Author: admin

February 16, 2021

* Currencies & metals have a rough end of the week… 

* But the overnight markets, last night, bring about dollar selling! 

Good Day… And a Tom Terrific Tuesday to you!  Well, I sure hope you had a nice weekend… I’ve heard from folks back in the MidWest, and they didn’t have a nice weekend, as frigid cold temps and multiple inches of snow put the kyboshes on most Valentine’s Day celebrations…  My darling daughter Rachel was kidding when she asked me yesterday if I missed the weather there, and I replied, “yeah, I miss it like the plague”!    It was sunny, a little breezy, and 80+ here yesterday… Now that, I can truly appreciate! I finished reading a book that I thoroughly enjoyed..  the book’s title is: The Spy and the Traitor, by Ben Macintyre… It’s nonfiction, but it kept me on the edge of my seat… One of my fave people in the world, Allison Baur, was given the name Allison Road, by me,  when she was a young girl… And her smiling face always lights up a room… And The Gin Blossoms greets me this morning with their song: Allison Road…  In honor of my favorite Allison!

Well, well, well, what do we have here? To start our day today, I have an interesting thought for you to consider… Do you recall the feel the day… the music died?  That song is on my mind this morning, as I relate it to the news over the weekend from the good folks at GATA… So, here we go… remember when I told you that I had doubts about whether or not the Trust company that stores the physical Silver for the Silver ETF, actually had the physical Silver to back up the total ounces represented by the ETF’s?  Ok, in case you forgot, there’s your reminder…  Now keep that in mind as I tell you about how  The silver exchange-traded fund SLV appears to have just amended its prospectus to acknowledge difficulty in sourcing metal for the fund.

The amendment warns that the fund now may be vulnerable to a “dramatic” short squeeze — like the recent short squeeze in GameStop shares that caused a worldwide sensation.  – UH-oh…

So, bye, bye Miss American Pie…  ETF holders of SLV now have to worry about whether or not the Trust Company has the physical Silver or not….    Questions 67 & 68!

Ok, now that’s a way to start a letter with a HUGE insinuation right from the get go! HA!  

The currencies & metals didn’t have good days on Thursday and most of Friday…  And the Dollar Index which on Thursday morning was 90.39, and on Friday at the close, the Index was 90.48…  The euro held in there for the most part, and began to come back on Friday late in the trading day.   Gold & Silver didn’t fare well either day… Gold lost $19 on Thursday, and 40-cents on Friday… Silver did better, but still lost on Thursday 5-cents, and on Friday Silver gained 20-cents…  Gold Closed on Friday at $1,824, and Silver closed at $27.46

Friday’s price action in Gold was something to behold… At one point in the day it was down to $1,810, down $14, but then it came roaring back to close at $1,824, down just 40-cents on the day…  One would have thought that this comeback in Gold would have carried over to Monday’s trading, but with the U.S. markets closed for the President’s Day / Mattress Sale Holiday, Gold lost $5.90 to close yesterday at $1,819.40 and Silver closed at $27.66

In the overnight markets, the dollar is back on the chopping block, with the Dollar Index falling to 90.14, the euro climbing, and dragging the other currencies along. Gold is down 80-cents in the early trading and Silver is up 6-cents… So, no real movements here with the Gold & Silver… Copper on the other hand is up to $3.81 this morning.. Another strong move higher for the base metal.. 

Ok, enough of that… I was sitting around the pool yesterday with some friends from our building, when of the ladies said, “Chuck can tell us about this”… She continued, “I read where China is attempting to take over the reserve status of the dollar”… I said, well, this all began in 2009, when China began signing currency swap agreements with its trading partners, removing the dollar from the middle of the terms of trade…  I then explained that China works on 100 -year plans, so this is not something that’s going to happen overnight, but it is something that China has been working on .I then explained that China needed deeper currency markets for the renminbi, and larger more open bond markets, and once they have established those two things, they can work on easing investor’s minds that the currency is from a Communist nation…

Another currency that investors just can’t get warmed up to, is the Russian ruble… Russia gets blamed for everything, but… What they don’t get blamed for is the expertly way they’ve been able to grow their economy while the U.S. and Eurozone economic sanctions remain in place. But… if you can get past the fact that its Russia’s currency, then you would find one of the very few currencies that still pay interest on deposits… And you would also find a currency that’s so tightly tied to the price of Oil…  As the countries of the world begin to spool up their respective economies, the price of Oil will, in my opinion, rise again, and that bodes well for the ruble..

Already the ruble has in the past 10 days rallied alongside the rise in the price of Oil… And speaking of the price of Oil, it has risen to trade with a $59 handle this morning…  Talk about looking forward when trading… 

Ok, remember me saying that I wasn’t jumping on the pound sterling bandwagon?  For those of you who aren’t following me here…  A couple of weeks ago, I talked about how the pound sterling was rallying, and really outperforming most other currencies, and I questioned the reason for the rally, saying to be careful out there….    And then over the weekend this blurb showed up in my email box…

“The U.K. economy contracted by 9.9 percent in 2020, initial estimates from the Office for National Statistics showed on February 12, 2021. A study of historical data by the Bank of England shows that recession to be the worst since 1709, the year known as the Great Frost, an extraordinarily cold winter in Europe, what was then a largely agricultural economy”  

Ok, so markets look forward, and not backwards, so they don’t care about the economy contracting 9.9% last year… But when you come from that low of a figure for economic growth, and the reasons for the contraction are two-fold, with 1. Being the pandemic, and 2. Being the U.K.’s debt levels, and neither of those two have gone away… One has to wonder what the markets are looking at in the future to warrant this rally in sterling…  I’m just saying…

Inflation fears are rising folks…  I talked a lot about inflation and the fears of inflation last Thursday, so if you missed that discussion, simply go to www.dailypfennig.com and read it there…  One of the key indicators that inflation fears are rising is the performance of the base metal, Copper…  And Copper, of which I’ve only very recently been reporting the price each day, has gone from 3.62, to 3.81  in price in the past few weeks…  Now, you might think that this move higher for Copper isn’t much compared to Bitcoin’s latest move, you would be right, unless of course you remembered, with my help of course, that copper is bought in HUGE quantities… So, to buy a Ton of Copper for wiring etc. this move in price would be very damaging to your bottom line…

And to add further on these inflation fears… The yield on the 10-year Treasury is on the move to higher ground, and this morning it trades with a 1.26% yield..  That’s nearly double the yield it traded at a few months ago…  The Bond Boys are telling us something, and I think it’s all about inflation… 

Did you hear the news late last week that the U.S. is moving along with their own version of a digital currency?  Just remember when one day you wake up to find that your dollars in the bank are now digits, that I warned you in the summer of 2020…  

And speaking of digital currencies, China has moved along with the implementation of their own digital currency, testing it in a few cities in the mainland…  So, far, so good, but then you wouldn’t expect to hear anything other than things were fine, from the Chinese, right? 

The U.S. Data Cupboard was guilty of non-performance last week, but it will redeem itself with this week’s fare of economic reports, and it all gets started tomorrow, with January reports of Retail Sales, Industrial Production and Capacity Utilization… So, the dollar gets to trade without burden of weak data another day today…

To Recap…  The currencies & metals ended last week on a down note, but in the overnight markets the dollar is back on the chopping block and all the anti dollar asset classes are on the rally tracks…  The U.K. just printed its worst economic performance since the “cold winter” and still pound sterling rallies…  And Chuck points out that the bond boys are telling us that inflation is rising with the rise of bond yields… 

For What It’s Worth…  I have to say that, while I’ve heard this speech before, it really lit the lightbulb over my head to bright! This is James Rickards, talking about a method used by FDR back in the 30’s to spur inflation, and how it should be used today… And it can be found here: The Only Way Out of the Death Trap – The Daily Reckoning

Or, here’s your snippet: “I’ve said the U.S. is caught in a debt death trap. Monetary policy won’t get us out because the velocity of money, the rate at which money changes hands, is dropping.

Printing more money alone will not change that.

Fiscal policy won’t work either because of high debt ratios. At current debt-to-GDP ratios, each additional dollar spent yields less than a dollar of growth. But because it must be borrowed, it does add a dollar to the debt. Debt becomes an actual drag on growth.

The ratio gets higher, and the situation grows more desperate. The economy barely grows at all while the debt mounts. You basically become Japan.

I’ve written about it before, but it bears revisiting, especially since there are newer readers who may be unfamiliar with it. Here’s how they can do it:

The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce. They could make that new price stick by using the Treasury’s gold in Fort Knox and the major U.S. bank gold dealers to conduct “open market operations” in gold.

The Fed will be a buyer if the price hits $4,950 per ounce or less and a seller if the price hits $5,050 per ounce or higher. They will print money when they buy and reduce the money supply when they sell via the banks.

The Fed would target the gold price rather than interest rates.

The point is to cause a generalized increase in the price level. A rise in the price of gold from $1,900 per ounce to $5,000 per ounce is a massive devaluation of the dollar when measured in the quantity of gold that one dollar can buy.

There it is — massive inflation in 15 minutes: the time it takes to vote on the new policy.”

Chuck Again…  Yes, it would create inflation and yes it would help with the debt levels, but… it would massively reduce the buying power of your dollars… So… it would behoove you to have at least a 20% allocation of physical Gold in your investment portfolio…  So, when your dollars get whacked, your Gold will be there to offset the losses in the dollar…  I’m just saying…

Market Price 2/16/21: American Style:  A$ .7796,  kiwi .7260,  C$ .7918, euro 1.2166, sterling 1.3928, Swiss $1.1265, European Style: rand 14.4520, krone 8.3661, SEK 8.2594,  forint 293.87,  zloty 3.6907,  koruna 21. 1378, RUB 73.36, yen 105.37, sing 1.3229, HKD 7.7523, INR 72.71, China 6.4568, peso 19.99, BRL 5.3684,  Dollar Index 90.14,  Oil $59.80,  10-year 1.26%, Silver $27.72, Platinum $1,299.00, Palladium $2,460, Copper $3.81, and Gold… $1,818.60

That’s it for today…   man am I ever getting bad at remembering birthdays!  I need to implement a calendar and record them and have them pop up each day to remind me to mention them! Last week, for instance, I forgot to mention the birthday of one of my fave people, Lisa Yanker… I sure hope her day was grand!  My computer still thinks I’m in St. Louis, and it gives me the weather each day when I turn it on… And this morning it said the temp was 0….  YIKES! Winters like I remember them being, Cold, and full of snow! Hmmm…  You don’t think that, no, it couldn’t be a return to the weather cycle of nasty winters…  Something to think about!   The great guitar player, Elvin Bishop takes us to the finish line today with his song: Traveling Shoes…    I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler

February 11, 2021

* Currencies & metals rally for a 4th consecutive day!

* What’s the deal with the Gov’t’s version of Consumer Inflation? 

Good Day… And a Tub Thumpin’ Thursday to you!  Well, both my fave college basketball teams were playing last night at the same time, which had me going back and forth to watch both the Mizzou, and St. Louis U games… I couldn’t stay awake for either one, and so when I woke up in the middle of the night, which is what I do almost every night, I checked my phone to see who won the games…   Mizzou got pummeled and SLU won… It was another beautiful day here, warm, with full sun, and umbrella blue skies…  The daily highs in temps here for the next 6 days will be about the same, before we see the highs dip into the 70’s again… I absolutely love this weather!  An old friend who used to come to Spring Training with us, before bowing out, Big Jay, used to say, “the weather is the same every day, sunny and 80”… And if he were going to be here this week, that would have held true for him! Gerry Rafferty, greets me this morning with his song: Get It Right Next Time…  Gerry Rafferty also sang for Steeler’s Wheel, back in the day… And we lost him way too early… 

Well, the Dollar Index lost more ground yesterday, but not a huge chunk of ground, but lost ground nonetheless. In the FWIW section today, I will have an article on the Dollar Index, so make sure you don’t change channels! So… it was the 4^th consecutive day of dollar weakness, and I’m of the opinion that this is exactly what the Cartel heads want to see… A slow grind down for the dollar, so that people don’t try to hit the exit door at the same time… Sort of like the old story about how if you put a frog in boiling water, it’ll jump out immediately. But if you put him in warm water, and slowly turn the heat up, the frog will never notice it, until it’s too late!

And one way to keep the dollar from falling off a cliff, is to keep a lid on what people think is the real Consumer Price Index (CPI)… Yesterday, the stupid CPI showed a .3% gain, which was widely expected to happen, but Core Inflation was flat, no growth…  Really?  So food and energy, by way of deduction here was up .3%… Since the total number was .3%, but when taking out food and energy, it was flat, then Food and Energy was .3% higher…

You know, when my wife tells me that the prices at the grocery story are higher every time she goes back, then you know that food prices are rising, and that’s a form of inflation…  And the game keeps getting played by the Gov’t… Telling people lies about what the real inflation rate is… John Williams over at shadowstats.com, who calculates how CPI was computed before Clinton and Greenspan worked their magic with hedonic adjustments, says that real CPI is north of 5%… Now what do you think investors would be thinking if the Gov’t printed a 5% CPI? Well, I can tell you that they would be thinking of dumping dollars quicker than NY Minute!

