March 15, 2021
* Currencies saw some slippage on Friday…
* Gold stages a Big Comeback on Friday…
Good day… And a Marvelous Monday to you! Well… My beloved Cardinals won 2 of 3 over the weekend, the Blues lost 2 games, and Mizzou found itself in a real tournament bind. For if they find a way to beat Oklahoma, they then would play #1 and undefeated, Gonzaga… That’s really a bad draw for my Tigers, but they brought it on themselves… My St. Louis U. Billikens didn’t make the tournament, as their covid shutdown for 3 weeks really hurt their chances… It was chamber of Commerce weather here this past weekend, and I spent most of my time outside, in the sun! The Great Ray Charles greets me this morning with his song: You Don’t Know Me…
OK… Well, Friday was interesting for the metals… Gold which at one point in the day was down $17, found a way to rally at the end of the day to gain $4.80, while Silver fought back to close down just 16-cents on the day… Gold’s closing price was $1,728.90, and Silver’s was $26.03…
The currencies which had seen a couple of days of rally notched in their belts, pretty much ended the week flat on Friday… The Dollar Index rose from 91.56 on Thursday morning, to end the week at 91.67… There wasn’t much to move the dollar to be bought on Friday, it just seemed to be the thing to do to end the week… Again, let me repeat… I just don’t get it that traders are buying dollars, right now… The $1.9 Trillion in new deficit spending was passed at the end of the week, and before the President’s signature in ink, dried, there was talk of a $3 Trillion infrastructure Bill that’s coming…
Oh, sure, why just $3 Trillion? Why not make it $5 Trillion or $10 Trillion? It’s just money, and contrary to what my mother always preached to me… Money does grow on a tree… The Magic Money Tree… And don’t worry about how it will be financed, because the Fed is the buyer of last resort… I can’t begin to tell you just how wrong this type of thinking is… But I’ve already told you before and I’m not gong to be accused of having dementia and forgetting that I had already told you!
In the overnight markets last night… There has been some additional dollar buying, as the Dollar Index has moved higher to 91.77… The moves in the currencies aren’t really noticeable, with the euro, taking on most of the damage of the dollar buying. This surprises me because of what the ECB said last Thursday… Oh, shoot, we may as well get into that now… but first, Gold is up a buck or two in the early trading and Silver is up 18-cents, so a good day so far for Silver…
Did you happen to read or hear what European Central Bank (ECB) President, LaGarde, had to say last week about how the ECB would react to the rising yields in Bonds? In her best, Fed Chairman Powell, voice, she said that the ECB would step of their buying of bonds to keep yields in check… So, what’s good for the goose is good for the gander, right? The ECB is simply aping what the fed is doing… Hey, if one’s going to go down, we may as well all go down together! Well, you may as well get used to the idea now of them all going down together, because in my opinion, this is exactly what’s going to happen eventually…
So, as I was saying above, the slippage in the euro has surprised me, because if the dollar gets kudos for having a bunch of knuckleheads in their Central Bank, then it only goes to reason that the euro would get kudos for showing that their Central Bank also has a bunch of knuckleheads! But Nooooooooo! Now there’s no rule or regulation that requires currency traders to buy a currency whenever their Central Bank shows no monetary intelligence, but it just goes to reason that if the dollar gets love for this, then the euro should too…
And if you’re one of those people that truly believe that the economy will soar once everyone has a vaccine, then you might as well move along, for what’s coming is not the droids you’re looking for…
I will concede that the initial jolt to the economy of starting up again will be impressive, but it won’t have lasting or follow up power, and then what will we as a country do? Do you know that the U.S. has spent $5 Trillion in deficit spending since a year ago when the pandemic was first announced? And what has it produced so far? I’m just saying…
I’m sitting here, watching the sun rise out of the ocean this morning, with no clouds to block the view… One huge orange ball that lights up the day… I think to myself when I’m alone here in the morning, writing this letter, and watching the sun rise that I sure am a lucky person…
