Curve Control (YCC), you don’t have to look any further than the movement in the 10-year Treasury’s yield, which has been moving downward for over a week now…  Going from 1.78% to 1.65% this morning…  Basically, in bond, when you buy a ton of bonds, the price will rise and the yield goes down, and vice versa when there is a ton of selling of bonds, the price would go down and the yield would go up…  In the Cartel’s YCC they would be the buyer… thus the drop in the yield in the last week…

In the Cartel’s meeting minutes yesterday, the Cartel’s members were split on their takes of how inflation is rising… I took this from MarketWatch.com “Several” Fed officials said that supply bottlenecks and strong demand would push up price inflation “more than anticipated,” the minutes said.

At the same time, “several” other Fed officials expressed belief that the factors that had contributed to low inflation over the past decade “could again exert more downward pressure on inflation than expected.”

Chuck again… And in the end the cartel believes that inflation for 2021 will reach 2.4%…  I’m going to call them out on that, and say malarkey! Balderdash! Hokum! And so on….  John Williams at Shadowstats.com says that real inflation is running just below 5%…   And it’s rising!  A week or so I titled a Pfennig with these words; If The Fed Really Wants Inflation, They Should Calculate It Correctly! Is that so correct! 

OK… China’s digital currency… I’ve told you previously that all countries are developing their own digital currency… It’s just that China was first… And they will be able to trade in the blockchain with their digital currency, which means…. Countries around the world will be holding digital yuan/ renminbi as reserves… And reducing the dollars they held as reserves…

The question in my mind is this… What is the U.S. going to do about this, for this does not bode well for the dollar’s future as a reserve currency…  And this is where we drop down into a deep rabbit hole folks…  Will this mean war with China? Will there be financial sanctions on China?  There are a myriad of things that could come about and none of them are good for relations between the U.S and China!

The U.S. Data Cupboard yesterday had the aforementioned Cartel Meeting Minutes… So with that out of the way, we can concentrate on the other two prints yesterday… with the first being, The Feb. Trade Deficit, which rose to $71.1 Billion from $67.8 Billion in Jan…  And the Consumer Credit for Feb (read debt) grew $2.7 Billion…   Let’s see, first off I know this isn’t how it works, but let’s just play with this and see what Chuck has in mind…   the difference in the Trade Deficit was $3.4 Billion, and the increase in Consumer debt was $2.7 Billion…  That’s very interesting to me how close those two are to matching…

Today’s Data Cupboard will have the usual Thursday fare of Weekly Initial Jobless Claims…  Now you may recall that 3 weeks ago, the number of Claims fell below 700,000 for the first time during the pandemic phase…  But then two weeks ago, they climbed back above 700,000 to 719,000… So, it will be interesting to see what’s going to print here today…   

Well I didn’t have to wait too long for the number to print, and since the letter is a little later this morning, the Weekly Initial Jobless Claims rose last week to 744,000… Ahem, the last two weeks of claims seem to be going in the wrong direction…  What do the spin doctors say about that? 

Before we head to the Big Finish today, I wanted to point out something that I’ve talked about for a few years, and that is to watch the Euro-wannabes for they will indicate if the dollar is really in a weak trend… So, who are the euro-wannabes?  The Hungarian forint, the Polish zloty, and Czech koruna…   Just the other day there was a blurb from the GATA folks that Hungary had increased their Gold reserves by a HUGE amount… And I don’t know if you follow these three, but the forint has dropped from the 308 handle to 301 in the past week… And the koruna, after months of trying has slipped below the 22 figure..  So, these three are in rally mode… 

I’m well aware of the fact that they have been in rally mode a couple of times in the past and their moves proved to be false dawns…  The dollar always seems to get rescued from a ride on the slippery slope by the Plunge Protection Team (PPT)…  But one of these days, Alice… to the moon! (for the currencies, not the dollar!) 

To recap… The currencies saw some profit taking yesterday, and their recent trend of rallies proved once again that a trend is not a ONE-WAY Street!  Gold worked diligently to rid itself of its early morning loss of $8, but a flurry of short Gold Paper trades flooded the market at the close and Gold ended down $6…. Silver erased all but 5-cents of its 26-cent loss in the early morning trading. Chuck talks about Inflation, the Chinese digital currency, as does Bill Bonner too!   Chuck points out that the Cartel’s YCC appears to be being implemented…

For What It’s Worth… Ok, as I said above, I have a snippet of the article where Dennis Miller interviewed me regarding digital currencies… So, that article can be found at Dennis’s website, or if you subscribe to his letter, it’ll be in your email box this morning, but it can be found here: www.milleronthemoney.com

Or, here’s your snippet: “ Dennis asks, Doesn’t “slowly lose value” mean negative interest rates – confiscation?