And like I told you yesterday, the Chapwood Index shows inflation is around 10%…   Longtime friend, Bill Bonner explains the two kinds ways inflation is derived… So, here’s Bill from his letter yesterday, that can be found here: Bill Bonner’s Diary – Daily Newsletter | Rogue Economics

“Either the economy heats up (cyclical inflation)… and businesses need more labor and raw materials to keep up with the demand. Shortages then arise. Everyone tries to keep up with the whirlwind of getting and spending, leading to higher prices…

Or… the other possibility (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.”

Chuck again… And the latter of those two are what we are looking at now folks…  Sure I’ve told you before that the velocity of money was the key to rising inflation, but this systemic inflation is real… and scary… 

Ok, so the currencies gained small amounts yesterday, nothing to write home about, but the Dollar Index which yesterday morning was 90.47, ended the day at 90.43, after hitting a low of 90.37. So, from this index you can see just how small the moves in the currencies were… But as I described yesterday, still making progress, which is important… 

Gold gained $4.60 yesterday, to close at $1,843.40, and Silver lost 20-cents on the day to close at $27.12…   But Gold was higher during the day by $12 more, which the price manipulators couldn’t leave alone… This current rally in Gold, from reaching a low last Thursday morning, has gotten its legs under the shiny metal’s price, and that’s a good thing… it doesn’t mean that the Gold rally is a One-Way Street upward, it’s just a good thing to follow… For if you haven’t bought your Gold by now, after all my hinting and pointing you in that direction to do so, then you’ll need to wait for the next dip lower in the price, and buy on the weakness…  Buy the weakness, sell the strength… One of the first things I learned when I began in the financial industry in 1973…

You see, I had missed the starting semester of College in September 1973, because I was still traveling around the country in our VW microbus, playing my guitar and thinking that all I needed was a break, before becoming a Rock Star…. So, in Rocktober of 1973, I began at Stifel Nicolaus and it was just supposed to be a temp job until the next semester began…  I loved learning about markets, and how they worked and traded, etc. and I never went off to college… Instead, I opted for night classes, of which two of my classes were on economics… I would bet a dollar to a Krispy Kreme, what I learned back in the day, VS what they teach in econ classes now, would not be the same…  But I digress…

In the overnight markets, The Dollar Index has fallen further, so if things continue this way today, it will mark the 5th consecutive day of dollar weakness… Gold is down a buck in the early trading, and Silver is up a nickel! So, no real movements here so far today…  The CPI data yesterday stirred the blood hot in Gold traders and it began to move higher, but was cut off at the pass, and only allowed to gain $5…  The euro is moving higher in the 1.21 handle, and the Petrol Currencies are back on the rally tracks, with the price of Oil staying above $58… 

The price of Copper has really moved higher in the last week… When I first began to report Copper’s price it seemed that it remained at 3.62, every day…  But then last week it began to move higher, and today Copper is trading at $3.76…  A friend of mine that has to buy copper for wiring, asked me what was going on with the price of Copper, and I told him that it was inflation fears…His customers were not happy with that for sure, but it is what it is… 

The U.S. Data Cupboard, only has the Weekly Initial Jobless Claims suite of data prints today… Remember what I told you last week that you shouldn’t pay attention to the continuing claims behind the curtain, for once the continuing claims run out, the person is no longer counted at unemployed… And they certainly are no longer receiving their continuing claims, so they get dropped!  Like I described yesterday, makes about as much sense as a tanning booth at a nudist colony! 

And we’ll end the week, tomorrow, with the Data Cupboard still lacking at best, to produce a print of real economic data…  And next week will start off slow, staring with nothing on the Monday President’s day Holiday, and won’t get around to printing anything worth looking at until Wednesday, when Retail Sales and Industrial Production and Capacity Utilization will print… That seems to me to be a long time from now, especially with the Monday holiday in the middle…

The reason this is something to talk about, the lack of data, is that the last real piece of economic data was last Friday’s Jobs Jamboree, which was downright awful/ weak. So the bad taste of that report is still in the mouths of currency traders…  But it’s wearing out, and they need something else to reinforce their belief of the need to sell dollars…

To recap…  it was indeed the 4^th consecutive day of dollar weakness yesterday… Gold gained, but Silver lost, and the Dollar Index keeps going down, to the ground, to the earth… And pretty soon, it could reach lows it hadn’t seen in several years! Chuck stays strictly to the markets that he covers today, without any straying into fields that get him in hot water with some readers, so that should make everyone happy!

For What It’s Worth…  Well, for some time now, the good folks at FXStreet.com have posted my Pfennigs on their site, and then posted them on Twitter, so when I saw this report from them on the Dollar Index, I though that I should return the favor! So that’s the FWIW article today, from the FXStreet.com and it can be found here: US Dollar Index Price Analysis: DXY drops further below key support to refresh monthly low (fxstreet.com)          

Or, here’s your snippet: “DXY bears attack late January lows during the four-day declines.

• MACD flirts with bears, sustained trading below key SMAs nd trend line suggest further weakness.
• Confluence of 100-day SMA, 50% Fibonacci retracement adds to the upside filter beyond the monthly top.

US dollar index (DXY) remains depressed around 90.40, intraday low of 90.37, ahead of Wednesday’s European session. In doing so, the greenback gauge stretches Friday’s U-turn from a two-month top towards attacking the lowest since January 29.

Also portraying the bearish momentum could be the gauges downside break of a short-term support line, stretched from January 06, marked the previous day, as well as receding strength of the bullish MACD.

Even so, 50-day SMA near 90.40 restricts the dollar moves while joining hands with 23.6% Fibonacci retracement of November-January downside.

Overall, the bears have an upper hand over the USD bulls but are waiting for the fresh impulse to attack the 90.00 threshold, needless to mention about the yearly bottom surrounding 89.20.

Meanwhile, the corrective pullback may attack the previous support line, at 90.76, but further recoveries will have to refresh the multi-day top beyond 91.58 to attack the key hurdle around 91.75, including 50% Fibonacci retracement and 100-day SMA.”

Chuck again… Technicals are something that I’ve never really depended on, as they normally tell you why something happened after it happened, but once in a while you get something that looks forward, and this is what they are doing here…

Market  Prices 2/11/21: American Style: A$ .7750,  kiwi .7230,  C$ .7890, euro 1.2130, sterling 1.3827, Swiss $1.1236, European Style: rand 14.6404, krone 8.4566, SEK 8.3118,  forint 294.34,  zloty 3.7094,  koruna 21.2483, RUB 73.82, yen 104.70, sing 1.3242, HKD 7.7526, INR 72.79, China 6.4442, peso 19.94,  BRL 5.3799,  Dollar Index 90.39,  Oil $58.29,  10-year 1.14%, Silver $27.16, Platinum $1,256.00, Palladium $2,440.00, Copper $3.76, and Gold… $1,843.50

That’s if for today… And tomorrow, and Monday as well..  Well, you still have a couple of days to secure a Valentine’s Day President for your sweetheart…  On Saturday this week it’ll be my very good friend’s birthday.. .So Happy Birthday Duane! It would also have been my oldest sister’s birthday… We lost Brenda to cancer a very long time ago now, but as I did the night before when I heard the song: Tell It Like It Is, by Arron Neville, I’m reminded of how she taught me to slow dance to that song… I’ve lost both my older sisters, and at times like this I find that I miss them terribly! The Turtles takes us to the finish line today with their song: Happy Together…  “no matter how they toss the dice, it had to be, the only one for me is you, and you for me, so happy together!  I hope you have a Tub Thumpin’ Thursday and a Fantastico Friday tomorrow, and Please Be Good To Yourself!

Chuck Butler

 

 

February 10, 2021

* currencies & metals gain a 3rd consecutive day… 

* Gold & Silver keep pushing higher… 

Good Day… And a Wonderful Wednesday to you…  No local St. Louis, or Missouri teams were playing last night, so Kathy and Chuck went to dinner with friends, Pete and Karen… A good time was had by all, and Chuck had some of the best tasting pastrami ever! I realized yesterday that I had been very bad about remembering birthdays… But to my defense they did happen while I was very sick for a few days… So, Happy Belated Birthday wishes to: Chris Gaffney and Christine Peplow, two of my former colleagues on the World Trading Desk…  My bad, My bad on that one.. But they shouldn’t feel too badly, because I also missed my youngest brother’s birthday… I’m very sorry about that Michael!  I guess that when you get to my age, that remembering birthdays is like remembering the Gettysburg Address! Four score and seven years ago, Our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. We are now engaged in a great Civil War.. And from there, I would have to go to Google to get the rest, But in my elementary years, we had to recite this address in front of the class, and I aced it!  At least that’s how I remember that going! HA! The Walker Brothers greet me this morning with their song: The Sun Ain’t Gonna Shine Anymore… “the moon ain’t gonna rise in the sky… The tears are always clouding your eyes, when you’re without love”…

Well, that was a long intro this morning… And I’m not beating around the bush here this morning either… It was another good day for the currencies, led by the Big Dog, euro, and while Gold & Silver were not able to hold onto their early trading gains, Gold did find a way to gain $7.40 while Silver ended up the day down 1-cent…  So, in my books that’s a 3 consecutive days of rallies for the currencies and metals…

The euro added to its gains above 1.21 on the day, to end the day at 1.2130… And like I said yesterday, the trader sentiment toward owning dollars right now has certainly changed… At first, on Monday morning, I only saw the weak Jobs numbers as the reason for the change in trader sentiment, but, as the time grew on, I realized that it probably had a lot to do with the fact that the $1.9 Trillion Stimulus is on the fast track of approval… And if there’s anything that gets traders upset about owning dollars is the ideal of more debasement of dollars!  And of course that’s exactly what we would have when the Gov’t beings passing out the stimmy checks!

And that my friends is what I’m going to talk about a lot this morning… Debasing the dollar… Every time the Fed & Treasury decide to print more currency, the current stock of dollars outstanding get debased even more…  This Thursday, good friend Dennis Miller is going to take on the, what I call, The Magic Money Tree… And if you don’t think that not having any spending restraints, which is what the Magic Money Tree (MMT) is all about, isn’t goin to debase the dollar by large amounts, then you’re drinking the gov’t’s Kool-Aid… Because it will, and a weaker dollar allows other countries’ inflation to be imported into the U.S. economy…  There’s no two-ways about this, either, so don’t go looking for one…

Many, many years ago, when I was writing for Mark Twain Bank, and Japan was going through their exercise of stimulus packages, and Quantitative Easing, and so on, I wrote about how if Japan really wanted to introduce inflation into their economy, they should allow the Japanese yen to weaken, which would bring inflation into the Japanese economy…  But did they listen? No… And even during the years when the dollar was getting stronger, the yen remained just as strong… And so here Japan is some 25 years later, and still no inflation…

Ok, back to the U.S. and their grand experiment to bring inflation into our economy that hasn’t been prevalent since Paul Volcker killed it in the 80’s…  Yes, the Chapwood Index, which I introduced to you, dear reader over a year ago, still has U.S. inflation around 10%, but that’s dealing with things the right way, and not the way the U.S. Gov’t chooses to do so… For if they did, citizens of the U.S. would be screaming bloody murder about how the Gov’t allowed inflation to get away from them!

So it was only a matter of time before the lightbulb over currency traders went on, and made them realize what the Cartel and Treasury were dong to the dollar, and allowing inflation to become a thing to have to deal with, all the while eating away at each citizen’s buying power, as the dollar goes on an extended ride down the slippery slope…  With that scenario, is it any wonder that currency traders’ collective sentiment would change about owning dollars?

So, be sure to check out www.milleronthemoney.com tomorrow if you don’t subscribe to his letter, and read about the Magic Money Tree, and while you’re there, sign up! Dennis and I share ideas all the time, so you might read something there that you didn’t read here, from me! 

In the overnight markets, there was some slippage in the currencies, but they are still stronger this morning than they were yesterday, for the most part, and Gold is up $2, and Silver is up 4-cents in the early trading today. The euro which reached 1.2130 yesterday, and slipped back to a 1.2116, level, but that’s small potatoes folks… So the slippage has be nascent at best… 

So, as we start our Wonderful Wednesday, this is the 4th consecutive day of dollar weakness… I fell that it’s important that Gold & Silver show progress every day, even if it’s a buck or two for Gold and a couple of cents for Silver. I liken this thought to the thought that I’ve always held about football games… The offense needs to gain 10 yards to get a new fresh set of plays. Each play it is important that they gain ground, no losses, no penalties, progress on each play, and that way it’s easier to gain the 10 yards… 

The U.S. Data Cupboard is still lacking any real economic data today. The stupid CPI (consumer inflation) will print for January along with the Core Inflation data… Where they take food and energy out of the inflation calculation, which makes about as much sense as owning the tanning salon at a nudist camp. It’s not like we the people don’t use eat every day, and use energy… Come on throw us a bone here and admit that we’re smarter than the average bear! 

