Debt Goes On and On, Like The Energizer Bunny!

Good day… And a Tom Terrific Tuesday to you! That felt good just typing that phrase to begin our day here. I’m still as excited as a kid at Christmas that I get to keep writing the Pfennig, thanks to my good friends, Mary Anne and Pamela Aden. I also want to thank my long-time good friend, and former boss, Frank Trotter, for all his help in getting the Pfennig moved and all the technical expertise he added, for I’m not the sharpest tool in the shed when it comes to “tech stuff”…  The late, great, Dan Fogelberg greets me this morning with his song: The Last Nail… I used to play that song on my guitar, one of my fave songs to play too!

Well, we start the day today with not much movement in the currencies, metals, bonds, and commodities… But that doesn’t mean we won’t see some action in these assets as the day goes on, because…

it’s going to be a busy week with data from overseas, Central Bank meetings, and meeting minutes being printed. So, let’s get right down the business today… First off the Central Bank meetings… the Norges Bank is first up.. and while the markets all expect the Norges Bank (Norway’s Central Bank) to remain on hold… I’m getting the feeling that they are ready to wet their interest rate powder, with inflation running above 2%, and the economy getting weaned off of the fact that they were so dependent on Oil. But… I really don’t believe that the Norges Bank will wet their powder until the European Central Bank (ECB) begins to unwind their accommodative monetary stance. But to hear the Norges Bank talk about how things are looking better, would go a long way to correcting this recent bout of weakness in the krone.

Next up will be the Reserve Bank of New Zealand (RBNZ)… The RBNZ too is ready to wet their interest rate powder, but… with Australia struggling with their mining, because of weak prices of raw materials, I do believe the RBNZ is on hold until, things turn around in commodity prices. The RBNZ has been ready for a couple of months now, and unfortunately, it will take them a few months more, but like I said a couple of months ago… This is a rare opportunity for individual investors to get the opportunity to buy a currency, in this case kiwi, before the Central Bank raises rates, but knowing that an interest rate hike is coming… But just like a lot of things the rate hike in New Zealand is evident, but not imminent at this time.

And finally, the Reserve Bank of Australia (RBA) will print their last meeting’s Minutes… I don’t expect much here, other than the things I told you were said at the press conference after the last RBA meeting. That the RBA is optimistic, but still sees dangers out there in the world, that could bring the whole recovery down.

As far as data around the world is concerned there are only two that really mean anything (to me that is), and that is Canadian inflation, and the Eurozone’s flash PMI (manufacturing index)… In yesterday’s return to the saddle for me and the Pfennig, I talked about the Canadian dollar/ loonie, and said that the loonies recent strength had the markets scratching their collective heads, as to why this was, given the price of Oil had remained quite weak.. But after the Canadian inflation report prints this week, and shows that inflation has dropped, that might not be the thing that would keep the loonie running hot..

The Eurozone’s Flash PMI’s should show another improvement in manufacturing for the Eurozone… These are the flash reports, not the final ones, but I don’t really believe that there’s ever that much change between the flash and real reports that come later in the month. So, maybe the euro can get some love from the flash report when it prints on Thursday.

Here in the U.S. the Data Cupboard isn’t filled with real economic data this week, but we will see the color of the Current Account Deficit for the 1st QTR today, and it should print about $112 Billion… More debt, I just shake my head in disbelief that we, as a country, continue to allow this deficit spending to go on and on like the Energizer Bunny! But, it’s what the Joneses are doing! China, the U.K., Eurozone, and shoot even Canada have gone this route, and I still can’t believe that it won’t all end up in tears…

But, that’s a discussion for another day, or maybe the Butler Patio, I don’t want to take up all my space today with another beat down on debt… You, dear long-time reader, know all too well that I’ve been banging the drum on our rising debt for many years now, and well, I guess sometimes I’ve sounded like the boy who cried wolf, but one day, that wolf will come knocking on our door…

Well, Gold got smacked by almost $10 ($9.80) yesterday… We have geopolitical tensions rising in the Middle East again, this time between the U.S. and Russia, and then throw in Iran and the tensions get thick, but that hasn’t helped Gold to recover any at this point. But then the paper Gold traders who short the heck out of the metal, don’t really care about geopolitical tensions…  I think it best to switch gears here and let you listen in to Ed Steer’s thoughts on the Gold price from his letter this morning that can be found at:… Here’s Ed..

