December 7, 2020
*Currencies finish last week with a rally…
* Gold & Silver try to rally back…
Good Day… And a Marvelous Monday to you! What a football game for my beloved Missouri Tigers on Saturday VS rival Arkansas! It was tough to watch until the end… Back and forth, back and forth with over 1,000 yards of total offense for the game… I was here watching it alone… So when I was screaming at the officials that it wasn’t a targeting offense on Mizzou linebacker Nick Bolton, nobody could hear me…
You know, I miss the days, where friends, and family would come together to watch our Missouri Tigers football games… Saturday night, I watched Clemson win their game and then go to the corner of the visitor’s stadium, where their fans would be sitting if they were there, and sing their fight song… College football has the best traditions, and I was glad to see Clemson continue with them…
Today is December 7th, Pearl Harbor Day… Our first day of infamy, unfortunately… Supertramp greets me this morning with their uber-great song: Hide In Your Shell…
Ok… Well, Friday was another good day for the euro, as the single unit moved upward, and passed the 1.21 level. Like I said last week, this upward move in the euro has got to be a real pain in the rear of the Eurozone officials, who are struggling with the Club Med countries once again… For new readers, I coined the phrase Club Med countries, to signify the members of the euro, who reside in the south… Italy, Greece, Portugal, Spain… These semi-socialist countries have given away the store to their citizens over the years, run up debts to their eyeballs and past them, and continue to cry about the requirements the northern countries of the euro put on them for more bailouts…
Longtime readers may recall me telling you all, years ago, about how Goldman Sachs, aka Lola, had schooled Greece on how to hide their debts, and by doing so, Greece was able to continue to borrow at the same borrowing costs as Germany… Now, someone with an ounce of sense should have been able to figure out that there was no way Greece should have the same borrowing costs of Germany, but that didn’t stop the Big Boys from selling Greek debt… to the folks that should have done their homework, but didn’t.
OK… Enough of that talk… The dollar bugs are really hiding behind the wall boards these days, afraid to come out of hiding, and quaking with fear that they are about to be relegated to behind the wall boards for a long period of time. Longtime fave economist, Stephen Roach, told his audience a couple of months ago, that the dollar was ready to be weakened by a large amount… And of course, I told you a few weeks ago, that what we could be seeing is the beginning of a new Weak dollar trend…
And the Dollar Index is at 90.99 this morning, which means that it has fallen further, as last week it was 91.30 ish at last check… There’s something brewing here folks… and it’s not coffee!
And then there was the famous Chuck talk about how all these debts these countries around the world would have to be dealt with, and the only way to deal with them these days, now that the countries have all tried to inflate them away, with no success, is to default on them… And that fiat currencies around the world would suffer, with Gold & Silver replacing them. So, what gives with all this talk about a long term weak dollar trend coming into place?
Well, I never said that these defaults would take place in the next year, or whenever, just that they would take place eventually… So, that’s not going to stop another weak dollar trend from taking place… In fact, a very weak dollar might just be what the cartel, I mean the Fed, Treasury and Gov’t are looking for… And apparently, they are going to get their wish!
The thing that you, me and the guy down the street need to know about a weak dollar trend, is that our buying power evaporates… Things will cost much more, and the companies that sell things, will do their best to downsize whatever it is you’re buying to lessen the cost… But in the end you get less, for less… and that’s a no-win deal… The loss of buying power, to me, has always been like a TAX!
But what’s a country to do when they have zero bound interest rates, negative real interest yields in their Gov’t Bonds, and a darn plandemic still hanging over our economy like the Sword of Damocles… ? They have to take whatever the markets tell them to take, and in this case it’s going to be a very weak dollar…
So… getting back to the markets from late last week… We saw something that you don’t see everyday on Thursday and Friday… Thursday Gold closed up $10.50, and Silver closed down 4.5-cents… And on Friday, Gold closed down $3.20, and Silver closed up 11-cents… So, Gold closed the week at $1,839, and Silver close the week at $24.26… While $1,839 isn’t $2,000, it is a far cry from what was going on earlier in the week, when the daily chopping of Gold’s value was going on… And now that the price engineering takedowns to get the Dec. Long contracts out of their positions so that deliver didn’t need to be made to them, from stock that wasn’t there… And that so the price manipulators could book their profits on their short positions… We can get Gold & Silver back on the rally tracks.