The Federal Budget is due to print today, but sometimes the Gov’t accountants get behind and the data doesn’t print on time… When that happens you’ve got to use imagination as to why it didn’t print. I’ve always contended that it was ready to print but the number wasn’t what the Powers that be want it to be, so they have to go back and massage the numbers, cook the books, and see what comes out then…  That’s my story, and I’m sticking to it! And my first wife was a young Elizabeth Taylor!  (I love the humor of John Lovitz!) 

To recap… it’s the 4th consecutive day of dollar weakness today, as least so far this morning it is…  Trader sentiment has really done a 180 on owning dollars, and there’s two things that have caused this to occur… The weak jobs data last Friday, and the fast track that the Stimmy Checks, i.e. currency printing, thus debasing the dollar, is apparently on..  Chuck talks about this debasement of the dollar this morning, and how that’s going to effect your personal buying power…  And then he goes on about positive movements that are needed… 

For What It’s Worth…   You know I’ve had many questions through the years, asking me why invest in gold when the price is manipulated?  And recently I highlighted a note from the good folks at GATA regarding how investors are realizing that the Central Banks are rigging the price of Gold & Silver… And this is a note from GATA, (so no link, just whole article) of a response they received after printing the article just mentioned…   And so, here you go…  The response, and the answer from GATA Sec. Treasurer is below… .

 

Here’s your full article: “Our old friend C.W. took issue yesterday with the dispatch about the GATA-supporting analysis of Matterhorn Asset Managemenet’s Matthew Piepenburg, which was posted at King World News and which, your secretary/treasurer wrote, indicated that investors are starting to recognize that market rigging by central banks is especially directed against gold and silver:

http://gata.org/node/20887

C.W. wrote: “But isn’t that the whole point of the rigging? It’s so much more effective if investors recognize it is happening and who is doing it, which is why it is done on such a consistent and obvious basis.

“So I don’t think that the general recognition of the rigging means we are closer to its end. Rather, it means it will be more effective as investors realize they can’t win the battle with gold and silver and so invest elsewhere.”

Your secretary/treasurer had to agree with C.W. that central banks, having been forced into more blatant episodes of market rigging, may be glad if people realize, informally, that central banks will do whatever has to be done to defeat alternative currencies.

But, your secretary/treasurer added:

— The scheme of the central banks doesn’t work if people also start to realize that they can achieve and benefit from an alternative currency only if they avoid the futures markets, which central banks easily can control by virtue of their power to create infinite money and trade infinite amounts of things that don’t exist.

— Eventually, if the rigging gets too blatant, even mainstream financial news organizations might feel compelled to report about it and raise questions that central banks can’t answer without putting themselves in political jeopardy.

— Also eventually, if the rigging is generally understood around the world, nations that are not benefiting from it — like nations where gold is produced — may protest and even try to pull the plug on the rigging. Many smaller countries could pull the plug on it just by selling U.S. Treasuries and buying relatively small amounts of physical gold, since supply seems so tight.”

Chuck again… All excellent points Mr. Secretary/ Treasurer… And one’s that I’ve pointed out in previous answers to those questions I’ve received… 

Market  prices 2/10/21:  American Style: A$ .7728,  kiwi .7212, C$ .7875, euro 1.2116, sterling 1.3834, Swiss $1.1214, European Style: rand 14.7134, krone 8.4439, SEK 8.3183,  forint 295.25,  zloty 3.7000,  koruna 21.3779, RUB 74.04, yen 104.78, sing 1.3263, HKD 7.7522, INR 72.82, China 6.4393, peso 20.13, BRL 5.3784,  Dollar Index 90.47,  Oil $58.70,  10-year 1.17%, Silver $27.28, Platinum $1,222.00, Palladium $2,428.00, Copper 3.72, and Gold… $1,840.96

That’s it for today… Whew, I can tell you that Kathy wasn’t here, I would not be up writing at my usual time this morning. I would have slept for a few more hours!  It’s so quiet here when I’m alone… I’m just saying… But it was good for me to get up and get to writing!  Tonight, my beloved Missouri Tigers will travel to Ole Miss and the game comes on late down here, so I’ll be up late once again! UGH!  A full sun day here yesterday, and my weather app told me it felt like 89 degrees! The local leaders are doing some beach restoration here after the storms of last year, and the beach is looking great!  You know, there must not be many people traveling to Florida this year, for the roads aren’t that crowded, and beach doesn’t have many people on it, which is fine with me! The Allman Brothers take us to the finish line today with their instrumental song: In Memory of Elizabeth Reed… In one of the variations of bands I played in through my early years, one of them was a bluesy band, that played lots of Allman Brothers songs, like this one… And Grand Funk Railroad, which in the early days of the band their music was miles of difference from what they did later in their careers, when they became more pop.  For instance, Inside Looking Out, VS The Locomotion…  a song originally done by Little Eva… Ok, sorry for the long dissertation on Bluesy music… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself!

Chuck Butler

February 9, 2021

* Currencies & Metals rally a 2nd Consecutive day

* What are investors thinking buying negative yielding bonds? 

Good Day.. And a Tom Terrific Tuesday to you! I was watching the news yesterday morning, with Robin Meade, when a story came across that talked about all the Super Bowl get togethers in Tampa had doctors fearing it could be a super spreader… And that got me thinking, didn’t they say the same thing about Christmas? I do believe that the numbers show that there was no such thing after Christmas… So, I thought to myself… Why do they keep wanting to keep us in fear?  Oh, well, I’m not a doctor, and I didn’t stay at a Holiday Inn Express last night, so I’ll duck out of this discussion while I’m still talking about what I know!  The Blues played their 4^th consecutive game VS the Coyotes last night…   And the blew the game as the Coyotes scored a goal to tie the game with 0.5 seconds left in regulation! They they lost the stupid shoot out…    Let’s Go Blues!  Supertramp greets me this morning with their very appropriate song: Even In The Quietest Moments…

Monday was day two of the healing and rebound in the currencies and metals… Ever since the Jobs number came out last Friday, things have gone awry for the dollar bugs. And since there will be no real economic data this week, other than a couple more Cartel speakers, I doubt that this current two-day rally has much to stop it… That is as long as the PPT stays away…

The euro pushed higher in the 1.20 handle, and the Aussie dollar (A$) gained almost 2/3rds of a cent… While the dollar bugs were scrambling across the floor to get out of the spotlight, Gold added another $15 to their $21 gain on Friday… Gold closed at $1,831.40 and Silver which was up 49-cents, closed at $27.33… And don’t look now, but the price of Oil added more girth to its price and is trading with a $58 handle this morning. The Dollar Index traded yesterday morning at 91.16, and closed the day at 90.87, and is trading at   90.58   this morning. So, it’s in a free fall again… 

In the overnight markets, there was more dollar selling, and the euro has pushed through the 1.21 handle once again…  Gold is up $12, and Silver is up 35-cents in the early trading… So, as I said the sentiment toward the dollar has changed once again… The Safe Haven currencies of euros, yen and francs are all on the rally tracks, and Gold is moving higher, while Treasuries are getting bought, reducing the yield, and the only stickler this morning is the price of Oil, which lost the $58 handle it briefly held yesterday… 

So, recall last Monday, when it seemed Pandora’s box of short Silver secrets were about to be laid bare? The Wall Street Bets (WSB) folks, after causing 2 hedge funds to close that were short GameStop, had switched their attention to the Silver Shorts…  I had said that day that this will be a bigger nut to crack, and now the dirty deeds done dirt cheap are out of the bag…  Last week, the Big Bullion Banks added more new shorts in the reporting week ended Tuesday than in any other week (save one) in the last few years. The four big silver shorts added an astounding 6,672 new shorts (33.4 million ounces).  And needless to say, the attempt to cause a short squeeze had failed to get off the ground. But there’s still hope for them, and that is why supply of Silver coins is dwindling and what’s left has had a huge markup on placed on them over spot… So, demand is still strong, and that the WSB folks can be proud of…  Full disclosure here, I pulled some of the numbers above from an email that the GATA folks sent me yesterday…

So, the short squeeze enthusiasts were headed off at the pass, by the Bullion Banks… I don’t know… But maybe these folks attempted to put a short squeeze on Silver might not want to advertise what they are doing ahead of time, so that the Bullion Banks can’t head them off at the pass?

Alrighty then, let’s talk about something else… You know, I’m very amazed at how strong the British pound sterling is these days, and how just about every day, it moves higher VS the dollar. The reason I’m thinking that this rally is suspect, is that The Bank of England (BOE) has made no qualms about thinking that the U.K. economy needs negative rates… And while negative rates don’t necessissarily point to currency weakness, it certainly isn’t a reason to buy the currency!  The euro, yen, and francs have done OK, VS the dollar, with their negative rates. But they’re versions of negative rates have been in place for some time now, and the markets have gotten used to them… The BOE’s journey into negative rates I don’t think will be met with more sterling buying… So Be Careful out there!

Oh, and there’s something like $19 Trillion in Gov’t bonds with negative yields on the global markets… What a few Trillion more?  And if they counted “real yield”, where you subtract inflation from the yield, to get the real yield, then the U.S.’s stable full of Treasures would be added to the mix…  And people buy these negative yielding bonds?  Instead of getting paid for safety, you’re paying for it!  What on earth are these people thinking?

The U.S. Data Cupboard is still searching for something, anything in the form of a data report to print, and today it will find nothing! The only thing on the economic calendar is a scheduled speech by St. Louis Cartel President, James Bullard…  Who is a dove, but has really disappointed the doves in recent times. Bullard used to be known as someone who said what was on his mind, and not what was on the minds of the inner circle of Cartel heads… I’m just saying… 

What on earth is going on with this country’s leadership? I read a report yesterday, that Congress is thinking of proposing and playing the Universal Basic Income (UNI) card, very soon…  See? Didn’t I tell you that this was next on the agenda?  The country has gone to the stimmy checks three times now (the 3rd time is coming) and each time as soon as the checks were out the door, there was clamoring for more, just like I said would happen right after the 1st stimmy check was approved.  

I just don’t get it folks…  Back in the day when I ran The Everbank World Currency Desk, I used to have a saying to get people back on track, that would be: “doesn’t anyone want to work any longer?”  Which had the same effect on them as when I was a kid and my dad would just hang his belt on the door knob to let us know to settle down…  but that question takes on new meaning, with UBI for if you’re giving people money for nothing and the chicks are free (dire straits) what incentive do they have to work?   I’m just saying that someone with some gray matter should think of the collateral damage of UBI… 

To recap… Monday marked two consecutive days of rallies by the currencies and metals. Ever since the Jobs Numbers last week were woeful at best, trader sentiment has changed once again, and they are now thinking that owning dollars going forward are not a good idea… And in the overnight markets it appears that we’re headed for a 3rd consecutive day of dollar selling… Chuck points out that the Bullion Banks added millions of ounces of short Silver paper trades to head the short squeeze folks off at the pass… And Chuck points out that the pound sterling’s recent rally doesn’t really have two strong legs to stand on… And what on earth is Congress thinking of now? 

For What It’s Worth… Well when will this “tell on your neighbor” stop? Until neighbors are at each other’s throats?  This wasn’t a neighbor so to speak, but  we have this from blacklisted news that talks about the call for a boycott of Bank of America, and it can be found here; Calls for Bank of America boycott grow after data given to FBI (blacklistednews.com)

Or, here’s your snippet:” Customers are calling for a boycott of Bank of America, after a report that the bank handed over the account information of hundreds of innocent people in connection with the Jan. 6 deadly riots at the Capitol.

At the request of the FBI, the country’s second-largest bank allegedly snooped through information of anyone making certain purchases in and around Washington before and after the riots, and handed over the information of 211 people, according to Fox News’ Tucker Carlson.

Only one of those 211 people was brought in for questioning, and none of them were arrested, according to Fox’s report.

Federal investigators reportedly asked Bank of America for information on customers who made debit or credit card purchases in DC, reserved hotels and Airbnbs in and around the capital, patronized weapons store and made airline reservations within the timeframe surrounding the attacks.

Now, customers and non-customers alike are calling those reported actions an overreach, and taking to Twitter to announce they are canceling their accounts and calling on others to do the same.

“‘Bye bye, Bank of America’: Outraged customers boycott firm as it’s revealed the bank snooped through HUNDREDS of innocent people’s accounts looking for Capitol rioters – so who else is doing it?,” one user posted.

“Time to get out of Bank of America. Boycott them,” wrote another.