“I would suspect that the reason there wasn’t more volume in gold is because that particular moving average is still intact, but I doubt that ‘da boyz’ will stop at this juncture. I would also suspect that there’s not much more to go in silver, but there must be something, or the price would not have declined yesterday. It’s the very act of the Managed Money traders selling long positions — and going short as well, that causes prices to fall. So until these traders are drained dry, the engineered price decline in silver will continue, using the engineered price decline in gold as a hammer to continue pounding on the silver price. This is what Ted Butler has been going on about for decades now — and that few other so-called precious metal ‘analysts’ just won’t touch.” – Ed Steer

I know, I know, I told you some time ago that I wasn’t going to go down that price manipulation of Gold street anymore, but that was then, and this is now, a fresh restart for the Pfennig, and you can expect more of this going forward! Because it’s just to difficult to ignore any longer, folks..  Tomorrow, I’m going to print a communication from long ago that proves what I’ve been saying all along that the price of Gold is manipulated to keep the dollar alive and well..  So, there’s the teaser for you to come back tomorrow! (goes to show you that I won’t stop at anything to get you to come back and read again tomorrow! HA!)

The FWIW section today has the great James Grant taking on someone that basically pooh-poohed the idea of a Gold Standard…

Well, I have a project for you… sit down at your computers and fire off a letter to your congressman and ask them why on earth did they not only extend the economic sanctions on Russia but add to them last week!  I read a very interesting article yesterday about how in poker, if you don’t find out who the sucker in the game is, It’s you!  And how in poker it’s usually a good idea to side up with someone to get everyone else out of the game until it come down to just you two…

So, take that idea to the negotiations that the U.S. is attempting to have with China to get involved in the N. Korea problem…  So, the U.S. is not gaining any friends needed to get both of these things accomplished… They’ve ticked off the Russians with the added sanctions, and will most likely end up ticking off the Chinese with our demands that they get involved with N, Korea… That’s not gaining any advantage here folks… But then what the heck do we care, the gang’s all here!

So, long-time readers know how I like to personal experiences and parlay them into thoughts about the economy, right? Well, I was listening to a woman talk about her son’s experience in attempting to find a house to buy, because his rent has risen so high that if he could find the right house, he would be spending less on his house payment, insurance, etc. than he was paying on his rent…  Now that’s crazy folks!

In 2005, 2006, home ownership in this country rose to 69% from 64% previously, after the Financial Meltdown, home ownership fell back to below 64%, and people began to rent again… That’s when rents began to explode in price, and brings us to where we are now, with rents hitting a high, and now appearing to suffer from over exposure to high prices…

Now, the reason I bring all this up is that I’ve talked about how home prices have begun to drop again, and now we can add rent prices dropping… Now all this is good for the consumer, but not the investor who might own some REITS in these areas…  (Real Estate Investment Trusts) So, this is just a warning to those that do own them, yes they’ve been great investments in the past 8 years, but, maybe they’re getting a little long in the tooth, eh?

A full service letter is what I strive to bring you each day folks… Nothing held back, any longer, and full-on Chuck! The way things used to be… I sure hope you like it this way…  More on the currencies tomorrow, there just wasn’t much to talk about there given the small moves yesterday and in the overnight trading.

To recap… The Norges Bank and RBNZ meet this week, but no moves are expected. The RBA prints their latest meeting minutes. And we get some data from overseas this week, while the U.S. Data Cupboard gets restocked… Chuck is concerned that the U.S. hasn’t gained any friends in their negotiations with China, and Ed Steer gives us his thoughts on the Gold manipulation today… All that and more!

For What It’s Worth…  Well, I gave you teaser above about the great James Grant taking on someone regarding the Gold Standard, so there’s no reason to beat around the bush here… I found this on the GATA communique’ that they send me each day… And I thank Ed Steer for securing my place with the GATA folks!   if you have subscription to the WSJ you can also find it here:      So, here’s James Grant.. enjoy!

“Mr. Ledbetter’s book is a chronicle of the American people’s fascination with gold. He is mystified and bemused by it. He rolls his eyes at the gold rushes and the gold-centered orthodoxies of yesteryear. Whatever were our forbearers thinking?  (Jeffrey Ledbetter is the author of a book titled: One Nation Under Gold)

It’s no work at all to make modern money. Since the start of the 2008 financial crisis, the world’s central bankers have materialized the equivalent of $12.25 trillion. Just tap, tap, tap on a computer keypad.
“One Nation Under Gold” is a brief against the kind of money you have to dig out of the ground. And you do have to dig. The value of all the gold that’s ever been mined (and which mostly still exists in the form of baubles, coins and ingots), according to the World Gold Council, is a mere $7.4 trillion.