CHUCK: Thanks again Dennis to allow me to opine here…

To answer your question, yes it does mean negative interest rates. The thing that I keep talking about is the fact that the banks will then be able to charge you for logging into your account, and everything else, and there’s nothing you can do about it, because…. Well, the “money” is digits.

And, if you want to move your digits down the street to a different bank – that’s not going to help you, because banks will all be under the same fee schedules. Of course, price-fixing is illegal, wink, wink!”

Chuck again…  This is a powerful article folks, and one that I wish everyone would read, so they can begin to protect their accumulated wealth… if not for you, then your kids, or grandkids…

Market Prices 4/8/2021: American Style: A$ .7644,  kiwi .7050,  C$ .7946, euro 1.1880, sterling 1.3765, Swiss $1.0782, European Style: rand 14.5268, krone 8.4798, SEK 8.5876,  forint 301.80,  zloty 3.8313,  koruna 21.7887, RUB 77.28, yen 109.15, sing 1.3401, HKD 7.7779, INR 74.53, China 6.5392, peso 20.15, BRL 5.5980,  Dollar Index 92.26,  Oil $59.62,  10-year 1.65%, Silver $25.45, Platinum $1,237.00, Palladium $2,694.00, Copper $4.08, and Gold… $1,748.50

That’s it for today… Opening Day in St. Louis… it doesn’t get much better than that! I used to get invited to every opening day but, those were the days my friend, we thought they’d never end… It’s funny how business relationships end when you leave… Out of sight, out of mind, and I thought they were my friends! UGH!  Oh, well, if it’s going to be a rainy day, I think sitting in my back yard and watching the game will do me just fine! I’ll still get the goosebumps when those beautiful Clydesdales come trotting into the stadium!  Tomorrow is Friday, and it will be a Big Day for me for a number of reasons, of which I’m not going to talk about now… OK.. this is BIG NEWS!  On April 21 (Frank Trotter’s Birthday) at 4:30 EDT I will join my publishers, Mary Anne and Pamela Aden, along with Omar Ayales on a virtual panel to discuss Gold & Silver…  This is being put on by the Money Show folks, and if you want to register to watch and listen to what we have to say, click here to register: https://online.moneyshow.com/2021/April/money-metals-and-mining-virtual-expo/registration/?scode=052516    I hope you all inundate the system and overload it with large numbers of people that have registered… In fact, I’ll be very disappointed if that doesn’t happen! 

On a sidebar… The woman who puts these things together at the Money Show, contacted me and wanted a bio and picture of me…  I said, “I don’t know if you were there or not, but… I used to speak at Money Show presentations 3 to 4 times per year.Surely you have that info and phot on file… And she said, “Oh, of course, I remember you now Chuck Butler, we’ll use what we have”… Whew, I did not want to write another bio!

Ok… The Climax Blues Bank takes us to the finish line today with their 80’s song: Couldn’t Get It Right… “kept on looking for a sign in the middle of the night, but I couldn’t get it right”….  I hope you have a Tub Thumpin’ Thursday, and please Be Good To Yourself!

Chuck Butler

 

April 7, 2021

* currencies rally again on Tuesday… 

* Gold & Silver have a good Tuesday, but are down today… 

Good Day… And a Wonderful Wednesday to you!  That was a real grinder of a game last night, but my beloved Cardinals rallied and won 4-2.. Baseball games can be exciting, full of action, and slow and grinding at the same time… I love baseball…   We had the pool deck coating removed yesterday for a new coating, and talk about a mess! I’m sure some of my neighbors will be complaining about the dust on their patios! But there’s no other way to do the job… I guess we’ll have to offer to clean their patios and decks… UGH!  Johnny Nash greets me this morning with his rock classic song: I Can See Clearly Now… 

The currencies had another day of rallying VS the dollar yesterday… The Dollar Index fell to 92.30 at the end of the day from 92.73 at the beginning of the day. The euro really moved higher in the 1.18 handle, and all the other currencies followed the Big Dog, chasing the dollar down the street. Even the Japanese yen, which had seen nothing but selling in recent weeks, found a way to move back to the 1.09 handle… I’m going to repeat myself here… As I said yesterday, I do believe that the currency traders are finally looking at all the currency (dollars) that has been printed, and what’s going to BE printed, and decided that buying dollars was foolish…  

Gold & Silver were some really bright spots in the markets yesterday, with Gold rising $15.10 on the day to close at $1,744.60, and Silver rose by 31-cents to close the day at $25.25…  So, what’s changed with these two from all the bloodletting they were absorbing the past month? Well, I’ve always contended that you can’t teach stupid…   But stupid can finally see the light…  And to my way of thinking, this is what has changed… stupid saw the light…  

On a sidebar… My grandkids would be all over me like a cheap suit, if they read the Pfennig, and I said the “s” word so many times!   I always point out to them that if it was good enough for Charlie Brown, then I can say it!

