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 www.dowtheoryletters.com  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