September 1, 2021
* Currencies & Metals see little movement on Tuesday…
* ECB to meet tomorrow, with inflation rising…
Good Day… And a Wonder Dog Wednesday to you! See that? I changed it up today, aren’t I the tricky one? HA! Man that hurricane Ida sure has caused some damage after landfall, and moving N.E… That video of the highway in Mississippi collapsing was scary… I hope everyone in Ida’s path have taken precautions and will be safe… About 8 years ago, I wrote a Sunday Pfennig, (yes we did those back in the day) and in it I said that one way to reduce our debt was to end all wars… That not only meant the current war in Afghanistan, but also, the war on drugs, the war on poverty, and we didn’t know about COVID back then but you could easily add in the war on COVID… What a waste of money through the years we as a country have spent on these stupid things… As if, we could stop drugs… As if we could end poverty… And now as if we could control a virus…. I’m just saying… Michael Stanley greets me this morning with his rock classic song: Let’s Get The Show On The Road…
I think I heard some of you saying the title of that song, as I went on about money spent on wars… You may recall that I also said that we, as a country, should close all bases around the world and bring the soldiers home to defend our borders… Remember that was 8 years ago, before our southern border became political… OK, now onto the markets…
Well, the dollar selling that went on in the overnight markets of Monday into Tuesday, saw a stop put to it during the U.S. session yesterday, and the dollar rallied to recover some of its losses overnight. The BBDXY started the day at 1,144 and ended it at 1,146… So not a huge move, but a recovery for the dollar any-old-way you look at it… Gold found a way to add $3.90 to its value and close at $1,815.10. Silver however, never found a bid on Tuesday and lost 13-cents to close at $23.98… I had a reader from Denmark send me a note yesterday, and asked me if I thought starting a class action suit against the price manipulators was a good idea…
I referred the question to Ed Steer, who happens to be a board member of GATA… Ed responded quickly, and said, “There have been lots of suits tried, but all have either all petered out, or failed.
Most banks involved have already been charged and found guilty, but they continue doing it anyway, because neither CFTC nor SEC will purse it with the zeal it needs.”
Ed then went on to tell me the following: “And according to Ted Butler, JPMorgan got out of its short positions in everything precious metal related back in March and April of 2020. That big price smash back then was them exiting stage left.”
I want to thank Ed Steer for that explanation… And thank him for his daily letter on Precious Metals… He’s an expert in the field of precious metals folks… and you can find him here: www.edsteergoldsilver.com
In the overnight markets last night… There’s been little to no movement in the currencies and metals in the overnight and early trading sessions to speak of. The BBDXY is trading at 1,146.31 this morning after closing yesterday at 1,146.78… So, see? And Gold starts the day down $1.40, while Silver is flat as a pancake (Head East)… There’s some economic data for the markets to deal with today, so let’s see where that takes us…
Ok, here’s a report on CNBC,com this morning that hits home… “The Social Security trust fund most Americans rely on for their retirement will run out of money in 12 years, one year sooner than expected, according to an annual government report.
The circumstances, which were exacerbated by the Covid pandemic, threaten to shrink retirement payments and increase health-care costs for Americans in old age sooner than expected.
The financial outlook for Social Security and Medicare, two of the nation’s preeminent safety net programs, has deteriorated over the past year.”
Chuck again… My dad used to tell me that I should never rely on Social Security for my retirement. He told me that he didn’t see how it would still be feasible to pay people their money back when so many baby boomers were retiring in the coming years… That’s the thing that makes me so angry, folks… I’m only asking for my money back that I put into the system through payroll deductions that I made since I was 15 and working selling subscriptions to the Globe Democrat, door to door!
The European Central Bank (ECB) will meet tomorrow and as I told you yesterday, inflation in the Eurozone is rising quickly… So what will the ECB do, ignore the rising inflation, like their brothers-in-arms at the Cartel? Or do they address it, and act like a real Central Bank that’s main mandate is to not allow inflation to rise?
And don’t look now, but Japan is implementing another stimulus plan… That makes 100 of them so far… I’m exaggerating here, but you get the point, they keep making stimulus packages, and their economy is remains mired in a deep funk… We’re turning Japanese, I really think so!
I had a longtime reader send me note yesterday, asking where the recap had been? I was like, Holy Cow, I knew each day I was forgetting something, but couldn’t put my finger on it, but that was it… The RECAP! What dolt I had been forgetting to add that each day…
Well, the Data yesterday here in the U.S. wasn’t good, and makes you wonder why on earth did the dollar rally? Everything from Consumer Confidence to Pending Home Sales saw HUGE drops from the previous month… The only piece of data that was positive was the Case/Shiller Home Price Index, which went from +16.8% in May to 18.6% in June… That’s the fastest pace of House Price appreciation on the books, in history, folks… And there’s no Housing bubble? And that positive data print is actually a negative data print if you are someone looking to buy a house right now…
The stupid Consumer Confidence saw a HUGE index number drop from 125.1 in July to 113.8 in August… I’ve always said that this data print was nothing more than a pulse of the stock market… Well, the stock market hasn’t exactly been on fire lately, but it hasn’t exactly lost a lot of ground either, and so that makes me wonder what’s on the minds of these Consumers right now… I would think the Delta variant of the COVID Virus is the monster under the bed right now…
If I were to be asked this by an interviewer, I would say that it’s the same thing I’ve been saying for months now, and that is, that we all know in our heart of hearts that there’s something wrong here in the U.S. and while we can’t put our finger on exactly the one thing that’s wrong, we all know that somewhere along the line there’s going to be debt reckoning… Good Friend, Dennis Miller, sent me a picture yesterday of a gas station bill board, that said, “Has anyone tried turning off the U.S. and turning it back on?”….