“The customer should SUE @BankofAmerica unless there was a subpoena involved!,” another user commented.

Bank of America released a statement Friday about the claims: “We don’t comment on our communications with law enforcement.  All banks have responsibilities under federal law to cooperate with law enforcement inquiries in full compliance with the law.”

Chuck Again… We The People will rise up and take back our civil rights and privacy! Well, at least we’ll try. I say that because BOA is a HUGE conglomerate of Banking…  But I will say good for those raising concerns with BOA…

Market Prices   2/9/2021: American Style: A$ .7715, kiwi .7225, C$ .7855, euro 1.2105, sterling 1.3772, Swiss $1.1189, European Style: rand 14.7859, krone 8.4719, SEK 8.3548,  forint 296.39,  zloty 3.6983,   koruna 21.2496, RUB 74.41, yen 104.68, sing 1.3277, HKD 7.7515, INR 72.91, China 6.4527, peso 20.05, BRL 5.3662,  Dollar Index 90.58,  Oil $57.92,  10-year 1.15%, Silver $27.68, Platinum $1,186.00, Palladium $2,396.00, Copper $3.65, and Gold… $1,843.60

That’s it for today… I stayed up to watch the hockey game last night, which is two late nights in a row for me, on school nights, no less!  I’ve got to say that the $40 I spent on a device that takes what is on my iPad and converts it to my TV, has been some of the best $40 dollars I’ve ever spent!  Hey! Great news for my beloved Cardinals, as they announced that catcher Yadi Molina is signed for another year, which would probably be his last year, that is unless father time decides to bless him with young legs! It’s been a good offseason, albeit later than usual, for the Cardinals, and now they are set to begin Spring Training! The sunrise over the ocean this morning was simply beautiful…  I like sunsets too… But since this is where I am, I get the sunrise, and truly enjoy it!  The Righteous Brothers take us to the finish line today with their love song: Unchained Melody…  “Woah, my love, my darling, I’ve hungered for your touch”  And with that, I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself! 

Chuck Butler

 

February 8, 2021

* Currencies & metals rally on Friday after weak jobs #

* Another week, of poor economic data last week… 

Good Day… And a Marvelous Monday to you! Well, that wasn’t much of a Super Bowl last night… the game was over before half-time, in my opinion… Congrats to the Tampa Bay Bucs on their second Super Bowl Championship win…  My state’s basketball teams fared better than our state’s  NFL team, as Mizzou beat Alabama, and St. Louis U  beat St. Bonaventure, Both wins were against the leader of the conference.. So, big wins for sure! It was kind of a blah weekend weather wise here in S. Florida, but tons better than back home! Well, baseball has decided that it will start on time, which means by the end of next week, pitchers and catchers will be reporting. The first spring training game is Feb. 27^th…  My first game will be Feb 28^th…  Things will be very different inside the stadium this year, but at least I’ll get to watch my beloved Cardinals play day baseball! For all us old timers this morning, Ray Charles greets me with his song: You Don’t Know Me…

Well all the dollar bugs had their week last week, but it ended on Friday, as both the currencies and metals rebounded… The outcome of the Jobs Jamboree didn’t help the dollar bugs any. I’ll talk more about the data from late last week later in the letter… I was happy to see Gold gain $21.30 to close at $1,815.20, and Silver gain 64-cents to close at $27.24…  The euro also rallied moving up and over the 1.20 handle that it had fallen through last week.

In the overnight markets, there’s been some firming up of the gains that were made on Friday, and Gold is up a buck in the early trading, and Silver is up 11-cents… So, no real movements in the overnight markets… Sammy Hager is singing his song: Rock-n-Roll Weekend on the iPod right now, and that got me thinking about how it certainly wasn’t a Rock-n-Roll weekend for the dollar bugs, as their hold on the currencies & metals was ripped from their hands on Friday, and the while there were other reasons for this to happen on Friday, it was really a case of the rotten results of the Jobs Jamboree… 

And that begs the question, “will the poor Jobs Jamboree, untether the currencies & metals to move higher VS the dollar, and not just be a one-and done deal? ”  Well, I have to say that in my humble opinion, which could be wrong, but rarely is, I’m thinking that if we saw more economic data this week that could continue to push the dollar bugs back into the wall boards, but that’s not the case this week, as the Data Cupboard is lacking at best for economic reports that matter this week. So, the answer to the question is really a tossup at this point… We’ll have to wait-n-see… 

I read an article this weekend that the GATA folks sent me that, talked about that investors are starting to recognize that market rigging by central banks may be most heavy-handed in the gold and silver markets. I would certainly hope so! And that got me thinking about many years ago. We had some traders come visit us at EverBank World Markets, and in a side bar, that asked, me, “Do you really believe that Gold & Silver prices are manipulated?” I laughed at them and said, “yes, don’t you?” They then went into the company line of how there’s no proof…  I said to them did you read the full-page ad that the GATA folks took out in the Wall Street Journal? I wonder what those traders think these days all these years later?

Of course, if those two traders are still employed at that position, I’m sure while they may think there’s manipulation, they would have to hold the Company line on manipulation… BTW these guys were from JPMorgan, need I say more?

The yield on the 10-year Treasury is still moving higher and sits this morning with a 1.19% yield… What are the bond boys telling us?  Well, I don’t know if it’s them telling us anything, but more of a realization that when the Cartel isn’t in buying bonds, there’s little demand around the world for Treasuries…  And that, my friends, is a real problem that’s brewing for us… just to give you a heads up… 

And the price of Oil continues to move higher too… The Petrol Currencies have finally taken notice and gained some ground on the dollar. Has the price of Oil moved too far too fast?  Good question, Chuck! I guess we’ll see in the coming days… 

OK… Well, the Unemployment situation in this country is not good, and not getting better.. .Don’t pay attention to that data behind the curtain!  The Unemployment Rate dropped from 6.7% to 6.3%, when we only added 49,000 jobs, in January, which didn’t even recover the 227,000 jobs that were lost In December! So, riddle me this Batman… How does the Unemployment Rate fall, when we’ve not added any new jobs in 2 months?  Ahhh, grasshopper, I’ve explained this before, but for those of you new to class…  You see, the Gov’t doesn’t count you as being unemployed, after your unemployment benefits run out… Makes sense right? NOT!  You’re still unemployed, but not being counted as such!   Stupid, Stupid, Stupid!  But that’s the Gov’t for you, eh?

Why not come clean? Why not tell the truth to the people?  Because they can’t help themselves but to lie to the people, that’s the way it’s always been done, right?  Well, I don’t know about that, but at least since the 90’s… For it was during the Clinton administration that we changed the way consumer inflation is calculated, so that interest rates could be lowered, and everyone could afford a house… This was, in my opinion, the beginning seeds of the Housing Debacle… But I digress…

Also last week, the Weekly Initial Jobless Claims fell to 779,000, And while they seem to headed in the right direction, they are still way over the numbers that would reported pre-lockdowns… So, in other words, they are still very high!  You know I don’t care too much for the Productivity data, but when it falls to a negative -4.8% in the 4^th QTR, even I have to sit up and take notice…  A few years ago when Janet Yellen, now treasury sec., and then Cartel chair, was very concerned about the lack of productivity in the U.S. economy… I wonder what she thought of the 4^th QTR’s Number? 

There was also a surprise last week when Dec. Factory Orders gained 1.1%, down from Nov.’s 1.3%, but still was positive in the month when lockdowns were back for some states, including California the worlds 5^th largest economy…  yes, that’s right… even larger than the U.K.!  So, I don’t know how Factory Orders were still so positive, but I’m sure there’s a valid explanation… right? HA!

The U.S. Data Cupboard this week, starting with today’s empty cupboard, will be lacking at best!  So, there will be nothing here to either hurt or help the dollar this week… 

Before we head to the Big Finish today I wanted to talk a bit about something that’s been on my mind…  I read a report this weekend that talked about how the Bank of America had Bank of America economists  recently state that they see little optimism in terms of a reopening of the economy, and that hard lockdowns will return, possibly in March or April. And the reason for this? The Covid variant or mutation story that’s gaining speed…  

I would have thought that most economists would have seen the damage that was done not only to the economy but the social fabric of people by the first lockdowns, and shy away from even thinking about locking down again…  And that feeds into my conspiracy thoughts of how the Global Elitists have used the pandemic to speed up their quests to control the world…  I know, I know, you’re saying, Chuck, put away the tin foil hat! But I have to tell you that this is why I call the pandemic a plandemic… I’m dead serious about this stuff folks… 

One of the things that I’ve mentioned in the past about the current goings on is that during the lockdowns American consumers stopped using folding cash and strictly used their credit / debit cards… I could see the eyes of the Global Elitists widening with joy, because this lays the groundwork for their desire to have a digital currency…. 

To Recap… The Currencies & metals both rallied VS the dollar on Friday last week, with the Jobs Jamboree helping the dollar bugs to hide… Chuck talks about a GATA article talking about how investors are catching on regarding metals manipulation, and then remembers a conversation he had with some traders years ago… And then we do a deep dive into the data from last week.. .

For What it’s Worth…  Well, longtime readers know how wrong I was about the dollar losing its reserve currency status by the end of the decade… But I doubled down, and said it was still in the cards, it’s just taking longer than I first realized… And this article basically gives us the reasons why the dollar’s reserve currency status is questionable going forward, and it can be found here: DoubleLine Warns Events Are In Motion To Remove Dollar As Reserve Currency | ZeroHedge

Or, here’s your snippet: “For every action, there is an equal and opposite reaction. In the case of international trade and global payments, the U.S. made aggressive use of sanctions and tariffs. With some merit, Washington has argued that these actions level the playing field for global trade or punish bad global actors. But a series of equal and opposite reactions are occurring as nations move to remove the role of the U.S. dollar at the center of global trade and finance.

Over the past years, the U.S. set out to address inequities in the global trade environment by imposing tariffs and sanctions on various countries from China to Mexico and Canada with the rewriting of the North American Free Trade Agreement into the United States-Mexico-Canada Agreement. Even the countries in the European Union were affected. In addition, Washington implemented sanctions against Russia in 2014 in response to Moscow’s annexation of Crimea, and more recently against Iran and Venezuela, effectively using the dollar’s role at the center of global trade and finance to force compliance of other nations. These actions impacted nations beyond those directly targeted by the U.S. action, and today many governments around the world are taking countervailing steps to remove their reliance on the dollar-based global trade and finance system that has reigned since 1944.

In November, 15 Asian countries, comprising 30% of global GDP, signed the Regional Comprehensive Economic Partnership (RCEP), creating a free-trade zone among the signatories. This agreement attempts to provide gains to trading within the regional partnership through reduction of trade and investment barriers, and increased incentives for economic integration. It is noteworthy that RCEP came about without participation of either the U.S. or Europe, and has effectively created the world’s largest trading bloc, according to the Rand Corp. Beyond the obvious benefits for economic growth in the region, a more-subtle byproduct of this agreement is to focus on bilateral settlement of trade, effectively removing the dollar as the standard unit of transaction for regional trade,”

Chuck Again…  Well, it’s not something I want to see happening but it sure seems to be in the cards… And while it’s quite evident, it’s just not imminent, right now… But one day it will be…  Got Gold? 

Market Prices 2/8/21: American Style:  A$ .7656,  kiwi .7186,  C$ .7825, euro 1.2031, sterling 1.3690, Swiss $1.1102, European Style: rand 14.9405, krone 8.5260, SEK 8.3928, forint 298.00,  zloty 3.7275,   koruna 21.4075, RUB 74.58, yen 105.61, sing 1.3355, HKD 7.7519, INR 72.98, China 6.4657, peso 20.18,  BRL 5.3612,  Dollar Index 91.16,  Oil $57.55,  10-year 1.19%, Silver $27.34, Platinum $1,156.00, Palladium $2,436.00, Copper 3.61, and Gold… $1,817.10

That’s it for today… Well, I’m not all by myself any longer…  The last two weeks went by very fast. Of course for 4 of the days, I was out of it, with being sick, and slept most of the time… I did some cleaning up of the place so that it didn’t look like I had turned to a slob! Kathy shared a picture with me of my darling granddaughter, Evie, all bundled up for the cold and snow… Reminded me of Randy in The Christmas Story! “ I can’t move my arms!”  I tried to talk to Evie on Facetime a couple of weeks ago, and she was much like most people I’ve known… out of sight, out of mind…  So, when I get home in April, I’ll have to reintroduce myself to her… I was informed that son, Alex will be here for a few days at the beginning of March. So, that will be fun…  The great soulful voice of Smokey Robinson takes us to the finish line today with his song: Cruisin’ … A song that’s getting played again as it is featured in a TV commercial… I could sit there an listen to Smokey Bill Robinson all day… So, with that, I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

 

February 4, 2021

* Gold & Silver are getting sold this morning… 

* The waning years of the Empire of Debt? 