Gold anchored the various metallic monetary systems that existed from the 18th century to 1971. They were imperfect, all right, just as James Ledbetter bends over backward to demonstrate. The question is whether the gold standard was any more imperfect than the system in place today.
That system features monetary oversight by former university economics faculty—the Ph.D. standard, let’s call it. The ex-professors buy bonds with money they whistle into existence (“quantitative easing”), tinker with interest rates, and give speeches about their intentions to buy bonds and tinker with interest rates (“forward guidance”).

You wonder how the Ph.D. standard came to eclipse a system whose very name, “gold standard,” is a byword for excellence. Addressing a national television audience on Sunday evening, Aug. 15, 1971, President Richard Nixon announced the temporary suspension of the dollar’s convertibility into gold. No more would foreign governments enjoy the right to trade in their greenbacks for bullion at the then standard rate of $35 to the ounce. (Americans had long since relinquished that right; indeed, as Nixon spoke, they could not legally own gold.) Roughly a half-century later, the temporary suspension is beginning to look permanent.” – James Grant

Chuck again… Oh, and there’s so much more from James Grant on this book that I just don’t have the space for… But you get the point, Mr. Ledbetter thinks we’re all crazy to be so fascinated with Gold, and the great James Grant puts him in his place!

There is one good thing that came from the book though, and that is this story about “operation Goldfinger” it’s a very interesting story about what was going on while Gold was tied to a price of $35, and individuals were prohibited form owning Gold…  Maybe I’ll write an article about this because it’s very interesting indeed!

Currencies today 6/20/17… American Style: A$ .7615, kiwi .7257, C$ .7563, euro 1.1158, sterling 1.27, Swiss $.9736, … European Style: rand 13.0514, krone 8.4866, SEK 8.7315, HUF 275.97, zloty 3.7835, koruna 23.5342, RUB 58.09, yen 111.54, sing 1.3870, HKD 7.7993, INR 64.43, China 6.8102, peso 18.07, BRL 3.2895, Dollar Index 97.63, Oil $44.11, 10-year 2.18%, Silver $16.55, Platinum $92843, Palladium $866.35, and Gold $1,247.80 ( I lost my link to the SGE Gold price, and haven’t been able to find a good one to replace it, so until I do, no SGE price, sorry!)

That’s it for today… What a Beautiful Day it was here in St. Louis yesterday, not too hot, a nice southerly breeze, just fantabulous! Alex was here on Sunday after he got off work, and was telling us about his experiences in his summer school class: Gross Anatomy… His mom was shocked that he actually was cutting open humans that were dead of course! Every parent that had or has a child go through this kind of training has had to experience this shock! Chicago takes us to the finish line today with their song: Movin’ On, which really featured the great lead guitar playing of the late great Terry Kath, who we lost many years ago, and way too soon.. The great Jimmy Hendrix once told the sax player for Chicago, that Terry Kath was a better guitar player than he was! WOW! Oh well, with that, I’ll get out of your hair for today, and send you on your way to having a Tom Terrific Tuesday!


Chuck Butler



He’s Baaaaaaacccckkkk!

And a Marvelous Monday to you! Well, here I am in my new home for writing… I can’t begin to tell you dear reader, just how much I appreciate the opportunity to continue to write the Pfennig. And the people that are responsible for me being able to continue are Mary Anne, and Pamela Aden, aka The Aden Sisters… They have been publishing a research letter for decades, and in the last few years, they took on the Dow Theory franchise, that the late Great Richard Russell, started, his letter was the grandfather of all financial newsletters!

So, going forward, each day that I do write ( I’ll have no back up, so when I go on vacation, and stuff, we’ll print reprints of old Pfennigs), it will be sent to you free of charge just like it always has. There will be some adds added to the letter. If someone clicks on an add, and executes a purchase, etc. then I’ll received a small piece, which I will use as my “salary”…

The letter will be published by Aden Research… But one other thing, I’ll be submitting an article, hopefully on a weekly basis, on just about anything I want to write about (I still can’t believe they’ve given me that latitude!), and will be posted to the  web site… I think that a few of you will want to see what’s on my mind from time to time and this is the avenue in which to do just that!

