November 11, 2020
* Currencies & metals see some healing on Tues.
* But the overnight markets have ripped the band aid off the wound…
Good Day… And a Manfred the Wonder Dog Wednesday to you! That’s a mouthful to say out loud, just in case you were wondering… Well… yesterday, I was sitting outside enjoying our last day of nice weather talking on the phone to good friend, Dennis Miller, when the dark clouds began to move across the sky, and discretion being the better part of valor for me, I went inside… Upon coming inside I saw that I had an email from Dennis, and he wanted my input on an interview we would do on Paul Krugman… OK… longtime readers my recall me expressing my dislike for Mr. Krugman’s views on economics, and preferring for my own education in economics… So, this was like a layup for me! I was all over this interview like a Cheap Suit! For Those of you who subscribe to Dennis’ letter, this edition won’t run until December. And for those of you who do not subscribe to his letter…. Shame, shame, shame… in my best Gomer Pyle voice! Def Leopard greets me this morning with their song: Pour Some Sugar On Me…
That’s an interesting subject, sugar, for me…. Dennis called me yesterday, a little miffed, for leaving him high and dry yesterday, when I said I was at the facility for 4 hours and didn’t tell me what I had found out…. So, if you’re interested I’ll tell you, if you are not interested, skip ahead to the next paragraph… OK… well, my primary care doc, wanted to see me to talk about my sugar levels. It seems that since May they have skyrocketed to levels that are very dangerous… Well, it was May that I first began to take my new chemo drugs… (yes, there are two that I take at the same time)… Well, I can’t give up the chemo, so…. It was decided that I would take a drug to keep the sugar levels in check, and hopefully that along with my diet plan of no sugar that I began last month for a different reason, will do the trick, before I turn into a diabetic, which I don’t want, my doc doesn’t want, my oncologist doesn’t want, so you get the picture… Ok? Now you know… like I said it was just an Oil and Lube job…
Well…. While the healing was small, there was some healing yesterday in the currencies and metals…. Gold gained $14 on the day and closed at $1,878 and Silver gained a whopping 13-cents to clause at $24.31… After sending out the Pfennig yesterday morning, I got to thinking more and more about the engineered price takedown on Monday of Gold & Silver… They, the price manipulators, didn’t have to take Gold so low to get their bang out of the buck on their previous short positions, that they were able to buy back and lower prices, netting them a gain… But they took Gold back to the price level of Rocktober 30th… I just don’t see why it took that much of move for them to cover their previous shorts… Oh well… I can’t change anything, so let’s just move along here Chuck, for these are not the droids we’re looking for…
And it’s not the droids the government are looking for either! How this shorting more than the ounce of Gold that’s above ground, continues to be allowed, just gets me riled up…
OK… so, we had some healing, let’s hope it carries forward to today and the rest of the week… The price of Oil also is healing, and last night when I checked it, the price of Oil was $41.99… This healing in the price of Oil, which could prove to be temporary, given the calls for a new economic shutdown are getting louder, has helped the Petrol Currencies even more…. Currencies like the Norwegian krone get helped or hurt depending on which way the wind blows, with the performance of Oil and the euro… While the krone is not tied to the euro, per se, it does for the most part gain when the euro gains and lose when the euro loses… So, it has that going for it! HA!
I guess I should have checked the current prices before writing that last bit about hoping the healing can carry forward to today… Because in the overnight markets Gold has gone from a $4 gain, to a $6 loss, and the dollar bugs have ganged up on the euro again, and in the overnight markets the euro slipped back below 1.18… I read a piece on the euro yesterday, where the chartist said that the euro could fall to 1.15, if it doesn’t hold 1.17… I guess anything can happen, but I’m not buying this idea, as the pressure on the dollar right now is strong…
To show the move in the dollar overnight… Last night I checked The Dollar Index before going to bed, and it was 92.75, and this morning it is 93.09… While the Dollar Index isn’t a perfect gauge on the dollar’s movement, it’s the standard that’s used so, there you go!
Today is Veteran’s Day… And longtime readers know I’ve always put a lot of focus on Veteran’s Day… Shoot back in the day, it used to be a holiday for the World Markets Desk, but under their new owners and the fact that they are all working from home these days, it’s no longer a holiday… I’ll have something for us to think about at the absolute end of the Pfennig today, So don’t sign off until you’ve scrolled down to read it… thank you…
With today being a semi-holiday, there’s no data in the U.S. Data Cupboard today…. It’s nice to see that the Data Cupboard observes Veteran’s Day the way it should be observed! (like they had any say in it! HA!) We did have 5 different cartel, I mean Fed Heads talking yesterday… Apparently none of them had anything important to say, or else it would be all over the internet, instead, all I get is crickets…
OK… back to the currencies… I wanted to talk about the New Zealand dollar / kiwi… or better yet the Reserve Bank of New Zealand (RBNZ)…. Back in 2002, I was asked by our marketing guru, to come up with a basket of currencies from countries with Central Banks that I would deem to be “prudent”… And so I did, and called the “Prudent Bank CD”… It consisted of the euro, Aussie dollar, kiwi, and Swiss francs, (remember the ECB in the beginning was run my Wim Duisenberg, a staunch hawk if there ever was one!… Through the years the Central Banks that are associated with those currencies have all faltered… gone downhill… bit the dust… ate the cyanide… whatever, but they’ve all come in line with the Fed Reserve Bank… They print currency, they cut interest rates to zero and beyond, and that’s what brings me full circle to New Zealand… It was announced yesterday, that the RBNZ was contemplating the use and implementation of negative interest rates…. Yikes! What the hell are they thinking? I wanted to call my far away friend, Don Brash, the former Gov. of the RBNZ many years ago now, and ask him what the hell was gong on… But then I realized the only number I have for Don, is the office number from when he was the Gov. of the RBNZ…
Don is a great man, and was a great Gov. at the RBNZ, back in the day… 5 years ago, when I turned 60, my good friend, and former Big Boss, Frank Trotter, had contacted many of the people I had met through the years doing shows, giving speeches, etc. and asked them to send me birthday wishes… And, lo and behold, one of the responses with birthday greetings for me, was from Don Brash!