Good Day… And a Tub Thumpin’ Thursday to you! Another nice win last night from my beloved Missouri Tigers basketball team, and they beat Kentucky! They have a big challenge on Saturday, when they’ll play the number 1 team in the SEC, Alabama… I’ll be glued to the TV for that one! I really don’t know where the day went yesterday… I never left the condo, and wore a heavy jacket all day, for it was chilly in the condo… One of my condo neighbors brought me a piece of cheesecake yesterday, as his wife was worried about me… I put it in the fridge, because I can’t eat sweets, so it’ll be there for Kathy returns on Sunday. But that sure was nice of Gloria to be thinking of me… I guess when people here don’t see me sitting out on the deck reading during the day, they begin to think that maybe something has gone wrong, as they all are aware of me having cancer… The Eagles greet me this morning with their classic rock song: Hotel California… “There she stood in the doorway, I heard the mission bell, and I was thinking to myself this could be heaven or this could hell.”

What on earth is gong on these days with currency traders? Are the waiting for a particular piece of data, like maybe the Jobs Jamboree tomorrow? Or, is it something else? I think that my thought earlier this week that the currency traders were between a rock and another rock, couldn’t possibly be still the case 3 days later, could it?  Crazy questions to ask so early in the morning, eh? But Inquiring Minds Need To Know! In the old days when I was trading for Mark Twain Bank, then Mercantile Bank, then EverBank, I would simply pick up the phone and call a trader friend and the scoop on what was on traders’ collective minds. But when I left EverBank,  I left behind all those phone numbers, and email addresses of the traders I knew… Not that now that I’m not associated with a firm that does currency business with the they would talk to me… But you never know!

So, with that intro… The currencies drifted again yesterday… no bid, no offer… and no direction… And I doubt the Bank of England (BOE) Monetary Policy Comm. Meeting this morning will have any say in the directionless currencies. And in fact, while I’m writing the BOE announced that they weren’t changing a thing…   And in the Eurozone will print their Retail Sales report for December… I don’t know, but I’m thinking that the Eurozone will not print a negative Retail Sales for December like we did here in the U.S.   But again, I doubt this will have anything to do with what the dollar and the currencies do today…

Gold & Sliver didn’t fare any better than the currencies yesterday, as Gold closed down $3.60 at $1.834.60, and Silver closed down 17-cents to $27.15…   Last night before I went to bed, I checked the metals and Gold was down $11 and Silver down 30-cents bringing Silver back below $27…  It seems to me that the crowd buying of Silver has petered out… And we’re back to normal demand for the metals, which lately hasn’t been there… I would think that with these much cheaper prices in Gold & Silver that buyers would be lining up…  Oh, and the word I heard from the anit-short sellers, is that they aren’t finished yet with Silver… So, maybe they can move the price a little higher again, but if the price Manipulators get angered, watch out!

In the overnight markets, Gold continued to slide further down and is now down $20, and Silver is down 50-cents… And the euro, which in the past few days has seen more traders turn their nose up at the single unit, has dropped below 1.20..  The rest of the currencies haven’t moved much, but their leader is takin on water this morning… 

Strange days indeed…  Stocks keep rising, Bitcoin, after a brief selloff, keeps rising, and both are in my mind scams, that one day will come to light… But for now, it’s jump on the bandwagon or be left behind… The problem with that thought is much like the common folks that got into the dot.com rally 21 years ago, only to buy at very inflated prices, and then see the rug pulled out from under them, the dot.coms crashed and the late arrivals to the dot.com rally were left holding the empty bag…  And I see history repeating itself here folks.. .You know history may not repeat itself, but it’s always near the scene of the crime…

And with aircraft carrier units sailing in the South Pacific heading toward China, Gold can’t find a bid… Is there some secret plans I don’t know about, to stay away from Gold?  I would guess the folks in China, India, and all over Asia haven’t gotten the memo then…  For they certainly are keeping the demand for physical Gold going strong…  Russia has been out of the Gold buying business for almost a year now, as they stopped buying when the Covid-19 virus became a global problem last spring.  But Russia has done a ton of physical Gold buying in the past few years, and the last count of their Gold bars had their value higher than any currency that Russia holds in reserve… Which is pretty much void of dollars, but they still hold a ton of euros, yen, sterling… The famous trio of currencies that I used to use in my  presentations as examples of diversification… No wait, not sterling, but Swiss francs!  Yeah, that’s the ticket!

As far back as 2005, Bill Bonner & Addison Wiggin authored a book titled: Empire of Debt…  They did an update in 2009, with a second edition. But the original idea has stood the test of time, and these days more and more people are talking about the declining Empire (the U.S.) because of debt, and sending its military all over the world, and if they were updating the book today they would be able to include currency printing & fake money…

In his daily writings, Bill Bonner, still goes back to his thought that the U.S. is an Empire in decline, having reached its APEX in 2000…    And since I read the book 15 years ago, I have been on board with his thoughts that the U.S. is an empire in decline…   These things don’t happen overnight folks, and even today 15 years after printing the 1^st edition of his book, the U.S. is still showing signs of decline… If you haven’t read this book I’m talking about, you should go to wherever you order books and get it ordered to read it and then when I talk about things like this you’ll be on board with me!

Don’t cry for the U.S. declining Empire, this has been going on for years now…  Some people think that the Empire began after WWII…  But check this out that I pulled from the www.informationclearinghouse.com site: “Americans were not always so ignorant of the imperial nature of their country’s ambitions. George Washington described New York as “the seat of an empire,” and his military campaign against British forces there as the “pathway to empire.” New Yorkers eagerly embraced their state’s identity as the Empire State, which is still enshrined in the Empire State Building and on New York State license plates.”

Ok. Onto other things on my mind…  In a very strange twist of fate or events… Iran which had a law in place to not accept any vaccines from the West, decided to skip over that law and order the Astra-Zeneca vaccine… When events are dire…  

American Airline has announced that there will be 13,000 layoffs come this summer when the airline travel slows…. Who wants to make a bet with me that these 13,000 layoffs don’t show up in the BLS’s Jobs Jamboree when the time comes?  I say they won’t, what say you?

The U.S. Data Cupboard saw the ADP Employment Report for January rebound from December’s loss of 78,000 jobs, and January’s number was 174,000 jobs created… That was a good rebound, no? Why yes it was, still not the size of job creation we saw before the virus hit last spring, but certainly better than the 78,000 jobs lost in December! 

Today’s Cupboard has the usual Thursday fare of Weekly Initial Jobless Claims, and in addition it will serve up the 4^th QTR Productivity report, which to me is stupid… And we can’t forget that Factory Orders will also print today, this being their December report…  So a decline in this number is all lined up by the previous prints of Durable Goods, the ISM Index, Retail Sales and Personal Spending… I guess we’ll see what the accountants have in mind for this report today…

To recap… The currencies didn’t move again on Wednesday, but Gold dropped $3 and Silver dropped by 17-cents, and both are down in the early trading this morning.  Chuck wishes he had kept the phone numbers and email addresses of the traders he used to talk to…  Chuck talks about the Empire of Debt, and the declining U.S. Empire… And wonders what event the currency traders are waiting for before they begin to move the currencies in one direction or the other?

For What It’s Worth…  Well, I have an interesting article for you today… This is about the supply lines being disrupted and things not getting to places they need to go, like food! And this article can be found here: The Global Food Trade Has Been Upended by a Container Crisis – Bloomberg

Or, here’s your snippet: “Food is piling up in all the wrong places, thanks to carriers hauling empty shipping containers.

Global competition for the ribbed steel containers means that Thailand can’t ship its rice, Canada is stuck with peas and India can’t offload its mountain of sugar. Shipping empty boxes back to China has become so profitable that even some American soybean shippers are having to fight for containers to supply hungry Asian buyers.

“People aren’t getting their goods where they need them,” said Steve Kranig, director of logistics at IM-EX Global Inc., a freight forwarder that handles cargoes including rice, bananas and dumplings from Asia to the U.S. “One of my customers ships 8 to 10 containers of rice every week from Thailand to Los Angeles. But he can only ship 2 to 3 containers a week right now.”

The core issue is that China, which has recovered faster from Covid-19, has revved up its export economy and is paying huge premiums for containers, making it far more profitable to send them back empty than to refill them.

There are signs that the soaring freight rates are boosting the cost of some foods. White sugar prices surged to a three-year high last month, and delays in food-grade soybean shipments from the U.S. could mean higher tofu and soy milk costs for consumers in Asia, said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance.”

Chuck Again…  Yes, one would think that to be in the shipping business you would want to send a container filled with goods, and have your trading partner send it back filed too… But I figured out a long time ago to not question the motives of the Chinese… Shoot, they have 100 year plans! We worry about what will happen in 3 months!

Market  Prices 2/4/2021: American Style: A$ .7606,  kiwi .7172, C$ .7798, euro 1.1998, sterling 1.3581, Swiss $1.1081, European Style: rand 15.0674, krone 8.6303, SEK 8.4550,  forint 296.95,  zloty 3.7508,   koruna 21.6262, RUB 75.97, yen 105.30, sing 1.3370, HKD 7.7526, INR 73.98, China 6.4584, peso 20.33, BRL 5.3608,  Dollar Index 91.44,  Oil $56.08,   10-year 1.13%, Silver $26.65, Platinum $1,085.00, Palladium $2,319.00, Copper $3.54, and Gold… $1,814.60

That’s it for today… It wasn’t a win-win night, as the St. Louis U. Billikens lost their basketball game, as they still showed rust from not playing for 3 weeks until this past weekend… Our Blues will be back on the ice tonight with their 2^nd of 2 games VS the Ducks…  I hope they don’t make tonight’s game as frenzied at the end as they did Tuesday night’s game…   This Sunday is Super Bowl Sunday, with the K.C. Chiefs playing the Tampa Bay Bucs… The Chiefs are going for back-to-back Super Bowl wins, which is actually kind of rare… So, they have that going against them, and they’ll face the QB who’s won the most Super Bowls, Tom Brady…  I’m not a Brady fan, never have been, and so my alliance with the Chiefs is even stronger because of that… Cat Stevens takes us to the finish line today with his song: If You Want To Sing Out, Sing Out….  “if you want to sing out, sing out, and if you want to be free, be free, ‘cause there’s a million things to be… “   I hope you have a Tub Thumpin’ Thursday and a Fantastico Friday tomorrow, and please Be Good To Yourself!

Chuck Butler

February 3, 2021

* Currencies can’t find a bid or offer… 

* All hail, the almighty Mario Draghi, is back! 

Good day… And a Wonderful Wednesday to you! Another cold front has come this far south again, and yesterday, was downright chilly… 61 degrees… And today it’s not supposed to get any warmer, but then that will be it, the cold front will be gone, and warmer, regular weather will return… I’m always amazed when the temp drops this far south… Every Winter from 2001 to 2015, I spent a week in Orlando for the Money Show. Back then Alex was a young boy, and so we would either come early for the show or stay after the show, and go to the Amusement Parks with him… By Age 9 Alex could have had a job as a tour guide at Disney World! A lot of good memories, for sure…  The Great Al Stewart greets me this morning with his song: Time Passages… 

Well, yesterday I was put in my place with one sentence by the well respected analyst, Dennis Gartman, who said, “I hate to say this but you are terribly wrong regarding Gamestop/Silver/Wall Street and the public.”…  Whoa there partner! Just what was I wrong about?  Dennis said, “i tried to explain that the firms in question had capital requirements to meet as the single most important imperative.”  Well, didn’t I do just that, in the FWIW section yesterday? Oh well, I respect what Dennis has to say, so I’ll be careful going forward!

Dennis did give me this little nugget of info and opinion, “The yield curve continues to widen and that shall of course serve the banks well.  The long bond presently yields 1.87% and that is headed toward 3% in the coming several months. The devastation to the bond market will be enormous for the “value of an 01” at these levels is massive.” – Dennis Gartman

OK… For now the dust has settled on all the commotion that went on last week with short squeezes… I read a report/ article yesterday that talked about how the Redditt folks are split on how to go about stopping the short squeeze…  that’s no plan in my opinion… But… like I said yesterday, these folks have done a good job in bringing the dastardly things these hedge funds do, to the public’s eye…  And Ed Steer tells me this morning, that my thought on the masses buying the silver ETF would require the trust co. to buy mass quantities of physical Silver, is in play as 56.8 Million ounces of Silver was added to the ETF this week…  I really don’t want to talk about them or Robinhood or whatever any longer… So, let’s move along, these are not the droids we’re looking for…

Well, there was little to no movement in the currencies yesterday, as the dollar traders remain between a rock and another rock…  But the selling in Gold was one of those, “I’ll see your $17 raise in Gold and raise it to a $24 sell off”…  I can hear the price manipulators chuckling and saying neener, neener, neener! And Silver, after yesterday’s $2 selloff is now cheaper than it was when  the Redditt crowd said they needed to go after the shorts in Silver…   YIKES! Say it ain’t so Joe! 