In the overnight markets.. There has been more selling of the dollar, but not as much as the last two U.S. sessions. The Dollar Index has slipped further down to 92.22 this morning, and the euro is within spittin’ distance of the 1.19 handle… Gold & Silver are seeing some profit taking this morning as Gold is down $8 and Silver is down 26-cents…  Those are small amounts and can be reversed easily… so maybe use the cheaper price to buy some additional metals? 

OK… Well… the goose that laid the golden egg, is dying… That is the U.S. as we know it… Changes are coming folks, and they are not changes that we will embrace…  All of our deficit spending is killing the goose, slowly but surely… Sort of like Chinese torture… Speaking of the Chinese… tomorrow in Dennis Miller’s milleronthemoney.com letter, I will discuss the Chinese and their new digital yuan/ renminbi… This is a game changer folks…  And once his letter hits the streets, I’ll share a snippet with you from it, but you should be signed up for his letter now!

I have to go out on limb here, and hope people understand that I’m merely trying to alert them to things that could be happening to them… And the need to make sure you have a store of wealth to keep you and your family strong in the future…   OK… Last week I mentioned how ticked I was about this so-called Covid-passport…  Some states have already said they will not be a part of this, like Florida and Michigan… There may be others but those are the two that I’m aware of right now…  What I’m reading now is that the Gov’t is not going to be the monitor of the passports… But the government will set the rules that people will have to abide by…  The talk now is that private corporations will be the monitors of the passport…   Here’s James Rickards on the passport: “This would be a document of some sort, likely in digital form as a QR code on your mobile phone. If you have the COVID vaccination, you’ll get a QR code to put on your phone. With that, you’ll be able to board airplanes, attend concerts and sports events, go to classes and basically live life as ‘normal’…

“Without the QR code, your ‘papers’ will not be in order and you will be denied transportation, entertainment and educational options. It’s basically a way to force people to be vaccinated if they want to live a normal life.”- James Rickards, in the 5 Minute Forecast, 4/6/21

You know me… I’m against anything that limits my civil liberties and freedoms of movement…  Everyone should contact their representative and tell them how they feel about this, if in fact, you are in agreement with me that this is going to be the end of our civil liberties and freedoms of movement…

While I’m out on a limb, I might as well throw this up against the wall…  I’ve had a few dear readers ask me this question. “What do you think of MLB pulling the All-Star game out of Atlanta Georgia?” Ok, for those of you living under a rock, Major League Baseball pulled the All-Star game out of Atlanta Georgia, because they didn’t agree with Georgia’s new voting law that will require photo ID…  Wait! What?  That’s crazy! The pulling out of the All-Star game that is… not the voter law…  To me… This is a case of MLB succumbing to the woke cancel culture…  There I said it…

Ok, back to regular programming here…  I told you yesterday about how inflation is all around us, and it is… You know, it’s not just price increases of the same items you’ve been buying for some time now, it’s also the changing of the size of the item that you are purchasing… You may be paying the same price, but in the end you have to buy more to make up for the size difference…  I’ve talked about this for years, so this is nothing new to long time readers.. Probably just had to jog their memories, that’s all… Well, I have an article for you to day in the FWIS section that talks about this downsizing to deflect the price adjustments, so make sure you stay turned for that!

The U.S Data Cupboard yesterday had the IMF’s World Economic Outlook, and they are looking through rose colored glasses, folks… The IMF believes that the Global GDP will rise 6% in 2022… Now here are some interesting numbers… The IMF also believes that the driver of the Global economy will not be the U.S. but China and India, with GDP’s of  8.4% and 12.5% respectively… 

If , and that’s a BIG IF, India is going to grow 12.5% in 2022, currency investors should be backing up the truck to buy rupees…   I’m just saying…  (of course it will be too late to buy rupees by the time the 2022 GDP prints )

Speaking of GDP growth… Dig This! The IMF says that Australia will outperform the major economies of the world in 2021, with a 4.5% GDP…   But before we break out the champagne and orange juice, the IMF said that they believe the GDP for Australia will fall back in 2022 to 2.8%…  Hmmm…. That’s quite a drop from 2021, isn’t it? And makes me think that the IMF will revise that figure in the coming months… Just like that did with the 2021 forecast, that that originally said would be 3.5%, and now have revised it upward to 4.5%…  Either way, it does help to explain the strength in the A$ so far in 2021…

Today’s Data Cupboard has the Feb Trade Deficit… look for this to rise to $70 Billion from $68 Billion in Jan.   We’ll also see the color of Consumer Credit, read debt…  And finally the Cartels’ FOMC Meeting Minutes from the last meeting…. There’s nothing to see here, so move along… These are not the droids we’re looking for!