OK… Frank was only returning the favor to me, for I had requested emails to be sent to Frank from all his friends on his 50th Birthday, a few years ago! I know that some of you don ’t like it when I go into these talks about things long ago, so I’m sorry… but… I like them… I get to tell stories, true stories that is, and so that’s that!
To recap… There was some healing in the currencies and metals yesterday, but that little bit of healing is still a long way from correcting the engineered price take down on Monday… But, it was a start! Unfortunately the overnight markets have brought more selling… Chuck announced a new collaboration with Dennis Miller… And talks about his sugar intake change of diet, and aks the question, “what the hell is going on at the RBNZ!” and some other thing…
For What It’s Worth… Ok. I’ve laid out my thoughts to you previously about how all this debt is going to cause us to default on our debt, and all the bad things that come out of Pandora’s Box when that happens… So, I won’t go through it again… Instead, I’ll let you read an article in Reuters.com that is talking about non-Gov’t. defaults… and it can be found here: https://www.reuters.com/article/us-usa-fed-stability/u-s-still-faces-possible-default-wave-asset-declines-due-to-pandemic-fed-idUSKBN27P2T5
Or, here’s your snippet: “The United States may still face a wave of debt defaults and “significant declines” in asset prices because of the coronavirus pandemic and recession, the Federal Reserve warned on Monday, in a stark reminder the economy is far from out of the woods.
“As many households continue to struggle, loan defaults may rise, leading to material losses” for lenders, the Fed said in its latest biannual Financial Stability Report. Business debt “has risen sharply as businesses increased borrowing to weather the period of weak earnings. The general decline in revenues associated with the severe reduction in economic activity has weakened the ability of businesses to services these obligations.”
Asset prices “remain vulnerable to significant declines should investor risk sentiment fall or the economic recovery weaken.”
The comments were issued on a day when U.S. stock markets surged on news that a coronavirus vaccine may be on the horizon — a possible boon to businesses and households globally.
“So far, strains in the business and household sectors have been mitigated by significant government lending and relief programs and by low interest rates,” the Fed said on Monday.
But that could change depending on the course of the pandemic and the course of the recovery.”
Chuck again… Yes, a short one today, after yesterday’s long FWIW snippet! Do you know what I see going on here? The stock market rejoiced this week on the news of a virus vaccine, because that would mean economic growth to return… But, didn’t the Fed tell us a month ago, that they didn’t see the economy growing again for a couple of years, so they were keeping interest rates near zero? So, you can’t have both things…. Economic growth would bring inflation, and inflation brings rising interest rates… So, we’ll have to see which one wins…. I personally think the virus is going to remain with us for some time… But it doesn’t mean I agree with the Fed on interest rates!
Market prices 11/11/20: American Style: A$ .7276, kiwi .6874, C$ .7658, euro 1.1770, sterling 1.3234, Swiss $1.0905, European Style: rand 15.6484, krone 9.0739, SEK 8.6457, forint 302.25, zloty 3.8113, koruna 22.4746, RUB 76.43, yen 105.40, sing 1.3493, HKD 7.7535, INR 74.31, China 6.6121, peso 20.40, BRL 6.3846, Dollar Index 93.09, Oil $42.52, 10-year .96%, Silver $24.24, Platinum $880.00, Palladium $2,487.00, and Gold… $1,872.10
That’s it for today… Don’t forget I’ve got my salute to Veterans following this ending… Longtime readers will recall me telling them that my dad was a WWII Veteran…. When I was a young man I wanted to be just like my dad, and sign up for the war (Vietnam war then) and he sat me down and told me that I had no idea what the horrors of war were, and went on to explain them to me, until I was almost sick to my stomach… I then began to protest the war! But not the warriors! I was eligible for the birthday lottery draft one year… my birthday wasn’t called until #280 (I think) so I was not eligible to be drafted, and then the war ended the next year… I have another story about how I came about getting my draft card, if you’re ever around me and want to hear it… OK, so don’t forget to salute or say thank you to a Veteran today, well every day it should be, but today especially! And with that, Graham Nash takes us to the finish line today with his appropriately titled song: Military Madness… (Military Madness is killing my country, so much sadness comes over me)… I hope you have a Manfred the Wonder Dog Wednesday, and please, please, please, Be Good To Yourself!
When you see someone in a uniform,
Someone who serves us all,
Doing military duty,
Answering their country’s call,
Take a moment to thank them
For protecting what you hold dear;
Tell them you are proud of them;
Make it very clear.
Just tap them on the shoulder,
Give a smile, and say,
“Thanks for what you’re doing
To keep us safe in the USA!”
~By Joanna Fuchs
There are many tributes to veterans that can be given, and all should be read or heard…
Have a great day!