April 9, 2020
* Currencies are flat for the most part on Wednesday
* Gold was flat too, but is up $15 in the early trading this morning!
Good Day… And a Tub Thumpin’ Thursday to you! Brother was it hot here yesterday…. A record temp of 91 was the high on the day… And then a cold front moved through last night, and we’ll be lucky to hit 60 today…. But boy did that 90 degrees feel good on my bones…. The problem was that you can only sit out for so long…. I was reading a book outside, and when it got tooI hot, I went inside, sat down in my recliner, and fell asleep! When I awoke, Kathy has turned the A/C on, and I was freezing! I have to give kudos to my wife, she’s been busy making masks, for medical workers, or just people that feel better having them on while around other people…. That and we had the cover removed from our pool (the earliest in the year we’ve ever done that!) and it’ll take a few days for it to be clean to swim in… By then the temps will be back to chilly…. UGH!… Oh well, we’ll be ready when the warm weather turns hot! The Rolling Stones greet me this morning with their song: Bitch, one of my faves by them!
OK… Well, the currencies just drifted along for the most part yesterday…. There is one currency though that is defying the odds and rallying lately, and that is the Aussie dollar (A$)…. A couple of weeks ago the A$ was trading with a 59-cent handle and looking to get weaker, but then China printed that, questionable at best in my opinion, stronger than expected PMI, and suddenly, traders changed their sentiment toward A$’s…. This morning the A$ is well into the 62-cent handle… So bully for the A$!
The Russian ruble has turned around too…. But is still very cheap given their strong fundamentals… There aren’t too many currencies, right now, that I can say that about!
Gold was pretty much flat on the day…. Which seems strange, given all the unknowns out there…. But Every time I go to Twitter or YOUTUBE you don’t have to look for too long before finding an article or video by someone touting the prospects for Gold…. If everyone would stop talking about it and put up some cash to buy it, the Gold price would be better off!…. My dad used to say to me, “Chuck, money talks, and Bull sh*** walks”…. I truly believe that statement and have always thought about it when things like this arise….
And Gold which drifted at best yesterday, down a buck or two on the day is up $15 in the early morning trading…. so this could be a good day for the shiny metal, eh?
OK…. I have no idea what’s going on here, but…. I keep getting questions in the PRB asking me the best way to buy physical Gold…. Really? Where have you been? Ok, so you missed class the other 12 times I wrote about this? This won’t be the last time, but…. It should be!
The best affordable, convenient way to buy and hold physical Gold or Silver, is in what’s called an “non-allocated account” or Pooled Gold/ Silver…. I suggest that you call Tim Smith @1-800-926-4922, tell him I told you to call, and he or any of his compadres will explain the product, how to open an account, what the costs are, etc. So, please write down that phone number in case you decide at a later date to buy some Gold / Silver!
And again…. I do this for you out of the goodness of my heart…. I’m not paid one wooden nickel for recommending this program or Tim…. So, where else do you get free newsletter with free recommendations? Only here, at the home of A Pfennig For Your Thoughts!
I had someone write me yesterday, ask me why I never talked about cryptocurrency…. Oh brother! Another person that missed class! Basically, cryptocurrency is not a “currency” it’s a device to control you, period! When your life savings can be stolen from your laptop where your cryptocurrency is stored, I don’t see that as something that we need…. Besides, all these cryptocurrencies, like Bitcoin, will not be around in the future, because I truly believe the Gov’t will be issuing their own digital currency in the future…. I first wrote about this in the Currency Capitalist, and then again in the Dow Theory Letters, and of course here…. My good friend Dennis Miller and collaborated on an article regarding this cashless society, that’s coming to a theater near you, soon! You won’t want to miss it, and in case you think you did, check out: www.milleronthemoney.com
I had a message come my way last night from a dear reader that wanted to know what would keep Mr. Trump from pulling an FDR and confiscating individual’s Gold? Well, besides people marching on Washington D.C. with pitchforks and shovels… I guess it could be done…. But the main difference between then and now, is that the U.S. needed the Gold to print more debt/ dollars…. These days the Fed just fires up the IMAC and voila, more dollars and debt are created!