Speaking of short positions… Ed Steer tells me in his Saturday letter, (www.edsteergoldsilver.com) that it would take more than 160 days of Silver production to equal the ounces of Silver that have been sold short. And it would take over 90 days of Gold production to equal the ounces of Gold that have been sold short… And here’s where I have a problem that the continues to be ignored by the CFTC (commodities regulator), and that is… How can Gold or Silver that hasn’t even been pulled out of the mines yet, and who knows maybe never will be, be sold short before it is above ground?
Riddle me this Batman… Are these short trades a result of customers thinking that the metals will be worth less when they are mined? Or, are they simply used to engineer price takedowns that are used to line the pockets of the metals traders in the Casino Banks like JPMorgan?
OK, I’ve got to move on… This is a Monday, and the past 4 Mondays we saw major price takedowns in Gold & Silver… Right now in the early trading today, Gold is down $8.30… UGH! Mondays… Monday, Monday, can’t trust that day… (Mamas & Papas) And Silver is down 45-cents, and has been pushed back below $24 once again…
I talked last week about why investors should just ignore these interruptions to the Gold & Silver rally…. And then the good folks at GATA sent me this blurb that I think is important for you to read, so here you go!
“Nick Barisheff of bullion dealer and fund manager BMG Group reviews gold leasing by central banks and says they do not have the gold they claim to own. Neither do gold exchange-traded funds own the gold they claim to have, Barisheff adds.
Barisheff can’t predict when the longstanding manipulation of the gold price will end, but he says it should not discourage investing in gold, since over the longer term gold has been outperforming all assets and since U.S. treasury bonds can’t provide a safe haven when the U.S. dollar is steadily depreciating.
The manipulation will break down eventually, Barisheff says, and when it does gold investors will get a bonus.”
Chuck again… OK… The GATA folks also sent me a note highlighting a speech that James Rickards gave to the Australia’s Gold and Alternative Investments Conference, last week, where Rickards told the audience that the only course Central Banks have is to devalue their respective currencies VS Gold, and that investors should front-run the Central Banks…
That’s an interesting take on what’s going on, isn’t it? I’m just saying…
OK… I listened to another of Grant Williams and Bill Fleckenstein’s podcast series titled: The End Game… They interview different investment gurus about what they see for the End Game… And this one had the famous investor, James Rogers, as their guest… This was one of the best ones I’ve heard…
One of the ideas they discussed centered around Japan… And how the Bank of Japan (BOJ) had basically cornered the Japanese Gov’t Bond (JGB‘s) market, (sort of like the cartel, I mean the Fed has done with Treasuries) and the question arose of what would happen if the BOJ just decided to tear up all those JGB’s and say, they didn’t have to be repaid? Well, that’s just another form of default folks… And then who’s ever going to buy your Gov’t debt again?
But do I see these knuckleheads that run Central Banks doing this? Of course I do, because they never consider what happens after they ruin economies…
OK, back to reality… Let’s hope that the scenario I just described never becomes reality… Especially, here in the good ‘ole USA…
The U.S. Data Cupboard last week had some surprises in it… First and foremost, the Jobs Jamboree on Friday for the November employment figures showed that 245,000 jobs were created, which was far below the expectations of 432,000… And there were no shenanigans played by the BLS with only 6,000 jobs added, which was a far cry from their 346,000 they added out of thin air, the month before!
The Weekly Initial Jobless claims were interesting… In a 3-day, shortened Holiday week, there were 712,000 initial claims filed… 712,000 for 3 days! Just for fun, let’s average those 3 days out and then see what the number would have been for 5 days… 1,186,666… OK, I know that we probably can’t do that, but I wanted to make sure you noticed that the 712,000 were only for 3 days…
I have an article for you in the FWIW Section today about how these Claims numbers are questionable… So, stay tuned, don’t touch that dial!
