December 16, 2020
* Currencies drift on Tuesday, but rally overnight
* Dollar weakness leads to rallies for Gold & Silver…
Good day… And a Manfred the Wonder Dog Wednesday to you! BRRR… it’s cold outside! I can’t wait to get down to S. Florida for the winter. I told Kathy last night that it appeared we could be spending a longer time in Florida this winter, as Major League Baseball is considering starting Spring Training games in April. They want all players, and team personnel to have been vaccinated before showing up to Florida or Arizona. And apparently they don’t think that can happen between now and the middle of February, when pitchers and catchers normally kick off spring training. Our St. Louis University Billikens Basketball team played last night, and beat Indiana St. handily…. I’m thinking great things about both the basketball teams I follow, SLU and Mizzou, for this year. They both are upper-class laden teams, which I think is important.. (Not to Kentucky, but everyone else!) The late Great Dan Fogelberg greets me this morning with his song: Lessons Learned… “Lessons learned are like bridges burned, you only need to cross them but once”…
Alright, alright, I was one day ahead of what’s going on in the U.S. Data Cupboard yesterday! What a dolt! So.. to straighten this all out…. YESTERDAY, Industrial Production printed for November, and saw a .4% gain, down from 1.1% in Rocktober… And Retail Sales won’t print until today! UGH! I can’t believe I did that! No, wait… I can believe I did that, because, I’m a dolt! So, sorry for all that being wrong and off a day yesterday… I can’t promise I’ll never do that again, because, well… When you’re a dolt, you can’t ever be sure!
The currencies didn’t move much yesterday and they just sort of drifted all day long… The Dollar Index, which yesterday morning traded at 90.56, ended the day at 90.50… So… you can see right there that there was little movement in the currencies on Tuesday. Gold & Silver, however, were a different story! Gold rose $26.60 on Tuesday to close at $1,854.80, and Silver rose 63-cents to $24.55… There was news yesterday that a new stimulus package was being discussed by the parties involved. And that means going deeper into debt, more currency printing, and… something that’s called collateral damage, in that, this would be the second stimulus, and that would start the clock on the 3rd stimulus, because once you opened Pandora’s Box of giving people money, they’ll always want more, and more, and more… And when you cut them off and make them go cold Turkey on cash giveaways, they take to the streets… I’m just saying…
I love it when long time fiend, and publishing guru, Bill Bonner talks about the currency printing as “fake money”… Because that’s what it is! It’s created not from hard earned wages, or wealth accumulation, it’s printed out of thin air… It’s Fake Money”!
OK… in the overnight markets… it has been a different story, as the dollar has been getting sold like funnel cakes at a State Fair! The Dollar Index this morning has fallen to 90.22, the euro is within spittin’ distance of 1.22, and Gold is following up yesterday’s large upward move with a positive start to the day…
One has to wonder what’s behind the last two day’s move in Silver, which has outperformed Gold on a percentage basis… Silver this morning is up 62-cents, which means it is up $1.25 in the last two days. Remember what I’ve told you previously, that in the last bull-commodity market that Silver outperformed Gold in 7 of those 10 years… On a percentage basis, for we know that the current Gold’s price is much larger than Silver’s price…
That little thing that Kitco has on their site that allows you to see the price action in the metals, tells me that most of Gold & Silver’s moves overnight have been courtesy of the weakness in the dollar… So, as I’ve said before you can look at these increases two ways… You can say Gold gained VS the dollar, or you can say that the dollar lost VS Gold…
I keep reading more and more articles about different countries announcing their plans for implementation of a digital currency… Singapore, was the latest to do so… The U.S. has announced any such plans, yet, that is, but they did say that they were working on developing a digital currency… I would imagine that takes in far more obstacles than in Singapore… Remember, I first told you montths ago about how the U.S. would introduce a digital currency, and you would wake up one Monday morning, turn on your computer, log in to your bank account, and find that it no longer reflected dollars held, replaced by digits… This isn’t going to happen overnight, next week, next month or maybe even next year, it all, to me that is, depends on when the U.S. has to default on any of their debt, and the dollar begins to fall like a rock…
It’s been a month of Sundays since we last saw the S. African rand below 15… But that’s where we find it this morning, and to me this is just another sign that the new weak dollar trend is beginning… For when a currency like the rand begins to rally, you know that dollar selling is the cause of that rally… I’m not touting the rand to own… With all the corruption in that country, I’ve always said that “I wouldn’t touch rand with YOUR ten foot pole!”
The price of Oil rose about 50-cents yesterday, as the news of another stimulus got Oil traders feeling giddy about the return of demand for their product. The Petrol Currencies have been noticing this rise from $45 a week ago, and have been adding to their gains VS the dollar… The Russian ruble, Norwegian krone, Brazilian real, Canadian dollar/ loonie, and even the Mexican peso, and British pound sterling, have all been rising VS the dollar in recent weeks… but especially in the last 10 days…
Remember a month or so ago, when I wrote about how a dear reader sent me a note and asked me what was up with the Russian Ruble, that the price of Oil had been rising but the ruble wasn’t? And I provided a quote from the finance Minister, who said, “ the Ruble is weak right now, but it will come back”… How did he know? The ruble which on 11/2/2020 (just 6 weeks ago), was 80.57, and this morning it is 73. ….. Another sign that that a weak dollar trend is in place…
I had a dear reader send me a note a couple days ago, and ask me how the C$ had gone from 74-cents to 78-cents that day? I went back and found that the C$ had been moving steady Eddie, and very stealthily upward for about two weeks, and had been trading with a 78-cent handle for about 5 days… But you can imagine some readers that don’t read the letter very often and tune in every now and then going to the currency roundup and seeing currency prices that they haven’t seen in years. And the last time they saw the currencies at these levels, they were coming down… Now they’re going upward!