The thing I think the countries of the world that hold their physical Gold here in the U.S. should be worried about is this….. What if, the price reset in Gold is made and the U.S. decides to confiscate all the foreign Gold and make it their own? Now, that’s something to worry about, if I’m Germany, and France, and whomever else has Gold stored here…. The U.S. could say that they were taking the Gold reserves over, and unless you want to go to war with us, you can’t do a thing about it!
Now there’s some food for though, eh? I’m sure there’s a lawyer out there that will give me 10 reasons why that can’t happen, and I’ll just respond…. “possession is 90% of the law”, neener, neener, neener….
And I’m sure there were lawyers back in the days of FDR that told him of the 10 reasons why he couldn’t confiscate people’s Gold…. Did that stop him? Would it stop Trump? Or whomever is the President at the time….
The Central Bank measures just keep coming folks…. Earlier this week the Reserve Bank of New Zealand (RBNZ) introduced a new financial measure to buy bad loans…. Remember a week or so ago, when I told you that the RBNZ Gov. had said that the New Zealand economy was strong? Really, now…. But then your Central Bank the one you run, keeps coming out with new measures that wouldn’t be needed if the economy was really…. Strong! Hey, I was born in spring, just not this last spring!
OK… I watch a video last night sent to me by a longtime reader, Linda, and asked me to give her my thoughts on it…. Basically it was a woman who used to be in the White House, (Catherine Fitts) talking about how this current virus is what she calls a “Plandemic” She talks about how at the end of 2019, all we were hearing about were the dollar destabilization crowd, talking about the ending of the dollar as the reserve currency, and then a month later,, everyone has forgotten about that, and instead have a “plandemic” to deal with…. Do you believe in coincidences? I don’t… but sometimes things can get very eerily close, right? Now, I’m not saying this is for real, what I’m saying is things are just too eerily close right now….
Then I watched a video interview with Doug Casey…. Now everyone knows Doug Casey, right? In San Diego a few years ago, I sat on a patio puffing on cigars with Doug, talking about the world…. Well, last night Doug went out of his way to say that he absolutely was shocked at the reaction of world leaders to this virus…. He, like me, questions the shutting down of the economy, and how the reaction to this is going to cause a great depression…. Now, for the most part, through the years, when Doug Casey talks, people listen…. I sure hope the Gov’t is listening to him now….
The U.S. Data Cupboard yesterday, finally printed the Feb. Consumer Credit (read debt), and it soared in Feb from $12Billion in January (you know the month when people get their credit card bills for their Christmas expenditures and pay them down) to $22 Billion in February! WOW!…. OK, just like all the other data from this time, it was before the COVID-19 virus hit our shores, and can you imagine how much this will shrink in March?
Someone asked me the other day about my call that we’re going to see soring inflation in the near future….. Well… basically I see the Fed printing dollars by the truck load, cutting rates to zero, and probably to negative soon enough, I see so many dollars chasing so few goods, since the economy has been shut down, And a Central Bank that not only needs but wants higher inflation in the worst way…. They need inflation to help with the debt, folks. It’s beyond unsustainable, in my opinion…
So, there you have it…. But what I failed to tell you is that first we’re going to see a short-lived bout of deflation, which will send the Fed Heads reeling and wanting to cut rates even more…. And that’s when the inflation spiral begins….
But will the Fed be in any position at that time to slow down the spiraling inflation? No! All they have is to shut off the money supply spigot, and hike rates…. And doing that at this time would be akin to throwing gas on a fire in hopes of putting it out!
This has been a week of dull, sometimes non-existent, economic data from the Data Cupboard, and today just doesn’t change that one iota! We will see the Producer Price Index (PPI) (wholesale inflation) for March, which will be negative, I’m sure, and the Consumer Sentiment for the first week of this month, which won’t be good, you can bet your sweet bippie on that!
And we end this dull week for data with the stupid CPI (consumer inflation) for March, tomorrow… What a “nothing” week for data! Oh, that’s right we had the Fed’s FOMC Meeting Minutes yesterday, and I have those for you in the FWIW section today! Man, this guy that writes this letter just keeps giving people food for thought! HA!