We, as a country still have over 20 Million people on continuing claims… And that number has been coming down, but only because receivers of unemployment benefits run out… And then they are no longer counted as unemployed… Genius right? I mean, who on earth thought of that way of counting the Unemployed?
We also saw Factory Orders for Rocktober drop from 1.3% to 1.0%… Just wait until next month when we see the Nov. report…
This week’s Data Cupboard doesn’t have much for us, with the highlight of the week being the stupid CPI (consumer inflation) report for last month… Other than that, we have Consumer Credit (read debt) due to print this morning, and other things that aren’t quite as important the rest of the week.
To recap… It was a good week for the currencies, led by the euro, to gain VS the dollar, but the overnight markets have seen some pullback, so we’ll have to see what today brings us… Chuck is convinced that we’re in the beginning of a new weak dollar trend… Gold & Silver rallied last week after the first two days of takedowns, but are both down in the early trading this morning… It is a Monday…
And before we head to the Big Finish today, I wanted to mention that I heard on the nightly news that thieves are cutting the catalytic converters from cars and stealing them for the palladium that’s in them… Toyotas seem to have the most palladium in their Converters… Copper will be the next to get ripped out and stolen from properties, and the the price of copper has been rising… Just another Public Service Announcement for you!
For What It’s Worth… Well, longtime readers know that I don’t trust any of the employment numbers from the BLS… And now I have to question the Claims numbers each week too. According to this article that can be found here: U.S. Jobless-Claims Data to Come With Disclaimer on Accuracy (msn.com)
Or, here’s your snippet: “The closely watched weekly reports on U.S. claims for unemployment benefits will soon come with a disclaimer that the figures aren’t accurately capturing how many people are actually claiming benefits, after a government watchdog found the figures to be “flawed.”
The latest jobless-claims report said 20.5 million people were claiming benefits across all unemployment insurance programs in the week ended Nov. 7. This figure includes programs ranging from regular state unemployment insurance to special pandemic programs providing extended benefits and help for those not traditionally eligible for unemployment assistance.
But if a person files for six weeks of benefits in a given week, for example, that’s typically counted as six separate people in the total, instead of one person. The GAO report said this method of counting is normal for the Labor Department, and before the pandemic provided a good proxy for the actual number of people claiming benefits.”
Chuck again… Wait, What? They’re telling me that the numbers are flawed the wrong way? I don’t believe that one minute! I do believe that the numbers are flawed, but not the way they think they are! I’m not buying that argument one iota!
Market Prices 12/7/20: American Style: A$ .7392, kiwi .7020, C$ .7806, euro 1.2108, sterling 1.3280, Swiss $1.1221, European Style: rand 15.2388, krone 8.8070, SEK 8.4388, forint 297.17, zloty 3.6857, koruna 21.8900, RUB 74.08, yen 104.22, sing 1.3376, HKD 7.7503, INR 73.85, China 6.5306, peso 19.89, BRL 5.1547, Dollar Index 90.99, Oil $45.75, 10-year .94%, Silver $23.82, Platinum $1.021.00, Palladium $2,353.00, and Gold… $1,830.80
That’s it for today… One week down, being alone during the day, another week to go… It was a good weekend for my Missouri Tigers, who won both their football game and basketball game! This coming Saturday, will be the Braggin’ Rights Game, which used to be the hottest ticket for a game in the city… Missouri VS Illinois… I went to that game every year for about 10 years, and only saw my Tigers win a couple of those games… And now because of the plandemic, only a few thousand fans will see the game in person… UGH! I head to the wound center around noon today, hopefully this is all going to end soon… Oh! my oncologist visit last week was good… So, I have that going for me! HAHAHAHA! Time to go… Blackfoot takes us to the finish line today with his song: Highway Song… (a good long one to finish out the letter!) I hope you have a Marvelous Monday, (can’t trust that day!) and will Be Good To Yourself!
Chuck Butler