To recap… The currencies had another day of rallying VS the dollar on Monday… The Dollar Index fell from 92.73 in the morning to 92.30 at the end of the day… Gold & Silver had a good day, with Gold gaining $15 and Silver gaining 31-cents on the day.  Chuck sure is getting feisty in his old age…  A wise man once told him that as you grow old you can say whatever you want, because no one listens to you, and so he’s testing that theory this morning…  The IMF says India’s GDP will grow 12.5% in 2022… beep, beep beep, that’s the sound of the truck backing up to load up with rupees, ahead of the Indian economy’s rise…  Chuck thinks that this call for 12.5% GDP is a longshot… But, IF it does happen… You saw it here first!

For What It’s Worth… Once again today, like yesterday, good friend, Dennis Miller sent me this article and while reading it I knew it was FWIW material! It’s about the inflation that businesses can’t hide, and it can be found here: The Inflation They Can’t Hide – The Burning Platform

Or, here’s your snippet: “You can’t reduce the size of a 4×8 sheet of plywood to hide the rising cost of one – or shave some length off a 2x4x8 – without it being not only obvious but an issue, functionally. Try siding a house with 4×7.4 sheets of plywood, for instance.

So, instead, the price goes up. Which is really a measure of the value of your money going down.

The same has been happening for some time at supermarkets, less noticeably. Or at least in a way that makes many people not notice it because that pack of bacon they just bought still costs about the same as it cost a year ago.

Only now it’s 12 ounces instead of 16.

Fewer rolls of paper towels – but the price seem unchanged. Such illusions of economic stability are to be found in practically every aisle and on every shelf of the grocery store – the happy spell only broken when you check out your handful of stuff and discover it cost you $100 – or more – for what used to cost you $60 or less.

But the destruction of the value of money – manifested by its ominously decreasing purchasing power – is becoming impossible to not notice when it comes to products that can’t be skimmed, put less of into the same size packages.

A very objective measure of how fast things are slipping – by observing how fast things are rising – is what you could call The 4×8 Plywood Index. About two years ago – in the fall of 2018 – the average national cost of a sheet of 4×8 construction-grade plywood was just $10 or so.

Fast-forward two years and that same sheet of plywood now costs $25 or more (depending on the finish). Some cost $40 per sheet.”

Chuck Again… As I said, inflation is all around us and closing in fast… And the one thing that will destroy a currency’s value?  Inflation…  simply said…

Market Prices 4/7/2021: American Style: A$ .7634,  kiwi .7038,  C$ .7941, euro 1.1893, sterling 1.3821, Swiss $1.0768, European Style: rand 14.5220, krone 8.4568, SEK 8.6057,  forint 302.28,  zloty 3.8463,   koruna 22.7830, RUB 76.75, yen 109.80, sing 1.3388, HKD 7.7860, INR 74.27, China 6.5464, peso 20.16, BRL 5.6356,  Dollar Index 92.22,  Oil $59.78,  10-year 1.66%, Silver $24.99, Platinum $1,230.00, Palladium $2,635.00,  Copper 4.06, and Gold $1,735.20

That’s it for today… I perused through my library of books yesterday, and found an oldie but goodie, that I read many years ago, so many I’ve forgotten when, and thought… I’m going to read it again… The book? Catch -22, by Joseph Heller… the first 100 pages were kind of remembered but not really, so this is going to be good! Well a day game today in Miami for my Cardinals, and then they come home for the home opener tomorrow, which is supposed to be kind of a rainy day… Boo!  As I said last week, a St. Louis baseball home opener is something that everyone should experience, they pull out all of the stops… And when those beautiful Clydesdales come prancing in, goose bumps appear… I’m just saying… Jefferson Starship with Marty Balin, take us to the finish line today with their song: Count On Me…  “Precious love, I’ll give it to you, Blue as the sky and deep In the eyes of a love so true”   I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

April 6, 2021

* Gold & Silver rally in the overnight markets… 

* Mortgage bonds are in peril… 

Good day… And a Tom Terrific Tuesday to you! My beloved Cardinals got back on track last night with pitching and defense… Now, they need to do it again tonight! I got a visit from good friend, Mike Kettler last night, who watched a couple of innings of the game with me… I was outside to watch the game, but had to fold up tent, and go inside for the last 2 innings… The Final game of the NCAA Tournament did not go the way I expected it to go… But Congrats to Baylor!  And what the heck has happened to our Blues? They’ve now lost 7 games in a row! And are out of the playoffs at this time! UGH! My fave AC/DC song greets me this morning as my iPod plays their song: You Shook Me All Night Long… 

Well, as traders got back to work, not all, but some, they saw the writing on the wall regarding more deficit spending and more dollars being printed, and decided that enough dollar strength was enough! That is for one day… You see, the Plunge Protection Team (PPT) is still hanging over currency traders like the Sword of Damocles… So, for a day, it was about selling the dollar… The euro climbed back above 1.18, and the Dollar Index lost 36 BPS to end the day at 92.60… That’s a significant move in the Dollar Index for one day’s trading. 