To recap…. The currencies were pretty flat yesterday, with the A$ and rubles the only currencies with some real attention… Gold was also flat to down a buck or two yesterday, but is up $15 this morning…. Chuck has really been fielding the questions in the PRB here in the Pfennig so everyone can read what his thoughts are…. And today we talk about Gold confiscation, who should be worrying, and spoiler alert, it’s not U.S. citizens!
And before I head to the Big Finish today…. I have this for you….Well…. I thought this line from a dear reader yesterday was very funny…. He said, “after this quarantine is over, ½ of the people will be excellent cooks, and the other ½ will have a drinking problem” HAHAHAHAHAHAHA….. Yes, I’ve noticed that I continue to have my 4 o’clock Happy Hour that started when I was down in Florida, and I would go out on the deck for some late afternoon sun, watch the ocean, and have a cold one…. I now go outside for late afternoon sun, watch the pool water, and have a cold one! Some things never change…. HA!
For What It’s Worth…. Ok, I gave you a strong hint above as to what’s in today’s FWIW section…. It’s a recap of the Fed’s FOMC Meeting Minutes from my friends at MarketWatch…. and it can be found here: https://www.marketwatch.com/story/the-fed-staffs-worst-case-scenario-no-recovery-until-next-year-2020-04-08
Or, here’s your snippet: “The Federal Reserve staff’s worst-case scenario for the economy is no recovery until next year, according to minutes of the central bank’s two policy meetings in early March, released Wednesday.
The staff economists told officials that there were two plausible scenarios for the U.S. economy grappling with the coronavirus outbreak. In one scenario, the U.S. economy would start to recover in the second half of the year. The more adverse scenario was an economic recovery “much slower to take hold and not materially under way until next year.” Under both scenarios, inflation moves lower.
Facing this uncertainty, Fed officials responded by slashing interest rates to zero and launching open-ended purchases of Treasury and asset-backed securities. Supporters of the full percentage-point cut on March 15 called it “forceful.” It brought the Fed funds rate to a range of 0% to 0.25% because the Fed had already cut rates by a half-point on March 3.
In the March 15 meeting, a “few” officials wanted to cut rates only by a smaller half-point, the minutes show. Cleveland Fed President Loretta Mester eventually voted against the decision for the larger cut.
During the discussion of the cut, several officials said they were worried the public would think the central bank would be out of ammunition with its benchmark rate essentially at zero. But some officials told their colleagues the Fed had other tools — using forward guidance or the Fed’s balance sheet — to ease monetary policy further. There was also a concern that the action might foster investor expectations of negative policy rates.”
Chuck again…. Really? Well, I’m going to throw my hat into the ring that says the recover doesn’t come until next year, but I’m not buying the low inflation thing….
Currencies today 4/9/20 American Style: A$.6231, kiwi .6005, C$ .7125, euro 1.0861, sterling 1.2421, Swiss $1.0295, European Style: rand 18.0438, krone 10.2572, SEK 10.0705, forint 326.12, zloty 4.1852, koruna 24.7468, RUB 75.36, yen 108.85, sing 1.4338, HKD 7.7528, INR 75.86, China 7.0605, peso 23.83, BRL 5.1935, Dollar Index 100.10, Oil $27.31, 10-year .73%, Silver $15.19, Platinum $735.85, Palladium $2,184.48, and Gold… $1,660.99
That’s it for today and this week…. Tomorrow is Good Friday, and Sunday is Easter, for those of us who celebrate that…. The Greeks celebrate Easter a week later… This will be an Easter that will be like no other that came before this year… I’ll miss stealing some chocolate candy from the kids’ Easter baskets! Saturday marks two weeks since we came home, we self quarantined because of our drive back and the stay in the hotel in Paducah…. I’m still here! My new chemo gets delivered to me today…. This has been a real fight for me and the young lady in the prescriptions dept. of my oncologist’s office…. Part of the problem was that there was no one in office at the Pharmacy to make a call! Well, anyway, I get to stop partying like it’s 1999 tomorrow, when I take the first dose…. UGH! OK the Stealers Wheel takes us to the finish line today with their song: Stuck In The Middle With You….. Clowns to the left of me, jokers to the right…. Here I am, stuck in the middle with you! I hope you have a Tub Thumpin’ Thursday today, and a very blessed Easter on Sunday, should that be your bag…. Please Be Good To Yourself!