July 1, 2020
* Currencies rally in daylight, get sold overnight
* Gold trades to $1,804 before the boys in the band show up…
Good Day… And a Wonderful Wednesday to you! and welcome to July… Pfennig tradition calls for this… There I was on a July morning, looking for love, with the strength of a new day dawning, and a beautiful sun… Those lyrics come curtesy of Uriah Heap, the band, not the Dickens character! Another day of rain and clouds yesterday, and this morning, but by noon, it’s all supposed to leave us and bring us back our sunshine and blue skies! But it IS that time of year, when the days heat up, and bring about a Thunderstorm, and then leave us with hot and humid days… So… We carry on! I slept through most of yesterday, as the daylight hours without a nap finally caught up with me! Jonathan Edwards greets me this morning with his classic song: Shanty… Now all you old time rockers will have that song in your heads all day today… not that that’s a bad thing!
We sat around last night and talked about face masks, who’s wearing them, and who isn’t, should we continue to wear them when out, and all sorts of things virus related. The conversation started when I informed Kathy that she had to self quarantine for two weeks… That blew over like a led balloon!
OK… Well, the BIG NEWS yesterday, was that Gold reached $1,800 for the first time since 2011… Then in news not covered, the price manipulators brought Gold back to $1,780 to end the day… But it won’t be long now before Gold moves past $1,800 and to infinity and beyond! Slowly, but surely, the sheeple will get the memo that says the economy isn’t coming back any time soon, and that Gold is going to outperform every asset class…. Silver didn’t see the late selling that Gold did, and was able to move above $18 and remain there for the day, closing at $18.24… It was last summer that we saw Silver begin to really move higher, and the thought then was that first we would see $20 and the $25, in Silver… But then the rug was pulled out from under Silver, and it’s taken nearly a year for it begin to look like it’s going to move higher again.
Back to Gold for a second… I loved the way Ed Steer explained the price manipulation, in his letter this morning that can be found here: www.edsteergoldsilver.com, here’s how he explained it, “. A serious rally began at that point – and it really began to soar at the 10 a.m. EDT afternoon gold fix in London. ‘Da boyz’ were forced to step in a few minutes before the London close, as the market was about to go ‘no ask’. About fifteen minutes later it began to get sold quietly and unevenly lower.”
So Gold was allowed to hold onto $7.5o of its gain on Taco Tuesday, to close at $1,780…
The dead men walking, the currencies, found a way to push the dollar bugs aside, and rally on the day, with the euro reclaiming the 1.12 handle, and all other currencies falling in behind the single unit. One day rally, next day sell, the next day rally, the next day sell… I told you all that this is how the last weak dollar trend began in 2002… But seriously, here, do traders really take this long to make up their minds on which way the dollar is going to go?
For the record, there’s still more money printing to be done by the Fed, folks… There’s still more debt to be added to the current debt of 26+ Trillion, as more stimulus checks seem to be on the way… I know that some of you were with me back in the mid 90’s, but this is what this reminds me of… Japan… By 1995, Japan’s stock market had gone to hell in a hand basket, and the economy was suffering big time, and Japan’s answer to it all was stimulus…. And then zero interest rates, And then quantitative easing, and then share buybacks, to the point that the Japanese Gov’t is the stock markets largest holder of stocks now… And what has it gotten them? Well, they’re still around, they haven’t collapsed, but… they’ve had deflationary economies year after year, with no growth… Now ask yourself this… “does this sound a lot like what we’re going through here?” Man, if in two decades, we’re still wallowing around in the mud of no growth…. Maybe someone will say, hey! Remember that guy, Chuck Butler who used to sing the Violent Fems song: I’m turning Japanese, yes, I really think so… I wonder what he would say now?
If, in fact we are beginning a new weak dollar trend, that’s going to be bad news for a lot of countries, because their respective currencies will be going up in value VS the dollar, whether they need them to or don’t! Take Japan, during the last weak dollar trend, we saw yen go below 100… (it’s a European priced currency, so that means as the price goes down, the more value it returns when buying dollars) that was the last thing they needed at that time, and it will be the last thing they need at this time, but being a secondary offset currency to the dollar, with the euro being the main offset currency to the dollar, yen is going to rally… The Bank of Japan (BOJ) will first attempt to jawbone (threaten the markets with intervention) , and when that doesn’t have any lasting power, they will turn to intervention, but the trend is not going to be their friend!
And that resistance to stronger currencies by the countries that own them has been illustrated both overnight markets this week, with last night seeing the currencies being brought back down after a day of rallying… I really dislike this back and forth stuff, I would much rather see a trend put in place and have them either move higher or lower consistently…
Ok, a quick perusal through Twitter yesterday found this little ditty… First the Tweet, then my take, ok?
“The #BISInnovationHub is pleased to announce a strategic partnership with
to further the development of fintech initiatives for the global financial system” – from Twitter 6/30/20
OK… for those of you not following along in class previously… Remember when I told you that all the crypto currencies didn’t mean a thing in the long run, because once the Gov’t came out with their version of a C.C. it was all over for the other guys… Well, now you have to the two most powerful Central Banks in the world, (the Fed & BIS) joining together to come up with their own C.C…. Go ahead and laugh you Bicoiners… The last laugh will be on you! You see the steps that I laid out for you on how this current financial system will all come to and end, come together, and you start to think… “Hey, maybe Chuck was onto something”…
In another Tweet that made me smile… here’s Lyn Alden regarding Gold on her Twitter feed.” Pretty much every currency in the world has devalued by at least 10% relative to gold since Ray Dalio infamously said “cash is trash” at Davos in January of this year.” Lyn Alden’s Tweet 6/30/20
I had said at the time of his comment, that Gold had set new high records against nearly all currencies in the past year, and in 2020, it was time for Gold to set its new record high VS the dollar… Well, in inflation terms… Gold was there yesterday briefly, as I explained above…
The U.S. Data Cupboard yesterday was interesting even though it didn’t really have market moving data… The Case/ Shiller Home Price Index for April moved higher… Hmmm…. And the Chicago PMI (manufacturing index) moved higher in June from 32 in May to 36 in June… Not exactly what everything thought it would be (higher)… There’s no sign of a V-shaped recovery there… And in the stupid Consumer Confidence data it not only moved higher in June, it soared! CC was forecast to rise to 90… it came in at 98! So, everyone is confident that things are going to work out just rosy, eh?