There was very little going on overseas yesterday and throughout the night… In fact the news from overseas has basically dried up, and blown away… The European Central Bank (ECB) can’t match the Cartel, I mean the Fed, and The Bank of England (BOE) is still mulling over going negative with deposit rates… China and Russia continue to under mind the dollar at every opportunity that presents itself to them. But there’s nothing new here… We’ve gone in-out-and all about and through China and Russia’s desire to dedollarize…  They certainly don’t show up at the Treasury Auction window with empty bags for their purchases of Treasuries any longer… And eventually this is going to come to a head  at the Treasury…  But for now, things move along…

One thing from overseas that caught my attention was the news that former ECB President Mario Draghi was named the new Prime Minister of Italy.. The markets there are overjoyed, as they believe their savior has arrived…  Reminds me of years ago, when Italian legislator, Silvio Berlusconi kept coming back to stage, and each time the people of Italy would rejoice… but things never changed, it was the same-o, same-o all over again… I’m just saying..  This song keeps coming into my brain… My boyfriend is back and you’re gonna be sorry…  

After seeing a strong move downward for the 10-year Treasury’s yield, (down to 1.01% last week,) the yield of the bond has moved higher once again to 1.11%… I know it doesn’t seem like much, 10 basis points, but… when dealing with bond,  small moves equal recognizable moves in price… And remember bonds trade like this… As the yield goes higher, the price goes down, and as the yield drops the price of the bond goes higher…  I was taught at an early time in my career in the Financial arena which began in 1973, that I should always pay attention to what bond yields are doing…  Well, in the past year, there’s not been much to watch, and yields dropped to record lows, and have remained low since then, but as Dennis Gartman points out above, the yield curve on the long end is seeing yields rise, thus widening the spread in the yield curve…

Man can you believe that in 2 years, I’ll be celebrating 50 years in finance…  I know, I’m retired now, but… I’m still writing about it, so that counts in my book! HA!

I used to tell the audiences when I spoke about my past experience and then say, “I know you are thinking, he doesn’t look THAT old!” HA! 

OK… the price of Oil is rising again reaching the $55 handle for the first time in almost a year…  I do believe that our friends (NOT!) at OPEC announced another production cut  last week, so this is the pop in price they were hoping for… of course about a year ago, when they cut production they announced that they thought the price would rise to $60… But then the world as we knew it ceased to exist… And in the summer of last year, we actually saw a day when the price of Oil went negative!!! But that was a refinery delivery problem that didn’t last… But you get the gist, the price of Oil has had nowhere to rise, due to the lack of demand, which should be picking up again, but still not anywhere near where it was before the third week of March last year.

The U.S. Data Cupboard today has the ADP Employment report for January, a precursor to the Jobs Jamboree which will be held on Friday this week. Let’s circle back to last month when the ADP report printed and showed a negative 123,000 jobs for December…  Well, this month the so-called experts think that ADP will show 48,000 jobs created in January… Sill not something to write home about here… 

And other than the ADP report, there’s nothing else in the cupboard today… We will have a mass invasion of the Cartel, I mean Fed heads our speaking today… Bullard, Kashkari, Evans, Meister, and Harker will take to the podiums and give their opinions on whatever they decide will be the topic of the day…  

I have to say that while in the days gone past that we never even knew who the Cartel, I mean the Fed Heads were, and now they’re out speaking all the time, I really believe that they are losing credibility by the day…  I guess we’ll see today, if they say something that should move the markets and we see no reaction from the markets… 

To recap… The currencies can’t get out from between two rocks, and yesterday marked 5 consecutive trading days where there was little to no movement in the currencies. Gold & Silver, on the other hand, did move, but in the wrong direction… Reversing the previous day’s gains, Gold lost $24, and Silver lost $2 the day…  56.8 Million ounces of physical Silver were deposited at the Trust Co. for the Silver ETF…  But even this news couldn’t cheer up Silver yesterday…  The price of Oil is rising, and so are the yields in Treasuries, and all hail! Draghi is back in Italy! 

For What It’s Worth…  It’s been “Silver Week” here at the World Headquarters for the Pfennig…  HA!  And so today’s FWIW is about the U.S. Mint’s rationing of Silver coins, because the demand is too strong…  And you can find that article here: U.S. Mint Still Rationing Silver Coins Amid ‘Exceptional’ Demand (yahoo.com)

Or, here’s your snippet: “The Reddit-fueled run-up in silver prices might be stalling, but the U.S. Mint said it is still rationing its sales of silver coins because of “continued exceptional market demand,” as well as limited supplies and manufacturing capacity.

The Mint is also allocating gold and platinum coin sales to authorized purchasers, it said in a statement Tuesday. The policy will be in place “for the foreseeable future.”

The mint’s silver coin sales jumped 24% to 4.775 million ounces last month, marking the highest for a January since 2017. The Mint’s announcement comes after retail sites were overwhelmed with demand for bars and coins. Investors on Reddit ignited a buying frenzy that roiled precious-metals markets and squeezed physical supplies. Some dealers said over the weekend that they were unable to process orders until Asian markets opened because of record demand.

Throughout the past year, and in part due to the effects of the coronavirus pandemic, the Mint was unable to meet demand due to precious metal blank availability and plant capacity issues.

The Mint also said it will have a limited production window to produce current design American Eagle gold and silver coins, as it’s scheduled to start production of redesigned coins in the summer of 2021, and coins for that program must be produced in advance of the launch date.”

Chuck again…  pity isn’t though, that Silver could be experiencing all this demand and can’t find a bid?  I find this example of price manipulation to be what we used to say on the basketball playground… “In your face, disgrace”… 

Market prices 2/3/2021: American Style:  A$ .7617,  kiwi .7195, C$ .7816, euro 1.2016, sterling 1.3635, Swiss $1.1118, European Style: rand 14.9884, krone 8.6319, SEK 8.4328, forint 296.03,  zloty 3.7362,   koruna 21.5785, RUB 75.89, yen 105.09, sing 1.3335, HKD 7.7511, INR 73.02, China 6.4571, peso 20.14, BRL 5.4008,  Dollar Index 91.21,  Oil $55.17,  10-year 1.11%, Silver $26.80, Platinum $1,097.00, Palladium $2,312.00, Copper $3.52, and Gold… $1,835.80

That’s it for today…  a nice win last night for our Blues, as they held on to their lead at the end with some frenzy play in their end… Well, it’s all systems Go, for MLB, and spring training will begin as scheduled and no delay…  Now, baseball needs to get us our tickets!  I was really surprised that the well known Dennis Gartman reads my humble little letter… And that got me thinking about well known analysts that could be reading the Pfennig…  The sky on the horizon is orange this morning, as the sun is getting ready to rise…  Oh, and Phil the Groundhog did see his shadow yesterday, which means 6 more weeks of winter this year! That is if you believe in that stuff…  I used to have a woman that worked for me, Kate, that was a big believer of Groundhog day. She would have parties, and really was into this Groundhog Day thing…  That was so long ago, I’m surprised I remember it! But isn’t that normal to be able to remember what happened 30 years ago, but not what you came into a the room for? Story of my adult life right there in a nutshell!   Ok, Neil Young takes us to the finish line today with his song: Needle and the Damage Done.. I used to play this song on my guitar… I wonder if I recall how it’s done? Oh well, a problem for another day… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself! 

Chuck Butler

 

 

 

February 2, 2021

* Gold & Silver rally on Monday, get sold on Tuesday

* Dollar Traders are between a rock and another rock! 

Good Day… And a Tom Terrific Tuesday to you! And It’s Groundhog Day!  Well, we saw day one of the Reddit WSB folks go after the Silver shorts. But then the short sellers came back and pushed the price of Silver back below $30, for the day… This will be day two, I wonder what it has in store for us? No Mizzou, or St. Louis U., or Blues on TV last night, so I pulled out my current Harry Bosch Book and picked up where I left off… Then I decided to check the markets and see what there was that I could talk about today…  And just about everybody and their brother was talking about The attack on the Silver Shorts… So, I’ll talk some more about that this morning, and the usual fare… No long essays like yesterday, I can proise you that! The Ozark Mountain Daredevils greet me this morning with their song: Jackie Blue… 

Alrighty then… So, the Redditt WSB folks had some fun yesterday, mostly in the Asian markets Sunday night/ Monday morning.  Yesterday, I told you that I thought that these folks could push the price of Silver higher, but without a delivery process of the metal, bringing the COMEX to its knees, I didn’t think they would be able to rid the markets of the short sellers of metals…  Well, I still stand by that thought, although I did think of a way it could work…

If they bought the SLV ETF, in mass quantities it would cause the trust company for the ETF to have to buy large quantities of physical Silver for their vaults to match the ounces held in the SLV ETF. This could act as the delivery method… and as long as the price of Silver continued to go higher, then the shorts would be squeezed, but I still don’t think it would drive them away to the sewers with the other rats, where they belong!   Or, if the youngsters doing the buying were to actually take a wealth position in physical Silver… And not treat it like a commodity, but a store of wealth, that would work… So, you’re telling me there’s a chance? Yes, that’s what I’m telling you… It would be a longshot, but as I told my good friend Rick yesterday, “This is a fight between We The People and the casino bullion banks”

If anything, the Redditt WSB folks have brought the naked short sellers to the public’s eye, and now more and more people are aware of the dirty deeds done dirt cheap, by the price manipulators!

OK… now the markets, which besides Gold & Silver were dead as door nails…  I had mistakenly said that the euro was rising yesterday morning, when it was really running in place, and kept running in place all day. The dollar traders are really between a rock and rock… They know that right here, right now, the dollar should be getting sold… but then they keep hearing economists say that the 2^nd half of this year will be rip roarin’ economic growth, and that would mean they should be long dollars…  But for 6 months before what these knuckleheads are thinking will be rip a rip roarin’ economy, and then find out it’s not?   Seems to me to be a real layup if I were a dollar trader… I would be selling my stock of dollars and buying something… But certainly not be long dollars in anticipation of what “could be, and probably won’t be”… 

Gold couldn’t hold its early morning gains, but still held on to a $13 gain to close at $1,862.20, and Silver did the same holding on to a $1.57 gain to close at $29.55…  so I read yesterday, that Silver dealers are already seeing supply limitations, and rising premiums for coins and bars…  You see, what the WSB folks didn’t think about is how many people are involved in this keeping a lid on the price of Silver & Gold….   The Bullion banks can simply say there’s demand for the metal and begin jacking up the premiums and minting prices to make, in this case, Silver more expensive…  Dirty deeds, done dirt cheap!

And when they show Silver coins at a metals dealer’s shop on the 10:00 local news, you know that the message is getting through… But when the Uber driver asks if you own any Silver, well, that’s a different direction….

In the overnight markets, it’s been a different story for Gold & Silver, as they have been sold so heavily that all their gains from yesterday have been wiped out.. Gold is down $17, and Silver is down $1.73 today… You don’t think… Nah, that couldn’t have happened so quickly… But maybe, just maybe, ’cause you never know…  That the short sellers went in big time to show these youngsters a thing or two about trading…  If that’s the case, then it was nice knowing you defenders of the assets sold short… 

Every thing is down today… Bonds are down, currencies are down, and metals are down… So I guess I can’t say “everything is down” because the price of Oil has jumped to a $54 handle in the last 24 hours, from the previous level of $52… And for those of you who give two hoots, the stock futures are up this morning, indicating a good day for stocks… 

I talked yesterday about how Personal Spending has gone south of the border for the last 3 months, totaling a 10% decline…  And I don’t think I put enough emphasis on that number…  And like I said sarcastically and they expect me to believe the same period GDP was up 4%?   Think about that for a minute folks… In the U.S. Consumption or Consumer Spending is the bulk of the formula for GDP, and without spending/ consumption, there’s no freakin’ way that GDP was that strong!  I know, I know I’m simply using logic again… I don’t sit in a smoke filled room with a green plastic shade on my forehead, figuring out ways to deceive the people of the U.S.  And in my mind that’s exactly the scenario that goes on!

The U.S. Data Cupboard got right into the job of printing economic data yesterday, when the ISM (manufacturing index) Index fell from 60 to 58… And that was for January… There were more business shutdowns in  December so that all makes sense, but what I question is why it didn’t fall further?  Oh well…  We were supposed to see motor vehicle sales for January, but I guess the print was not ready for prime time…

Today’s Data Cupboard goes back to empty, but we will have 3 Cartel, I mean Fed, speakers: Kaplan, Williams and Meister on the speaking circuit today… I would look for them all to be whining and crying about how the economy needs those stimmy checks…

To recap… The currencies did nothing yesterday, and Chuck believes currency traders are between a rock and a rock… Gold & Silver couldn’t hold their early gains during the day yesterday, but still had good gains to close out the day… Silver hit a multi-year high, and Chuck decides to explain how the Redditt WSB folks can achieve their goals… the anti-dollar assets are getting sold overnight though, indicating that this could be an ugly day…  And Chuck revisits the Consumer Spending reports from yesterday… And today’s letter is much, much shorter!