I wasn’t told that the recognition of all the new deficit spending was the reason the currency traders all decided to sell dollars yesterday…  In all my years experience of not only trading currencies, but writing this letter and observing the markets, I’m pretty darn sure that was the motive for selling dollars yesterday…  That’s my story, and I’m sticking to it!

Gold & Silver tried like the devil to get back to even after starting the day down… And they both almost made it, but fell a few shekels short… Gold ended the day down $1.80  to close at $1,729.50, and Silver was down 7-cents to close at $24.94… In the after markets trading Gold was up $6.30, and Silver was up 12-cents, and back above $25….

In the overnight markets… Well, Gold & Silver did hold their aftermarket gains overnight, and have added a bit to them in the early trading, with Gold up $8.30, and Silver remaining at up 12-cents…  The Dollar Index was fought back and is 92.73 this morning, which means the dollar saw some buying overnight, not much, but some…  I read this morning that Treasury Secretary Janet Yellen has proposed a minimum tax rate for Corporations, globally…  Really? Ok, you’re going to be the tax monitor for a country in Africa, or the one of the stans in Asia? Come on, get serious here…  I do believe that Corporations should play more than their fair share to keep their buildings and personnel safe (Police and Fire) but to play tax monitor is something that’s impossible to do, in my humble opinion! 

I don’t know if you noticed the price of Copper yesterday, but it had fallen below the $4 figure for the first time in 2 months… But overnight the price of Copper skipped higher to $4.04… As I’ve told you previously, the price of Copper is a good indicator of coming inflation… I don’t know if you pay attention when you go to the grocery store, but inflation is all around us folks… All around, and please do not listen or pay attention to the CPI data behind the curtain!  And you won’t see it in the yields of Treasuries, because the Fed is performing their yield curve control… UGH! So, for now, watch the price of Copper… 

I was really put off by a comment to me yesterday… The reader told me to stop quoting Bill Bonner, as he reduces the integrity of my letter….  Really? Bill Bonner is one of the most respected analysts around, and has been for a couple of decades! And he’s my friend… So, no… whenever I get an opportunity to quote Bill Bonner, I will do so…  Now, we’ve put that to bed!

I had a dear reader ask me for the name of a book that would explain the relationship of Gold & Bond Yields… I responded that I wasn’t aware of such book, but would give my own take on that, and then told him: But what is a bond yield at all? The bond yield is a return on investment, expressed as a percentage, for a bond. In other words, they are interest rates offered by bonds. The bond yields are inversely related to the bond prices. The lower the price, the higher the yield, and vice versa. Because both gold and Treasuries are considered to be safe-haven assets, there is a positive correlation between gold and bond prices, and negative correlation between gold prices and bond yields. This is because there are opportunity costs of holding gold, which does not bear any yield, so capital flows from gold to bonds, when yields become sufficiently high, and it flows in a reverse direction, when bond yields become too low.

OK… onto other things…  Long time Reader Bob, sent me a note yesterday regarding the Russian ruble, and I thought I would share a piece of that with you… “Hopes that Russia’s ruble will rise at the beginning of the year have been dashed. Despite relatively good fundamentals – from the Russian economy’s recovery rate to oil prices – the national currency remained volatile. The situation will be uncertain in the second quarter of the year, too, said experts interviewed by Izvestia.”

“The risk of sanctions is the main thing that prevents the Russian currency from strengthening,” Finam analyst Andrei Maslov noted. “Many analysts believe that the ruble is underrated because with oil prices above $60 per barrel, the Russian currency is still weak against the dollar and the euro, which is the result of a serious lack of investor trust based precisely on geopolitical risks,” the expert explained. According to him, the ruble will strengthen over the course of the year, provided that oil prices remain above the $60 level and no tough sanctions are introduced.” From TASS…”

I read an email from the good folks at GATA who quoted Dave Kranzler, of whom I’ve quoted a few times through the years. Mr. Kranzler was talking about the recent sell off of Gold & Silver, and that he thought it was probably due to the price manipulators attempting to get the long holders of the metals to sell their April Contracts or roll them out to July…. Now, I hear you asking, why would that be their goal?  Ahhh Grasshopper… You see, if the April Contracts all stand for delivery of the metals, the COMEX could have a problem making delivery…  Now do you see why the price manipulators were working to achieve this goal?