OK… now onto the markets… It’s been a week of reading and research for me, since I had nowhere to post a Pfennig… OH! BTW, the email text version of the Pfennig will be going out, maybe by the end of the week! YAHOO!  Well, The Fed did go ahead and hike rates last week, completely ignoring the fact that the economy continues to weaken, and by a lot I might add! Why just last week on Flag Day, or otherwise known as FOMC Day, U.S. Retail Sales for May printed in the red! And it was also announced that 300 Retail Stores had closed already this year, and this would be a record year for closings!  But, let’s not allow any of this to get in the way of the Fed continuing to say that all this economic slowing is just “transitory”…  I truly believe that they have begun to use this term to hide the fact that they realize things are slowing, but can’t say that, while they hike rates!

There are some conspiracy theories out there about why the Fed continues to hike rates when the economy is slowing, but we’ll just stick with the idea that they want to fill their quiver with rates that they can cut when the recession, that’s bound to hit us sooner than later, does hit.

U.S. Treasuries aren’t drinking the Kool-Aid that the economy is growing and will soon have inflation coming out our ears, and need aggressive rate hikes, and the 10-year Treasury is still below 2.20%..

The Currencies didn’t really react too negatively to the rate hike, the euro did lose the 1.12 handle, but has traded up to it a couple times since the rate hike, and today is trading around 1.1150…  The currency I thought for sure would react negatively to the rate hike was the Aussie dollar (A$), but that was not to be, as the A$ is knocking on the door to 76-cents.

The Canadian dollar/ loonie has been one of the best performers in the past week, and had the markets scratching their collective heads, as the price of Oil remained lower, and the Bank of Canada (BOC) left rates unchanged at their last meeting without any plans for a future rate hikes. I think its simply a case of the loonie following the A$’s lead…

So, the currencies and Treasuries didn’t react too negatively to the rate hike, but… Gold sure did… Well, at least since last week it has…  The previous rate hikes by the Fed always seemed to unleash a rash of buying Gold, but not this time, it appears.  So, as I always say when I see Gold flounder like this for a few days, it’s time to back up the truck! Because in my opinion, which could be wrong, these cheaper prices for Gold won’t last long…

I was doing some reading last week, and James Rickards, who sure doesn’t hold back his predictions on things, was talking about something that I’ve been talking about for a couple of months now, and that is, simply that a recession was coming, if not already here, to the U.S. economy just based on the fact that the expansion period since out last recession had gotten long in the tooth, but now that the Fed has hike rates in the face of this weakening economy, they have brought the recession closer in time, and by the end of summer, the Fed will have to stop hiking rates, and begin to talk about reversing their rate hikes…  That will take away almost all of the credibility that the Fed has left, and the dollar will suffer from that loss of credibility, and according to Rickards, the euro and Gold will be the main beneficiaries of the dollar selling…

So, it’s nice to see him agreeing with me on this, not that he reads my stuff, so, I guess it would be better said, that “it’s nice to see that we agree on this”…   As far as the euro is concerned… Things there aren’t just down right peachy these days, but… The economy is warming up, unemployment seems to be getting better, the political problems of the Eurozone have seen 2 of the 4 major events planned for this year, come and go without any hitches, and finally, the euro is the offset currency for the dollar, so when the dollar gets sold, the euro gets bought…

I had to clean out my office and take all my “stuff” home in the past couple of weeks, I wonder how long it will take them to scratch my name off the window…  But anyway, the point I was trying to get to is that I rediscovered a book that a reader sent me many years ago, Title: Debt is Slavery, and 9 other things I wish my dad had taught me about money. by Michael Mihalik…

I wish our members of Congress would read this book! But that’s never going to happen…  But for my FWIW piece today, I’m going to quote you something from the book..

To recap…  Chuck’s back! The postings to the website will be daily now, and the email version will be available soon! The Fed hiked rates last week, and 2 of the assets we follow, didn’t react too negatively toward the rate hike, while a 3rd asset did… Gold has not seen a good day of trading since the rate hike last Wednesday, (it did close flat on Friday though).  Chuck is just warming up after being away from writing the Pfennig for a week, so come back tomorrow for more!

For What It’s Worth… OK, I already told you about the book above, so this is a piece from the book, talking about “why do we end up in jobs we don’t really like? Let’s listen in to Michael Mihalik..