For What It’s Worth… Well, I have a follow up article to the one I had yesterday, regarding the Robinhood brokerage problems…  I know all the conspiracy folks think that Robinhood had to shut down trading to help the Hedge funds… But it goes deeper than that folks… With all the newfound activity Robinhood was required to put up more collateral at the Clearing Corp. (DTC) And that story can be found here: Why Robinhood Had to Risk Infuriating Its Customers – The New York Times (nytimes.com)

Or, here’s your snippet:” Robinhood faces a loss of confidence from customers. After becoming the venue of choice for small investors, the app risks alienating a core customer base — and feelings of betrayal over the trading limits may be harder to address than annoyance over technical outages. (Small groups of protesters gathered in New York and outside Robinhood’s Bay Area headquarters yesterday.) “Brokers are now ‘protecting’ customers as a façade so that they can appease their institutional backers,” one individual trader told Bloomberg. “The entire community is outraged.”

The surge in trading forced Robinhood to raise cash. As waves of investors poured into the markets, Wall Street’s central clearing hub, the Depository Trust and Clearing Corporation, demanded billions more in collateral from brokerages to shield it from the volatility. Robinhood, which had already drawn millions from its credit lines to meet margin requirements, turned to existing investors for additional capital so it wouldn’t have to impose further limits on customer trades.

A more detailed explanation: Brokerages post money with the D.T.C.C. to cover customers’ transactions while they wait for the trades to settle. With such a big surge in trading, the clearing hub wanted more assurance: “It’s the D.T.C.C. saying ‘This stuff is just too risky,’ ” said the Bloomberg Intelligence analyst Larry Tabb.

Other online brokerages also cited the D.T.C.C. as a factor in decisions to impose trading restrictions.”

Chuck Again…  I know these problems are usually not my cup-o-tea, but this is BIG NEWS folks… And I’ve had my fun throwing shade on the Robinhood crowd, but in this case I do believe they are in the right, demanding that their trading platform accept the trades they are entering! 

Market Prices  2/2/2021: American Style: A$ .7608,  kiwi .7160, C$ .7805, euro 1.2030, sterling 1.3673, Swiss $1.1136, European Style: rand 14.9701, krone 8.6048, SEK 8.4403,  forint 295.51,  zloty 3.7424,  koruna 21.6408, RUB 75.85, yen 105.05, sing 1.3326, HKD 7.7515, INR 73.08, China 6.4611, peso 20.21, BRL 5.4547,  Dollar Index 91.14,  Oil $54.80,  10-year 1.11%, Silver $27.82, Platinum $1,101.00, Palladium $2,340.00, Copper $3.50, and Gold.. $1,844.70

That’s it for today… Well Phil the Groundhog will be poking his head out to not see his shadow very soon this morning…  Not seeing his shadow means spring will be early… And I’m betting a shiny quarter that those folks up in the northeast, would be glad to hear that!   The Cardinals made a blockbuster trade this weekend that was finalized yesterday. The Cardinals get the best 3^rd Baseman in baseball, and the big bat they’ve longed for, by trading for Nolan Arenado…   Yes, we had to give up some young talent, but we needed a 3^rd baseman that could hit, and we got him! Arenado on one corner of the infield and Paul Goldschmidt on the other corner!  And I received an email yesterday morning from the folks at Roger Dean Stadium telling me that the tickets sale was going to be delayed… UGH!  I am amped up about this trade, and now really can’t wait for pitchers and catchers to report!  Jimmy Cliff takes us to the finish line today with his song: Hello Sunshine… “Will old darkness be my friend. Hello Sunshine To this you can put an end.”    I hope you have a Tom Terrific and shadowy Groundhog Day, and Please Be Good To Yourself!

Chuck Butler

February 1, 2021

* Currencies have drifted since last Thursday.. 

* Will WSB go after the silver short sellers? 

Good day… And a Marvelous Monday to you!  And Welcome to February! Well, I spent the weekend, basically in my recliner, as I was sick with stomach problems since Friday. Yesterday, I finally got brave and went out to the deck for a couple of hours to read. Thank goodness for that, as I hadn’t been in the sun for two days! It was a good weekend sports wise, as my beloved Missouri Tigers won their basketball game on Saturday, and the Blues won back-to-back, belly-to-belly games in Anaheim… Since I slept most of yesterday, it was no problem staying up to watch the hockey game last night! The moon was full this past weekend, and I love to watch it rise, in what appears to be, out of the ocean, as a big orange ball, and then rise to the sky and reflect a white beam of light on the ocean.. .I guess for some people this would be a romantic scene… But not for me, for I was here alone! Poor, poor pitiful me! HA!  The great Van Morrison greets me this morning with his song: And It Stoned Me…

Ok… what a week it was, last week for the Wall Street Bets (WSB) folks…  They took on Wall Street, and won! That doesn’t happen much, but it did last week, and guess who the WSB folks are thinking of going after now? The Silver shorts…   I mean just the thought that this could happen helped Silver really push higher on Thursday and Friday. I have two thoughts on this whole shorting stuff…

First of all, the almighty hedge funds had shorted more GameStop shares than there were existing… THAT IS ILLEGAL! When you short a stock, you borrow the stock from a brokerage that has the stock long in margin accounts. When you buy on margin, you sign a margin agreement that gives the firm the right to use your stock, not all of it, for borrowing purposes…  In the old days when I ran a margin dept. we would get the call from the cashier that we needed to get more stock pledged to the bank. So, I digress here….  Since you need to be able to borrow the stock to sell it short, you obviously can’t sell more than there is available… But the hedge funds did just that! Where’s the SEC?   I’m furious about this, rules are rules, and if you can’t enforce them, why have them? 

The second thought on this is that I’m somewhat skeptical that the WSB folks will go at the Silver shorts like they did GameStop…  But let’s review the status of this Silver short…  There are more ounces of Silver sold short on contracts than is available above ground…  Now, if you aren’t supposed to be able to sell more stock than is available, shouldn’t it also be the same for a metal?  The answer in my mind is yes… But again I digress…  it would currently take more than 180 days of Silver production to equal the short ounces on contracts…  Now, haven’t I always contended that the way to drive the short sellers away is to have truckloads of physical Silver bought and need to be delivered?   So, how would the WSB folks go after the short sellers?  I would imagine since they all like to buy stocks on their phones, that they would buy paper contracts, or maybe Silver ETFs… And that might drive the price of Silver higher, but unless there’s a required delivery at the end, then I don’t think they’ll get much traction on getting the short sellers to go away..  But, it’s worth the old college try?, eh?

Ok.. a lot to talk about at the get-go this morning, and I’m not finished! But… first we’ll talk about what happened in the currencies and metals on Thursday and Friday last week… For the currencies it was two days of nothing… absolutely nothing, say it again!  The currencies for the most part drifted along and didn’t gain much, didn’t lose much, to end the week…  They begin the week wearing the same clothes as last Friday…  Gold & Silver rallied both days late last week, and begins the week on a flyer.. Gold closed on Friday at $1,849.10, and Silver at $27.08 ….

This will be a very interesting week, IF the WSB folks are going to go after the Silver short sellers, because with Silver trading above $27, at the close on Friday, this would normally be about the time for the short sellers to show up at the COMEX with their arms full of short Silver paper trades…  I hope there is a meeting of the two forces to see who wins…

If anything, the WSB folks have given the JPMorgans, etal, the thought that there could be some resistance to their selling Silver & Gold short…

In the overnight markets things have begun to get shook up… The euro is rising, taking most of the currencies along for the ride. But the focus this morning is on Silver… Silver is up $2 in the early trading and is trading at $30.33 as I write… this has been a long time coming, and it’s going to be a long time gone (CSN)…  Gold is also rising this morning, up $18 in the early trading…  So, the pressure on the short sellers of the metals is already showing up.. 

Last week I went all upset on the idea that the markets look forward… Saying that it appeared to be a think of the past… And then I began to read report after report talking about how the U.S. economy is gong to rebound big time in the 2^nd half of this year…  And here’s where I’m going to go off track again and let ‘er rip! But before I start, I want to make it perfectly clear that I don’t want to see these things happen in our economy, but what I want to see and what I do see, are two different things…

I’ve done a lot of thinking lately about all the calls you hear from economists and people that should know better, or maybe not, that once the vaccines are administered to everyone, that the economy will return to normal… Really?   Here’s the thing to think about… All the things that people think will get back to normal, just isn’t going to happen overnight…  Ok, so you missed getting haircuts once a month, are you going to go out and get 2 per month to start to make up the deficit?  You used to get a manicure/ pedicure once a month, are you now going to get one per week?  The answer is no.. . The thing that really gets me is that we were a services economy, right? And we shut down non-essential services, right? How does that work out?  So, we open up the non-essential services, and what do we find out? We find out that during the plandemic, most people learned how to fix things, repair things, create things, make things, etc. and will no longer need a lot of those returning non-essential services…   I began to think about all this stuff when I heard an economist say that there is pent up demand and that in the 2^nd half of this year we will see a very strong economic recovery, and therefore that’s why the markets are so strong, and the dollar is recovering, because they are looking forward to the soaring economy in the 2^nd half of this year…

And the other thing to think about with regards to all this, is that the U.S. Consumer has gone about repairing their balance sheet during the plandemic… The savings rate is up 10% in the past year… Credit card debt is down big time, so kudos to U.S. Consumers, and I really do believe that the mindset of people is to make sure they are prepared financially for another shutdown, should one every come again…  And so, who’s going to go out and spend this pent up demand when the all clear horn sounds? And the other thought that you need to think about is that during the plandemic people bought the big items they wanted / needed instead of spending money on eating out, and traveling.  Those big items aren’t going to be needed to be bought again are they? No… So, while the spending on eating out and traveling goes up, the spending on the big items goes down…  The great economist, David Rosenberg, calls this pent down demand… 

I reckon this is very similar to your grandparents, who lived through the depression, or your parents, either one… We’re they all scared that another one could happen, and that savings were the most important thing in wealth accumulation?  And not having debt!  I know from personal experience that both cars at our house are 10 years old…  But I’m not going to get something newer now… Those cars will have to go until they don’t!  And maybe by then, things will be clearer financially in this country…

But… I don’t think all this will become apparent until the we get to the 2nd half of this year, and all the goodness people are expecting just isn’t there, then the light bulb over the collective heads of traders will come on and they’ll say… “That Chuck guy was right!” HA! 

Well, I’ve certainly had a lot to say today, eh?  Oh, and I’m not finished!

The U.S. Data Cupboard late last week had some not so good data, that should have put some pressure on the dollar, but it didn’t… Go figure, right?   Let’s pick it up with the Leading Indicators that fell to .3% from .7%, last month… The Initial Weekly Jobless Claims fell back to 845,000 after two weeks of rising claims…  There’s still 18.3 Million people on continuing claims…  And the 845,000 while down is still larger than the highs in the great recession of 07-08…   The 4^th QTR GDP printed at 4% growth, which to me seems way too high, but even with this number it wasn’t enough to pull the annual rate of GDP for 202 out of the red… The 2020 GDP printed a negative 3.5%, the largest drop in 74 years… Yes, not since 1946, had we seen GDP drop by this much… 

Of course the plandemic had a major share of the cause for this drop… But it’s not like can say, “if the plandemic didn’t happen”…  Because it did happen, and is still happening! Now , we have to see just how we dig out from this deep hole… and remember what I told you last Thursday, that the 4^th QTR GDP would have 3 more revisions before set in stone… And I would bet a shiny quarter that there will be 3 downward revisions…

On Friday, we saw Person Income & Spending… Personal Income was up .6% in December… Interesting because Personal Spending was down .2%, which put the final 3 months of 2020’s Personal Spending down 10%…  And they expect me to believe that the same period of time GDP was up 4%?  Hey U.S. Gov’t! I WAS BORN… I Just wasn’t born yesterday!

To recap…  The end of the week last week saw no movement in the currencies, and we’ve begun the week with bot currencies & metals on the rise VS the dollar.  Gold & Silver saw some gains to end the week, with Silver outperforming Gold, as there were words being spoken about the WSB folks turning their attention to the short sellers in Silver..   And Silver really has gone on a flyer this morning! Chuck goes Professor Charlie Butler in today’s letter with explanations of short sales, pent up demand, and other things on his mind…  You won’t want to have missed that, so go back now, and read it! HA!

For What It’s Worth…  Longtime readers know I’m no stock jockey, and I rarely talk about stocks, with today’s rant about short sellers the exception… But this article came to me from a dear reader, that after spending all that time talking about the WSB folks above, I thought this would play nicely in the sandbox. And it’s about the Robinhood crowd running into a roadblock… BIG TIME  And it can be found here: Robinhood Caps Maximum Holdings In 36 Stocks To Just One Share | ZeroHedge

Or, here’s your snippet: “Something bad is about to go down at Robinhood.