Yesterday, I loaded up for bear, and really came out firing after a brief holiday… Today, I’m just going to talk a bit about something that I’ve gone through a few times in the last year.. .And that is the danger of armegeddon with housing… The lack of payments on the bonds, and the end holders holding worthless paper…   Well, I have this whole scenario in the FWIS section today, so don’t change that dial!

The U.S. Data Cupboard yesterday had Factory Orders for Feb… In January Factory Orders rallied 2.7%, but February saw it go negative -.8%…  Not a good indicator for the economy….  Today’s Data Cupboard has Job Openings for Feb… really old news… And the IMF will print their World Economic Review…  talk about some boring reading!

To Recap…  The currencies rallied on Monday, and Chuck thinks it had to do with traders seeing the amount of deficit spending coming down the pike… Gold & Silver started the day down but rallied and fought back to close down by a small margin… The Dollar Index yesterday went from 92.96 to 92.60…  A significant swing in Chuck’s mind… And Dave Kranzler tells us that the recent bloodletting in Gold & Sliver was due to the price manipulators trying to get long metals holders to sell their April Contract, or roll it to July… And Chuck explains why!

For What It’s Worth…  The Day of Reckoning is coming for banks and lending companies and the mortgage bonds… You don’t stop receiving payments on debt for over a year, and not have ramifications… I’ve talked about how this could all end up in tears previously, but this time I’m goig to let Bloomberg tell you about what’s coming… And that article can be found here: Mortgage Firms Warned to Prepare for a ‘Tidal Wave’ of Distress – Bloomberg

Or, here’s your snippet: “Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said Thursday.

The Consumer Financial Protection Bureau warning is tied to forbearance relief that’s allowed million of borrowers to delay their mortgage payments due to the pandemic. To avoid what the bureau called “avoidable foreclosures” when the relief lapses, mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.

“There is a tidal wave of distressed homeowners who will need help,” Dave Uejio, the CFPB’s acting director, said in a statement. “Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.”

In a separate compliance bulletin released Thursday, the CFPB said that companies “that are unable to adequately manage loss mitigation can expect the bureau to take enforcement or supervisory action.”

More than 2 million borrowers as of January had either postponed their payments or failed to make them for at least three months, the bureau said. Once government-authorized forbearance plans begin to end in September, hundreds of thousands of people may need assistance getting back on track.”

Chuck Again.. Unintended Consequences… They always come back to bit you in the ask me no more questions, I’ll tell you no more lies…. I’m just saying…

Market Prices 4/6/2021: American Style: A$ .7626,  kiwi .7020,  C$ .7957, euro 1.1808, sterling 1.3828, Swiss $1.0666, European Style: rand 14.5086, krone 8.5298, SEK 8.6857,  forint 304.97,  zloty 3.8850,   koruna 22.0602, RUB 76.34, yen 110.31, sing 1.3409, HKD 7.7767, INR 73.38, China 6.5669, peso 20.29, BRL 5.6851,  Dollar Index 92.73,  Oil $59.93,   10-year 1.69%, Silver $25.06, Platinum $1,214.00, Palladium $2,744.00, Copper $4.04, and Gold $1,737.80, 

That’s it for today… Man… I had to put a new battery in my car upon returning home, and it’s not like it used to be…where you loosened a couple of bolts and  took the old battery out, and then put the new one in, and tightened the bolts… I had to do all kinds of releases and then I dropped a bolt and when I went to reach it, I sliced open my arm on some metal… OUCH!  I hope no one was around because I let off a set of swear words that would make a Sailor blush! I didn’t need stitches, but it was close… UGH! Well… I’m now down 65 lbs from last Rocktober, and my blood sugar numbers are in line, finally! I would like to lose another 50lbs… But getting here has been very difficult to do for me… But, I’ve got to try! My weight through the years has been up and down, with more ups than downs… So, to get where I need to be, and stabilize that, would be a giant step in the right direction for my health! My visitor last night reminded me that I said that if the weather was good that I would have a driveway happy hour this Friday… And it looks like the weather will be good, so if you’re reading this and want to join us, with safe distancing, come on by!  The Babys  take us to the finish line today with their song: Midnight Rendezvous…  “driving faster than you want me to, Can’t help myself when I’m alone with you, Alright!”  I hope you have a Tom Terrific Tuesday, and will Be Good To Yourself!