OK… onto other things… I received a note from the great Mogambo Guru on Saturday, welcoming me back writing the Pfennig… See? The Mogambo sounds harsh at times in his notes, but he’s got a big heart! I wish I had thought of him when I was thinking of who could write something for me when I returned… Of course I was completely satisfied with the stuff Frank Trotter wrote for me… (Thank you Frank! ) But bringing the great Mogambo Guru out of retirement would be a hoot!
Last Friday, Cartel Chairman Jerome Powell, was talking with reporters after he signaled that the Cartel’s monthly bond purchases would begin to be tapered by year end, and said, “while inflation is solidly around the Fed’s 2% target rate, “we have much ground to cover to reach maximum employment,” which is the second prong of the central bank’s dual mandate and necessary before rate hikes happen.”
Now, I’m going to take this apart because he has thrown me a softball without any arch to hit… First of all how on earth does he believe that inflation is “solidly around 2%”? The Fed’s key inflation gauge just showed a 3.6% increase in August the largest since 1991… So tell me, how does his math work out that 3.5% is solidly around 2%… Oh, wait! I see what went wrong here, he meant to say that inflation was solidly higher than the 2% target…. Not that I want to put words in his mouth… Or, better yet, maybe I should be his writer!
And notice that he said that the Cartel’s dual mandate is inflation and employment? When is he going to stop being worried about the stock market? Well, at least we all know that he knows what the Fed’s responsibilities are, now we have to wonder why inflation isn’t getting attention…
Today’s Data Cupboard has the ADP Employment Report for August, and the so-called experts believe it will show that 600,000 people found jobs in August… I know one thing, that if that’s true, then there’s 600,000 more jobs that need to filled before the economy can grow… Now, whether or not they get filled is another story… There are hoards of people willing to get back to work, and then there’s hoards of people that just don’t want to go back to work… And for that not wanting to work we can give the credit to our illustrious leaders (NOT!) and the Cartel for keeping rates ultra low…
To recap… The dollar was bought on Tuesday during the U.S. session, although the buying didn’t recover the loss the dollar took overnight. The U.S. Data was awful yesterday, except for the Home Price Index, which we all knew would be strong again… So, there was no reason for the dollar to rally, but it did… Chuck asks Ed Steer about suits being filed against the price manipulators, and Chuck realizes that he’s forgotten the recap for over a week! ‘’
For What It’s Worth… Ok, this is an article that some will like and some will not, but it’s investor John Paulsen talking about Gold and other things like Bitcoin, and it can be found here: Is Bitcoin a Good Investment? Billionaire Paulson Says Crypto ‘Worthless’ Bubble – Bloomberg
Or, here’s your snippet: “Now though, more than 14 years after CDOs and credit-default swaps dominated everyone’s attention, Paulson is again seeing signs of excessive speculation.
Paulson, 65, is increasingly concerned about rising prices, he said in an episode of “Bloomberg Wealth with David Rubenstein.” The rapidly expanding money supply could push inflation rates well above current expectations, he said, and gold, which he’s backed for years, is primed for its moment.
His harshest words are for the hottest investments of this era. SPACs, on average, will be a losing proposition, while cryptocurrencies are a bubble that will “eventually prove to be worthless.”
“I wouldn’t recommend anyone invest in cryptocurrencies,” Paulson told Rubenstein, co-founder of Carlyle Group, on Bloomberg TV.
Paulson’s dismissal is sure to attract critics after digital assets vastly outperformed gold in recent years. His record since the “greatest trade” has also been mixed. He turned his hedge fund firm into a family office last year after assets dropped to about $9 billion in 2019 from a peak of $38 billion in 2011 and he found himself managing mostly his own money.”
Chuck Again… it’s nice when I read about a famous investor that has the same thoughts as I do…
Market Price 9/1/2021: American Style: A$ .7340, kiwi .7050, C$ .7937, euro 1.1820, sterling 1.3755, Swiss $1,0905, European Style: rand 14.4366, krone 8.6957, SEK 8.6306, forint 294.29, zloty 3.8167, koruna 21. 5179, RUB 73.29, yen 110.33, sing 1.3465, HKD 7.7770, INR 73.01, China 6.4608, peso 20.03, BRL 5.1685, BBDXY 1,146.31, Dollar Index 92.63, Oil $68.60, 10-year 1.32%, Silver $23.98, Platinum $1,014.00, Palladium $2,570.00, Copper $4.22, and Gold… $1,813.70
That’s it for today… Cardinals & Reds play two today, as IDA rained out last night’s game… And we’re supposed to see not as hot weather, so that means I’ll be outside watching the first game at least… I sat outside reading for about an hour yesterday, and then had to go inside, it was getting too hot! I love warm weather… not excessively hot weather, of which we haven’t had a ton of this summer here in the Middle of the country. Well, I haven’t fallen lately and that’s a good thing, and the brain fog seems to have lifted. I still get worn out too easily… My platelets were low last week, and so I have to go back to the lab next week for another blood draw to see if they’ve improved… I would imagine they will have improved, as it was too soon after getting out of the hospital to take a reading of them… I’ve been able to keep my blood sugars in check, and that’s a good thing! The Chicago Transit Authority, aka Chicago, takes us to the finish line today with their song, and one my faves: Beginnings… I hope you have a Wonder Dog Wednesday, and please Be Good To Yourself…
Chuck Butler