Of course, it’s the opposite for Gold & Silver, these two have seen engineered takedown after engineered takedown to bring Gold from $2,000 down to where it’s trading this morning. Those every now and then readers would be wondering what the hell happened to Gold? Shouldn’t it be on the rally tracks along with the currencies VS the dollar? Well, sometimes yes, but this time no… You see, what’s going on with Gold is two things… 1. It’s currently a “risk off” scenario in the markets, and 2. The darn price manipulators, who take shots at Gold whenever there’s a day when there’s weakness and they pile on to make the day worse…
But… Gold is still the best performing asset class since 2000…. I’m just saying…
Today is a Cartel, I mean a Fed Meeting… Investors are looking for the Fed Heads to signal even more accommodating fiscal policies…. Any MORE? How could they be even more accommodating than they are now? Well, I guess they could go negative with rates, but I’m hoping that they take their cue from Sweden, who went negative a couple of years ago, and then decided that it wasn’t worth it, and the Swedes went back to ZIRP (zero interest rate policy)…
Cartel, I mean Fed, Chairman Jerome Powell, will hold a press conference after the meeting, but don’t expect anything earth moving from him… He’s just managing to keep the apple cart upright right now…
To recap… The currencies drifted all day yesterday, but Gold & Silver had great days! Gold rose $26 on the day, but in the overnight markets the dollar is getting sold like funnel cakes at a State Fair, as more discussions of another stimulus package is back on the negotiating table, even with the rollout of the virus vaccine… more “fake Money” to be sent out… You see, Deficits DO MATTTER! For if we as a country had cut deficit spending years ago, we might be dealing from a position of surplus or strength…. But NOOOOOOO instead we just keep adding to the National Debt, which when I checked the Debt Clock this morning it was $27.4 Trillion in the red… UGH!
For What It’s Worth… Well.. I searched yesterday for a FWIW worthy article that I could use today, and then I came across this article on the Reuters site, and it’s about how small U.S. Corporations see 2021 working out for them, and it can be found here: Majority of small U.S. businesses see worst coronavirus impact still ahead -poll | Reuters
Or, here’s your snippet: “Most small business owners in the United States believe the worst of the coronavirus pandemic is still ahead of them, with half saying their operations would permanently close within a year unless the business environment improves, the U.S. Chamber of Commerce said on Tuesday.
A new U.S. Chamber-MetLife poll of small businesses taken from Oct. 30-Nov. 10 showed that 74% of the owners said they need further government assistance to weather the pandemic. That percentage rises to 81% for minority-owned businesses.
The quarterly poll found that the 62% of small business owners fear that the worst is still to come with COVID-19’s economic impact. Only 40% said they believe their small businesses can operate indefinitely during the current business environment.
“We must ensure small businesses across the country receive the assistance they need from the federal government,” said Neil Bradley, the Chamber’s chief policy officer. “Not passing the bipartisan compromise for temporary and targeted relief risks the permanent loss of tens of thousands of small businesses, financial hardship for millions of Americans, and unnecessary delays in combating the pandemic.”
Bradley said the quarterly survey found that 14% of small businesses are currently planning to cut staff, up from 9% in July and September. Staff reduction plans are back up to the 13% level that the survey saw in April during the pandemic’s first peak, he said.”
Chuck again… You know, I’ve tried my best to keep ordering food to be delivered throughout these lockdowns, but that’s just restaurants, what about the other businesses? This has been tough for them to say the least, and we need to take the extra step to buy things from them, instead of just going to Amazon… I’m just saying…
Market Prices 12/16/20: American Style: A$ .7566, kiwi .7099, C$ .7844, euro 1.2189, sterling 1.3520, Swiss $1.1308, European Style: rand 14.8560, krone 8.6764, SEK 8.3458, forint 291.45, zloty 3.6325, koruna 21.4684, RUB 73.54, yen 103.41, sing 1.3295, HKD 7.7518, INR 73.54, China 6.5440, peso 19.89, BRL 5.1048, Dollar Index 90.22, Oil $47.61, 10-year .92%, Silver $25.17, Platinum $1,048.00, Palladium $2,376.00, and Gold… $1,860.60
That’s It for today… I’m going to have to get my laptop checked out… Every time I hit the “t” key it gives me two t’s…. And I since I type so fast, (that’s a joke!) I’m two or three words past the typo, and have to go back and correct it… What a pain! Well, I must have partied too much this past week, for I gained back 4lbs! UGH! Now I’ll have to work diligently to lose those 4lbs and more before Christmas! I won’t be able to resist all the goodies that are around at Christmas… I’ll try, but I’m a sucker for those goodies! And then I’ll get back on the wagon when I head to S. Florida… My blood sugars are continuing to go downward, and I think in about a month, they should be back to normal… Someone asked me how I was doing the other day, and I replied, “not too badly for someone who has taken chemo for 13.5 years!” Yes, that’s how long this saga has gone on… And I thank the Good Lord all the time for allowing me to be around to watch my older kids become parents, my youngest get his doctorate degree, and grandkids… I have great friends that I love sharing time with… And it also has allowed me to be married for 44 years to my beautiful bride, that I’m not supposed to talk about here! (please don’t tell her I did so!) OK… Van Morrison takes us to the finish line today with his song: Into The Mystic… I love Van Morrison’s music through the years… I hope you have a Manfred the Wonder Dog Wednesday, and Please Be Good To Yourself!
Chuck Butler