Chuck Butler

 

 

April 5, 2021

* Currencies begin the week flat… 

* Gold & Silver start the week down a bit… 

Good Day… And a Marvelous Monday to you… Easter Monday at that! Yes, a lot of the world takes this day as a holiday, but not me… Unfortunately! I could have easily gone back to sleep this morning, but being the writing soldier that I am, I conquered the sleepy feeling!  Aren’t you proud of me? HA! Sad news last week, when I read that one of my all-time favorite Cardinals players, Kenny Reitz, aka The Zamboni, had died… I have one of his baseball cards hung on my pictures wall that faces me as I write the Pfennig.. Not the greatest hitter, but boy could he play 3^rd base! He set the record for least errors by a 3^rd baseman 2 times… with 9 one year and 8 on the other…  I guess as I go along in years, I’ll have to deal with many of my younger life faves… UGH!  The Grass Roots greet me this morning with their song: Let’s Live For Today…  Now that’s some good advice, eh?

Well, last Friday was Good Friday, and for the most part, markets were closed… Except the currency markets! Gold & Silver weren’t traded, so the charge on the dollar was left to the currencies. And well, they didn’t charge too hard, because the Dollar Index gained 9 BPS to finish the week at 93.02…  The euro fared better than most currencies on the day, gaining about 10 BPS Vs the dollar, which is, in reality, a pretty muted move… 

In the overnight markets last night… There’s really not been much movement in the currencies, as the Dollar Index has fallen about 6 BPS, which really indicates that everything here is flat…  Gold & Silver are back to trading this morning, and maybe they should have stayed on the sidelines, because Gold is down $7.80 this morning and Silver is down 10-cents…  Those losses could very well be turned around easily today, so I’ll be watching for that!  

So, since there was little in the markets to talk about from Friday and last night, I’m going to got out on a limb and talk about some things going on that really get my goat… And throw it up against the wall to see if it sticks…  ready? OK, let’s go!

Last week I told you that the dollar’s ratio of currency held as foreigner reserves had fallen to a low that hadn’t been seen since 2010, which was before the hidden debts of Club Med countries of Europe was exposed, and the dollar’s long time weak trend turned on a dime…  That’s a Big Development folks… I can’t begin to express how BIG this is…  But let me just give you this bit of information to see if it gets your mind thinking about how big this news is…   The share of Chinese renminbi in foreign reserves hit an all-time high!  

The dedollarization that was started by Russia, and then joined by China appears to be catching on around the world… China and Russia have stared a clearing facility like SWIFT, that they say anyone in the world can use, and won’t be used to punish countries, like SWIFT does… (of course the U.S. runs SWIFT, so you get what the new facility is saying)…  This means that countries that join the new facility will be able to trade with another country using the facility in their home currencies, and not have to buy dollars in the terms of the transaction…   

Add to this the fact that China’s digital currency is ready for prime time, and I can’t even begin to express how important this is in the future for the dollar…  I do explain it in an interview that will be running in Dennis Miller’s Milleronthemoney.com soon… So, if you aren’t already a subscriber to his free letter, and you want to know what I said… well, go to the site and sign up!  You’ll be glad you did!

Ok, switching gears here…  Ok. Last week President Biden presented his latest deficit spending bill… It was a $2.3 Billion so-called infrastructure bill…   So, here’s the skinny on how that $2.3 Billion will be spent… courtesy of Bill Bonner’s www.rogueeconomics.com… get out your calculators to check my math if you want….  “Most of the $2.3 trillion will buy votes rather than infrastructure, including $400 billion for “elder and disability care,” $213 billion for “green and affordable homes,” $174 billion for electric vehicles, $137 billion for “school and childcare infrastructure,” $100 billion for “job training” and so forth.

It’s a smorgasbord for Democratic Party urban constituencies that leaves $180 billion for “R&D in tech of the future” and $300 billion in manufacturing subsidies as an afterthought.” – Bill Bonner… 

As Bill points out…”You may wonder why $2.3 trillion would be needed. After all, roads are supported by gasoline and road taxes… And except for the Interstate highway system, they’re a local matter.

Bridges, too, are paid for by users – either via tolls or taxes.

Ports? Same story, paid for by the shippers who use them. And airports, by ticket sales.

Railroads? Except for the money-losing Amtrak, they are privately owned. If they need more track or rolling stock, they can apply their profits or raise more money honestly.

If a new airport is needed, it is easily funded by the people who use the airport. And if it can’t be paid for in such a reasonable and obvious way, why is it being built?

If the Port of Long Beach, for example, needs more capacity, wouldn’t it make sense to charge the ships that come into port with their containers… and the railroads and trucks that haul it away?