The U.S. Data Cupboard last week was interesting in that the Weekly Initial Jobless Claims slipped to 712,000 from 754,000 the previous week, and the pundits were all slapping each other on the back and congratulating themselves for writing that the economy was turning around… But, as usual, I would like to take a different look at this number…. Yes, it was lower, but…. at 712,000 its still a number that’s greater than any during the Great Recession of 13 years ago… Think about that for a minute… the number of jobless claims is falling but… it’s still greater than any number of jobless claims during the Great Recession… I believe that to be quite telling about how tentative this economy is…
We also saw the PPI (wholesale inflation) surprise the heck of me, as you may recall that January’s PPI had shot higher to a 1.3% gain, and I was fully expecting February to follow up January’s gain, and it did, but not by much only gaining .5% in February… For those of you new to class, the wholesale inflation feeds into Consumer inflation… But these indexes are so cooked, massaged, and manipulated to tell us what the Gov’t wants us to know… I’m just saying…
Tomorrow’s Data Cupboard will have the Big economic reports of Retail Sales and Industrial Production and Capacity Utilization… So, I really don’t think we’ll see much movement in the currencies and metals today, as traders want to see the color of these reports before making may definitive moves…
To recap… The dollar ended the week being bought, not by the truck loads, but being bought… Gold was down BIG on Friday, but then came back to end the week up $4.80… Silver was also down Big, but couldn’t get back to even and ended up down 16-cents… In the overnight markets last night, there’s been more dollar buying, but again, not by great numbers, just some general buying, as if the currency traders are saying, “give us a reason to sell”…
For What It’s Worth…. I just knew that longtime friend, and publishing guru, Bill Bonner, would give me the low-down on the Stimulus Bill… And so, I thought that it would be great to give you his thoughts as well, and so… I couldn’t find the article on Bill’s site, but found another site that carried the letter and you can find it here; Biden Delivers a Sucker Punch – Money Spending For All (rumrebellion.club)
Or, here’s your snippet: “Oh, don’t be silly, Dear Reader. Most likely, not a single life will be saved as a result of this boondoggle. Nor does it really redress the harm done by government busybodies, when they created a panic and shut down the economy.
GDP fell about 2.3% last year. That’s about $498 billion. Last year’s “relief” measures have already offset that with $3.1 trillion. This latest “relief” package brings the total “stimulus” handed out by the feds in response to the coronavirus pandemic to $5 trillion – more than 10 times the actual economic loss.
And according to the Committee for a Responsible Federal Budget (CRFB), many of these provisions in the latest “stimulus” package have sunset clauses… meaning they are scheduled to expire sometime in the future. That is how the total cost – as grand as it is – stays under $2 trillion.
But what will most likely happen is that as the sun begins to set, the politicians will agree to extend the programs. In the end, says the CRFB, the cost will probably end up closer to $4 trillion than to $2 trillion.”
Chuck Again… I keep saying over and over again that a bad precedence had been set by showing the citizens of the U.S. that their Gov’t could just print up some dollars and send them checks for not doing a single thing, and soon they would be crying for more… Well, the ink isn’t dry on this set of checks being sent out, and already the crying has begun…
Market Prices 3/15/21: American Style: A$ .7746, kiwi .7195, C$ .8026, euro 1.1933, sterling 1.3926, Swiss $1.0776, European Style: rand 14.8323, krone 8.4408, SEK 8.5375, forint 307.75, zloty 3.8425, koruna 21.9201, RUB 73.23, yen 109.05, sing 1.3444, HKD 7.7645, INR 72.53, China 6.5068, peso 20.63, BRL 5.5501, Dollar Index 91.77, Oil $65.80, 10-year 1.61%, Silver $26.21, Platinum $1,222.00, Palladium $2,427.00, Copper $4.11, and Gold… $1,730.70
That’s it for today… A little shorter than usual… I’m still on that rotation of shorter Pfennigs, for no particular reason, it’s just how they come out! Well, this will be the last week for me as I head to my annual Spring Vacation on Thursday, the day after St. Patrick’s Day! No parades, no festivals this is going to be a real bummer of a St. Patty’s Day… I’ll still celebrate my Irish heritage, with some corned beef and cabbage, and green beer, but not like I used to celebrate it! I’ll be going to Roger Dean Stadium for the ball game today… It’s going to be a hot one… like seven inches from the midday sun! But I love it! Daughter Dawn and her family will be down here at the end of the week, and my darling granddaughter Delaney Grace will sing the national anthem at Roger Dean Stadium. I can’t wait to hear that, I know now that there will be misty eyes… Ok… The great Stevie Wonder takes us to the finish line today with his song: My Cherie Amour… (love that song!) I hope you have a Marvelous Monday, and will Be Good To Yourself…
Chuck Butler