Well, I suggest they don’t tell the folks a shale pioneer, Chesapeake Oil, for they filed bankruptcy the other day, and don’t tell Shell Oil, who is inching toward a write down of $22 Billion in debt… Hmmm… And what’s this that 87% of the people polled on who they would vote for, said they were not happy with the direction of the country… But don’t worry about it Consumer Confidence is flying higher!
And this news just came across my screen this morning… The operator of Pizza Hut and Wendys is going to file for bankruptcy… Come on Fed, why didn’t you buy their debt to help them out? What? you don’t like a frosty, or a meat lovers pizza?
The U.S. Data Cupboard will be busy today, as the data reports are plentiful today. Leading off today is the ADP Employment Report for June… Not to be confused with the stupid BLS report of lies, I mean of jobs that will print tomorrow. Batting second will be the June ISM (manufacturing index), which for the previous two months was below the 50 line in the sand… then up third will be Construction spending for May, and then batting clean up will be the Fed’s Meeting Minutes from their last meeting, and finally, Vehicle Sales for June will print…
All of the June prints seem to be suggesting that the opening of the economy has made a difference, wrapped a tourniquet around the bleeding if you will, but do not suggest that the economy has recovered… but come to think of it the economy wasn’t much to talk about before the pandemic, so the bar isn’t exactly raised to a level out of reach! I’m just saying…
To recap… Gold rose to $1,804 yesterday, a record high in inflation terms, but just about when Gold was ready to go “no ask” the price manipulators arrived and took Gold back to $1,780… The currencies rallied nicely VS the dollar yesterday during the day, but once again they were sold in the overnight markets… Chuck explains why… Silver is back above $18…. Hmmm…. And the Fed and BIS are joining forces folks to design a crypto currency… and the steps to an end of our financial system have begun…
For What It’s Worth… Well, you knew that eventually that the grim reaper for home owners was going to show up. The home owners received a reprieve when the Covid-19 virus came about, and prohibiting foreclosures for non payment of loans until July 25th…. Well, today is July 1st… And no one on Capital Hill seems to be talking about an extension… That’s what this article is about, and it can be found here: https://thehill.com/policy/finance/505139-millions-fear-eviction-without-more-aid-from-congress
Or, here’s your snippet: “ Millions of tenants are at risk of receiving eviction notices in late July as protections from a major coronavirus stimulus program are set to expire.
The coronavirus relief bill, signed as the CARES Act in late March, included a moratorium on evictions for tenants in units with federally backed mortgages or other assistance who were unable to pay rent.
But with no agreement in Congress on an extension of the moratorium, families hit hard by the coronavirus pandemic may soon have to make new living arrangements.
“There are now only 25 days left before the federal eviction ban expires on July 25,” said the Financial Services Committee, on Monday.
“When it does, many families who have been unable to pay their rent because of the COVID-19 pandemic will face eviction and the devastating consequences that evictions have on families, particularly children,” she added.
The federal moratorium only applies to housing being paid off through federally backed mortgages or insurance, so it only applies to about a fifth of renters.
But because many of the government programs are aimed at keeping costs down for low-earners, those renters also tend to be among the most vulnerable.”
Chuck again… I see an 11th hour agreement to extend this coming on July 24th… But until then there will be lots of nervous people wondering if they will get an eviction notice or not….
Market prices 7/1/20: American Style: A$ .6885, kiwi .6448, C$ .7360, euro 1.1200, sterling 1.2389, Swiss $1.0550, European Style: rand 17.2605, krone 9.6047, SEK 9.3575, forint 316.35, zloty 3.9787, koruna 23.8040, RUB 70.73, yen 107.48, sing 1.3955, HKD 7.7503, INR 75.32, China 7.0682, peso 22.97, BRL 5.4296, Dollar Index 97.54, Oil $39.84, 10-year .68%, Silver $18.21, Platinum $813.50, Palladium $1,925.13, and Gold $1,781.26
That’s it for today and this week… I hope everyone has a safe and fun Independence Day Holiday weekend! I have no plans, like most people, who are adhering to the guidelines… I know that I’m a “high risk” person, given my health situation, so I take zero chances! Well, the 2nd QTR is finally over! I think that was the longest quarter on record! So, long, and don’t let the door hit you in the rear, as you leave, 2nd QTR! I’m really ready for some sunshine, and blue skies, I have to admit I don’t know how the folks in the Northwest deal with rain all the time… but I guess if that’s what you’re born into, you know of no other weather! But still… I would be fitted for a white suit if I had to live there! OK… The good reverend Al Green takes us to the finish line today with his song: Love And Happiness… I love the music in this song! Ok, with that, I hope you have a Wonderful Wednesday, and Incredible Independence Day Weekend! Please Be Good To Yourself!