Of course, it would. They know what is needed and how much it is worth. The feds do not. ” – Bill Bonner

The big take away here is that another $2.3 Billion of money that the Gov’t doesn’t have will be spent, which means that $2.3 Billion new dollars will be printed…  And one wonders why the share of dollars as reserve currency has dropped to a decade low?  Hmmm… 

OK… here’s another thing that’s been on mind… And that is… that we as a country have passed the $28 Trillion in Debt mark like a car passing a picket fence… Now, that didn’t take too long now did it?  Well, actually it was just 13 months since we passed $27 Trillion…   And during that time we’ve added $4.2 Trillion of money supply…  And again one wonders why the dollar’s share of reserves has fallen to a decade low?  Well, I don’t wonder, because I know! 

Friend, Dennis Miller, sent me an article that talks about the debt increase, and I have it for you as our FWIW article today, so stay tuned, don’t touch that dial! 

Well, if we’re looking for any direction from the U.S. Data Cupboard this week, we’ll be disappointed… There’s really not much to speak of in the cupboard scheduled for this week. We will see the Fed’s FOMC Meeting Minutes on Wednesday from their last meeting…  Those are always good for some rogue comment… So, we’ll have to wait-n-see that on Wednesday… 

To recap… The markets for the most part have been closed since Thursday evening, as the Good Friday and Easter Monday holidays that surround the holy day of Easter, have seen little to no trading…  So, Chuck goes out on a limb and talks about some things on his mind… Not all things on his mind, for he doesn’t have the time or space to empty his brain!  HA!   Gold & Silver are down a bit this morning, and the currencies are flat to start the week… 

For What It’s Worth…  Ok, I gave a teaser above about this article and so to finish that, this is an article that really gets into the debt rise above $28 Trillion, and it can be found here: US National Debt Passes $28 Trillion, +$4.7 Trillion in 13 Months. General Treasury Account Down by $480 Billion in 2 Months, $620 Billion to Go | Wolf Street

Or, here’s your snippet: “It finally happened, that glorious moment, when, after teetering on the verge for weeks – for reasons we’ll get into shortly – the incredibly spiking US gross national debt, after kissing the line a couple of times for a moment, finally, and suddenly by a big leap, jumped over the $28-trillion mark, with a $143-billion leap in one day on Wednesday, March 31, following some big Treasury sales. It gave some of that up on Thursday as some bonds matured. And it now amounts to $28.08 trillion, as per US Treasury Department on Friday.

The US gross national debt has now spiked by $4.7 trillion in 13 months since the end of February 2020, in the days before this show started.

During the final months of the Mnuchin Treasury, it was decided to start spending down the balance in the checking account by borrowing a little less, and by early January, the GTA had dropped to $1.6 trillion.

Early on in the Yellen Treasury, the drawdown was formalized. In early February, a schedule was announced: the balance would be brought down by $1.1 trillion to $500 billion by June. And they’re now well into it.

The drawdown has the effect that the government spends money it doesn’t have to borrow at the moment because it already borrowed it last spring when the Fed was still monetizing essentially all of the borrowing. This has some implications for the markets.

The government’s TGA is at the Federal Reserve Bank of New York and is reported weekly on the Fed’s balance sheet as a liability (banks report deposit accounts as liabilities) because this is money the Fed owes the government.”

Chuck again.. Basically what’s happening here folks is that the Gov’t now spends the proceeds from debt sales last spring that the Fed had monetized back then?   I really don’t know how the markets will take this development, but, in my mind I believe that the markets should punish the dollar for these monetary crimes… 

Market prices 4/5/2021: American Style: A$ .7629,  kiwi .7046,  C$ .7969, euro 1.1759, sterling 1.3866, Swiss $1.0610, European style: rand 14.6130, krone 8.5421, SEK 8.7510,  forint 306.61,   zloty 3.9004,   koruna 22.1271, RUB 76.39, yen 110.51, sing 1.3440, HKD 7.7758, INR 73.32, China 6.5660, peso 20.26,  BRL 5.7060,  Dollar Index 92.96,  Oil $59.71,   10-year 1.73%, Silver $24.92, Platinum $1,197.00, Palladium $2,696.00, Copper $3.97, and Gold… $1,723.50

That’s it for today… Well, a fantastico day, weather wise yesterday, led to a huge backyard Easter celebration with family yesterday…  My little Evie, was so darned cute and is getting around free and easy these days! It was great seeing some family members that I hadn’t seen in 3 months…  The grandkids hunted eggs, and the food was great! A grand time was had by all! Well, my beloved Cardinals started the season on the right foot, and then stumbled the next two games, and now head to Miami after losing 2 of 3 to the Reds… Deep Purple takes us to the finish line today with their rock classic song: Smoke On The Water…   I hope you have a Marvelous Monday, and will be Good To Yourself!

Chuck Butler