“Because we sold our souls for a salary. I use the phrase, “the job you hate” a few times in the book. But maybe you don’t hate your job. Maybe you like your job. In fact, a recent poll of U.S. workers determined that about 60% of employees are satisfied with their jobs to some extent. That sounds a little high to me (although it does mean that 40 % are dissatisfied with their jobs!) Why an I skeptical?

Take an informal poll among your friends. First ask them if they like their jobs. Then ask them, “if you won a $100 million lottery tonight, would you quit your job?” I’d bet an overwhelming majority of them will answer “yes” they’d quit their jobs if they won the lottery, even if they answered the previous question with “yes ,they like their jobs”. I think a lot of people like their jobs when, in reality, they have merely resigned themselves to the fact that they have to work to pay the bills.  So, maybe most people don’t hate their jobs. But most people would choose to do something different if they were financially free and independent of money worries”

Chuck again… let me be clear here, Mr. Mihalik wrote this book in 2007, so long before all the job losses, and then people going back to work in part time jobs, etc. I’m sure the figures would be quite different in today’s world!

Currencies today 6/19/17… American Style: A$ .7597, kiwi .7230, C$ .7567, euro 1.1150, sterling 1.2735, Swiss $.9757, … European Style: rand 12.9815, krone 8.4957, SEK 8.7453, HUF 276.10, zloty 3.7811, koruna 23.4563, RUB 57.71, yen 111.55, sing 1.3869, HKD 7.80, INR 64.38, China 6.8086, peso 17.98, BRL 3.2732, Dollar Index 97.23, Oil $44.15, 10-year 2.19%, Silver 16.46, Platinum $925.49, Palladium $860.47, and Gold… $1,246.20

That’s it for today… Last week Chuck and Kathy celebrated our 41st wedding anniversary… Just another day in paradise, as they say… I hope all the dads out there had a Fantastico Father’s Day! I know I did! All the kids and grandkids were here, and we watched another Cardinals loss on TV, while the grandkids were in the pool! I had a surprise visit from two former colleagues at my Friday watering hole. Danielle and Jeremy stopped by to say hi! And Paul Revere and the Raiders take us to the finish line today with their song: Kicks  And with that, I’ll get this posted in hopes it gets read by many! I hope you have a Marvelous Monday!

Chuck Butler




Moving on . . .

Long ago, and oh so far away, I fell in love with you, before I wrote the second Pfennig… You dear reader, you have kept me going through good times and bad, sickness and health, and all my whining. I couldn’t have done it without you… The last 10 years have been difficult for me, as you know, and I never held back any of the details.

I bet you’re wondering what this is all about and what is Chuck getting at this morning… Well, I’ve never been one to beat around the bush, so I’ll just come right out and tell you that now the TIAA/ EverBank transaction has been completed I’ll be retiring from EverBank (but wait, not the Pfennig – you aren’t rid of me yet).

It has been an eventful 17 years. Building a first-class World Markets business, traveling relentlessly, speaking, and doing all the other ancillary things that go with it. And making sure the Pfennig went out every day even when I was suffering with the effects of radiation and chemotherapy. There’s a lot to do in an entrepreneurial business and it was great to be a major player.

Chuck Says, “I Told You So!”

Good day… And a Happy Friday to one and all! I’m having a tough time focusing this morning, and my infusion confusion hangs on, and this morning, it’s making it tough for me to see clearly. I need some Johnny Nash right now… I can see clearly now the rain is gone… But, hey! I’m not going to let seeing double or blurry words on a screen stop me! It was crazy at the doctor’s office yesterday and the infusion center… What should take no more than 2 hours tops, took 4 hours… UGH! The Late Great, Dan Fogelberg greets me this morning with his song: As The Raven Flies… I used to play that song on my guitar… But wouldn’t remember the first chord now… UGH!

It’s All About The Triple-Witching Thursday, Tomorrow!

Good day… And a Wonderful Wednesday to you! The 13-run pools around the country were all broken and paid out with the 13-runs the Reds put on my beloved Cardinals last night… It got so ugly I turned it off to watch re-runs of The Big Bang Theory! I slept pretty good last night, but can’t seem to get the motor started this morning! UGH! It will eventually start and then everyone needs to watch out! HA! Pink Floyd greets me this morning with their song: The Fletcher Memorial Home… I bet there’s not a lot of people that have that one on their iPods!