One day after the company drew down on its bank lines and obtain a $1 billion rescue capital investment, the company found itself in lockdown mode, allowing just a handful of shares to be bought at a time, effectively shutting down in all but name (it couldn’t risk another day of furious public outcry and massive client departures if it blocked trading completely).

However, just before the close, things got downright surreal when in a blog post the broker – which should probably change its name from Robinhood to Suit – made a shocking announcement: going forward, customers will be subject to maximum aggregate limits in 51 securities of which 14 are capped at position limits of just 5 shares, while allowing total holdings in 36 securities to be just one share!

In other words, as of this moment, no client is allowed to one more than 1 share in many others. Even boring, low vol names are limited to just one share.

Panicked clients who are wondering if this means that their current holdings which exceed 1 laughable share will be forcefully liquidated can breathe for now: the company said that “outside of our standard margin-related sellouts or options assignment procedures, your positions will not be sold for the sole reason that you are currently over the limit. However, you will not be able to open more positions of each of these securities unless you sell enough of your holdings such that you are below the respective limit.” (we expect that to change on Monday, if the company is still around.)

In other words, virtually nobody can buy any new securities.”

Chuck Again…  with some help from Golden Earring… Help I’m steppin’ into the twilight zone

The place is a madhouse, Feels like being cloned

My beacon’s been moved under moon and star Where am I to go, now that I’ve gone too far?

Soon you will come to know When the bullet hits the bone”     That’s how I feel after witnessing the hedge funds getting taken to the cleaners last week, and the Robinhood crowd getting basically shutdown…   The Twilight Zone for sure!

Market Prices  2/1/2021: American Style: A$ .7640,  kiwi .7180, C$ .7812, euro 1.2085, sterling 1.3720, Swiss $1.1177, European Style: rand 15.0038, krone 8.5848, SEK 8.3997,  forint 294.68,  zloty 3.7250,   koruna 21.4957, RUB 75.91, yen 104.80, sing 1.3312, HKD 7.7528, INR 73.15, China 6.4267, peso 20.30, BRL 5.4615,  Dollar Index 90.84, Oil $52.69,  10-year 1.07%, Silver $30.33, Platinum $1,127.00, Palladium $2,352.00, Copper $3.52, and Gold.. $1,867.10

That’s it for today… Well, we start the week and month with some major stories waiting for answers and that should make for an interesting week, eh?   Tomorrow morning will be Groundhog Day, which is also the title of one of my fave movies!  And no, it’s not just because Andie McDowell plays a lead! But it does play a big part of it! HA! Well, I’ve been all by myself, for 10 days, this being the 11^th day… I’m kind of glad Kathy wasn’t here for my 3 days of sickness. I don’t like for people to see me sick. I have my reasons that I won’t get into now… When I was out on the deck yesterday, a woman from the condo came out and we talked like we normally do. Her name is Annette, and she asked me where my cooler of beer was?  I then explained why it wasn’t there, and then told her, to not feel bad about asking! Another beautiful moon rise last night… in the words of Moon Man Mike Shannon, It’s a beautiful full moon here tonight, I hope it’s a full moon wherever you are” The Marshall Tucker Band takes us to the finish line today with their song: Searchin’ For A Rainbow… “and if the wind ever shows me where to go, you’d be waiting at the end and I know, I’d see the hill with that pot of gold.”  I hope that song remains in your head all day, now, for I love me some Marshall Tucker Band!  I hope a Marvelous Monday is in your day, and Please Be Good To Yourself!

Chuck Butler

January 28, 2021

* not a good day for the currencies & metals… 

* Why don’t traders give two hoots about the Cartel’s balance sheet? 

Good day… And a Tub Thumpin’ Thursday to you! Yesterday morning, after sending out the Pfennig, I was really draggin’ the line, and closed my eye, and the next thing I knew I had slept until 11 am… it was “one of those days”… Then I got up, and went outside where it was full sun, and 85 degrees, I stayed outside for about 2 hours, and then decided it was time to get out of the sun! I heard the news yesterday oh boy… That my spring training buddies are bagging me this year… Which means that Kathy will have to go to all the games with me, and I can tell you right here, right now, that she will not enjoy that one iota! One game here and there, OK… Day after day of games, no thank you, as far as she’s concerned… And now we’ll be sitting in the sun for the games with masks on… That will be uncomfortable for sure! There will only be 1,000 fans at the games in the ballpark, so it’ll be like being at a Marlins game! HA!  Al Wilson greets me this morning with his song: Show and Tell… “That’s a game I play when I wanna say, I love you”… 

OK… Well, it was not a good day for the currencies & metals.. No, it wasn’t one of those engineered takedowns for Gold, but the shiny metal did lose $6 on the day… The currencies gave back about 1/2-cent to the dollar across the board, and the Dollar Index closed at 90.67… Up from the early morning reading of 90.47. 

As I peruse the currency screen I’m taken aback by how much ground they’ve lost this week… Shoot Rudy, even the Chinese renminbi and Japanese yen have given back recent gains VS the dollar!  And like I said yesterday, ever since Gold rose by $32 last Wednesday, it has seen small drops every day…  

The day was dominated by the FOMC meeting and press conference that followed no rate change announcement. Cartel, I mean Fed Chairman, Jerome Powell was doing his best imitation of Dr. Fauci, and this ended up being the most important thing he said, “There’s nothing more important to the economy right now than people getting vaccinated.”  I wonder how the media will react to those comments when in 5 years, we find out that the vaccine shouldn’t have been given, especially to elderly people…  OK… I don’t know this to be a fact… So, stop right there with your nasty email to me! I’m just speculating… Remember a couple of months ago, when the vaccine came out, and I said then, what happens when a new strain of the virus appears?  I didn’t know anything more than anyone else at that time, I was just speculating, and well… we know the rest…

Ok, now I’m playing scientist… mad scientist at that! So.. Igor… where did I put that syringe?

So.. nothing new from the FOMC yesterday… Rates remain near zero, bonds are being bought.. The Cartel’s, I mean Fed’s balance sheet is now $7.2 Trillion, and I betting that free undercoat that their balance sheet will be $10 Trillion by the end of the year…   That’s $10 Trillion of interest rate expostre folks… This is something that has never been this size before, and it’s only getting larger every day. And nary a word from the Cartel chairman about tapering bond buying…  Like I said the other day, the temper tantrum the markets would throw would be something to behold, if there was tapering mentioned…

But with all that in mind, the dollar bugs ruled the day…  Go figure, right?  The dollar has begun 2021 much like it did most years when it was in the last weak dollar trend… Giving everyone the idea that the dollar will rebound the rest of the year, only to be disappointed as the months went along… But that was during the last weak dollar trend,  it will be interesting to see if the dollar can retain any strength in this calendar year, given all the stuff that’s building up against it doing so.

I read yesterday that the new $1.9 Trillion Stimulus package is making its way through Congress with no roadblocks… So, gotta get those stimmy checks out… because the sooner you get those out, you can begin to talk about the next ones that will be needed…

In the overnight markets… there’s been additional slippage in the currencies VS the dollar and Gold is down $5 in the early trading… Has everyone lost their collective minds?  Give me a break here!  One of the things that was drilled into my head when I first started in the financial business is that “markets/ traders are always looking forward”…  But I truly believe that that thought has gone our the window with the bathwater, for if it were still true, then the dollar would be getting taken to the woodshed..  For what’s coming down the pike is all bad for the dollar, so why aren’t traders “looking forward”?   

In the U.S. Data Cupboard yesterday, we had the long awaited December Durable & Capital Goods Orders, and they certainly didn’t give the economy a warm and fuzzy…  Durables only rose .2% VS the 1.2% in November, and Capital Goods only rose .6%, down from 1.0% in November. So, going the wrong way as far as a recovery is concerned, that’s for sure! 

Today’s Data Cupboard will be a busy little bee, with the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims… Then after the dust settles on that data, we’ll see the first print of 4^th QTR GDP… What ever it prints at, keep in mind that it will see 3 revisions to that number…   And December Leading Indicators finish out the day for Data Cupboard… I suspect that the Leading Indicators number will be down from Nov.  

For those of you new to class, Leading Indicators, and Capacity Utilization are about the only forward looking pieces of data that we see… The CAPEX (Capital expenditures)  is close to being forward looking… But circling back to what I talked about above, what’s the use of looking forward any longer? It’s all about what have you done for me lately!  Instant gratification… What ever phrase you want to you use to say looking forward is dead as a door nail! 

To recap… The dollar bugs ruled the day yesterday, and the FOMC meeting and press conference didn’t yield anything to move the markets…  Powell did his best imitation of Dr. Fauci…  And Chuck has a problem with it… But then Chuck always has a problem with what the Cartel chairman says!  Chuck talks about the Cartels’ Balance Sheet, and how it has exploded higher and keeps growing, with all that interest rate exposure…  Oh, well, people don’t care about the Fed’s Balance Sheet… do they?

For What it’s Worth…  Ok, this is all old news for most of you, as I went through this a couple of weeks ago for the about the 10^th time… But… just like your kids sometimes need another adult to talk sense into them, I have gotten Luke Gromen to talk to you about Gold Price Manipulation… I first came across Luke when he was on a podcast with Grant Williams, and since then I follow him on Twitter, and read his notes whenever he posts them… He’s a very well respective analyst, and he’s here to talk to you and you can find that talk here: Why gold price is not at $6k already and why it was ‘managed’ by the government – Luke Gromen | Kitco News

Or, here’s your snippet: “Gold is a political metal, and competes with U.S. treasuries, said Luke Gromen, president of Forest for the Trees, and because of this, government authorities have historically been trying to “manage the price.”

“It’s a political metal because it competes with the U.S. Treasury bond as a primary reserve asset and so to the extent that gold does well, historically that is a threat to the U.S. government being able to finance its deficits painlessly. So, there has been a need to manage the gold price and that’s not conspiracy theory,” Gromen said. “You can read any number of central bankers at the Bank of England, Greenspan at the Fed, the U.S. State Department wires and cables from the 1970s, they are stating that to be a fact that the gold price needs to be managed.”

Gold has the potential to reach $6,000 an ounce but is being held back, Gromen said.

“Gold collateralization of U.S. foreign obligations went from 20% in 1989 to 4%, 3% at the lows in 2003,” Gromen said.

Should it return to the same 20% level, gold should be trading at $6,000 an ounce, he noted.

I doubt that governments [particularly the U.S. government] are directly involved in the COMEX futures market, but it would come as no surprise to me if they weren’t involved behind the scenes in some way.  And as I said in my January 9th commentary regarding the latest Bank Participation Report, it would not be shocked to see the Exchange Stabilization Fund involved in bailing out some or all of the Big 8 shorts when the time comes.”

Chuck again…  And again I remind everyone that when there’s so much physical demand to buy Gold & Silver the short positions will be squashed, and gone where the gobblins go… Also, I truly appreciated him mentioning the wikileaks cables I’ve talked about for years, where U.S. leaders talk about the need to keep Gold from rising…  It’s all there folks, all the proof you would ever need to know that the Gov’t is behind all this… 

Market Prices  1/28/2021: American Style: A$ .7610,  kiwi .7125, C$ .7781, euro 1.2110, sterling 1.3652, Swiss $1.1233, European Style: rand 15.2370, krone 8.6730, SEK 8.3596,  forint 297.63,  zloty 3.7541,   koruna 21.5538, RUB 75.41, yen 104.35, sing 1.3320, HKD 7.7527, INR 73.09, China 6.4716, peso 20.36, BRL 5.3725,  Dollar Index 90.70,  Oil $52.77,  10-year 1.01%, Silver $25.35, Platinum $1,068.00, Palladium $2,382.00, Copper $3.52, and Gold… $1,840.70

That’s it for today…  I feel much better this morning. Yesterday, when I woke up, I just didn’t feel like doing anything, but I made myself go outside, and I was glad I did, for soon the sun put some life into me! So, back to the real life this morning… coffee is brewing, and soon it will render, that hot concoction that helps me get along… HA!  The Cold front came through overnight, and today we’ll only see a high of 70… poor me, right? HA!  There’ll be Floridians walking around with winter coats on… I’m not kidding! Not all, but some will be bundling up! OK… The next time we talk will be on Monday, Feb 1^st, and I’ll be getting ready to get on the horn and order my ball game tickets!  So, that means this is the end of one of my most dreadly months…  (sp check says “dreadly” isn’t a word, but I say it is!) And there will only be about two weeks before pitchers and catchers report…  The Gap Band takes us to the finish line today with their 80’s song: You Dropped A Bomb On Me… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and Please Be Good To Yourself!

Chuck Butler