May 15, 2019
* Dollar returns to the head of the class on Tuesday…
* Eurozone receives some good 1st QTR GDP, but the euro can’t find a bid…
Good Day… And a Wonderful Wednesday to you! My beloved Cardinals opened up in Hot-lanta last night with a convincing win, which is a good way to start a road trip! They’ve scored lots of runs in the opening games of the last two series, with this now making 3, and then in the previous 2 series, they put away their bats, thinking their job was done… Unfortunately, it wasn’t… I told you yesterday, that the stock jockeys didn’t need to worry that the PPT would be there yesterday to save them, and that’s exactly, what, in my mind, happened… Consumer debt is rising again… This and more to talk about today… Peter Gabriel greets me this morning with his song: In Your Eyes…
Well, our nothing day on Monday turned to a dollar bounces back on Tuesday… Turnaround Tuesday, I guess… Why would the dollar bounce back, when it got sold on the Trade War news of Friday? Sell the fact, and buy the rumor? Or… did the PPT help out here too? Now, I have you wondering if what I’m saying is all making sense, right? The Aussie dollar (A$) was the worst performing currency of the day as the pain in China is causing a pain in the A$… The rain in Spain is mainly on the plain… Stuff like that!
This morning, earlier, the Eurozone printed their 1st QTR GDP, which was better than expectations at 0.4% for the QTR, and 1.2% year on year, which is exactly where it stood in the 4th QTR of 2018… So, no increase in growth, but…. no weakness either, which is what everyone and their brother was looking for… But still the euro can’t find a bid this morning, and is well below the 1.12 figure… again!
I do believe that the euro is getting caught in the crosshairs of the Trade War between the U.S. and China… I hope it can shake its way out of those crosshairs soon, before things get ugly…
Speaking of China… The posted their recent Retail Sales and Industrial Production for April both showed weakness already… The renminbi continues to post weaker levels just about daily now, and all the euphoria that used to hang out over China, has now moved on, and black clouds have taken the place of euphoria here… Is it time for China to begin to use some of their reserves to stimulate the markets like they have done in the past when things got dark?
I’m going to spend some time this morning talking about consumer debt… So… if you don’t want to hear it, too bad! HA! No, seriously, if you don’t want to hear it, then skip ahead… OK, all that want to hear what I have to say about consumer debt are here, that want to be here, so let’s go!
The Center for Microeconomic Data put out their latest report on Consumer Debt… And to start this off I’ll let them tell you the results… it WAS their report after all! “The CMD’s latest Quarterly Report on Household Debt and Credit reveals that total household debt rose by $124 billion to reach $13.67 trillion in the first quarter of 2019—an increase of 0.9 percent, compared to a rise of 0.2 percent in the fourth quarter of 2018. This past quarter, balances climbed by 1.3 percent on mortgages, 0.5 percent on auto loans, and 2.0 percent on student loans, while total credit card balances fell by 2.5 percent.”
And now Chuck’s viewpoint on this… We, as a country now have more consumer debt than what was on the books prior to the financial meltdown in 2007/08… Wait! What? Yes, that’s right! Remember when consumers said, We’ve learned our lesson, and we’re going to cut back our deficit spending? Well, they did that for about a year, and then the spending more than we make began to build again, and now, like I said, the consumer debt totals more now than in 2007/08… Here’s the difference between Consumer Debt and Gov’t Debt folks… Gov’t debt can be defaulted on, and Consumer Debt while it can be defaulted on, can’t be washed off the books without someone going to debtors’ jail… Well, at least that’s the way it used to be, we problably have changed all that because we wouldn’t want to hurt someone’s feelings by making a public spectacle of them… So, here’s a cookie, and a gold star, for “trying to pay off your debts”….
And it’s not just housing related debt… The report also showed that: Non-housing balances increased by $10 billion in the first quarter, with a $6 billion increase in auto loan balances and a $29 billion increase in student loan balances. Credit Card balances at least narrowed in the quarter!
There’s no way this all turns out peachy folks… There’s just no way… Sooner or later the bill collector is coming to the door… And he won’t take “go away” for an answer… The repo guys will come for the car, and when you’re away from home, they’ll come for that big screen tv, all the Alexa’s and dots you have and other things…
OK, that’s all I’m going to say about that today… Gold couldn’t take that next step to trade past $1,300 yesterday, and fell back by $4 on the day… And the price of Oil rebounded when it was reported that drones had attacked gas outlets in Saudi Arabia… Now, who would do something like that? Hmmm…. Well, I guess you have to figure out who in the world has the capability to direct drones to do something like that… Hmmm… That’s all I have to say about that!
And right when the price of Oil was ready to make a big move forward, once again out came the supplies report from the U.S. that put the road block on Oil’s move forward! Funny, not funny ha-ha, that the last two times the price of Oil began to more forward, the supplies report seems to show up… Oh well, it is what it is…
Yesterday, I mentioned my trip to the dark alley, where I checked on the status of the Gov’t demanding holders of IRA’s and 401k’s to own nothing but Treasuries… And here’s what my good friend Dennis Miller, the Retirementor, who’s also now going though chemo and radiation, and can be found at www.milleronthemoney.com… Had to say about that: “If the government forces people to put treasuries in their retirement accounts, it will be followed by the greatest theft of wealth in human history. Once the money is in, all it takes is another five year period like the Carter years and the value of their nest egg will drop by 60%.
Savvy investors would probably cash out their IRA’s to avoid that.”
Yes, I agree… I actually know some people that closed out their IRA’s took the tax hit, when this was first talked about years ago… And then it was just talk, as it is now, but imagine if you will if talk becomes reality… YIKES!
OK, let’s talk about something else…
The U.S. Data Cupboard finally gets some real economic data prints to show us today… Every channel I turn to (just for grins) has a talking head telling me that the U.S. economy is strong and robust… Well, I wonder what they’ll say when they see today’s data prints… I fully expect April Retail Sales to be weak and disappointing, and I fully expect Industrial production in April to be negative… But if these prints do show the weakness I expect, it won’t be discussed at all… Like water off a duck’s back…
To recap… Our nothing day on Monday, switched to a turnaround Tuesday for the dollar, and all the currencies’ gains from Friday, have been reversed… UGH! Consumer Debt is soaring once again, and Chuck says it won’t turn out peachy… The Eurozone 1st QTR GDP was bang on the same figure as the 4th QTR 2018, which means all the gloom and doom that was expected for the Eurozone isn’t happening, yet, that is…
For What It’s Worth… this will look different this morning but, hey! Just go with it! HAH!
Well, I mentioned this a couple of weeks ago, that Bart Chilton, the former CFTC regulator had died, but before he did, he gave an interview in which he said that the CFTC had told JPMorgan to cease their short silver operations, but that JPMorgan had ignored them. Well, the GATA folks sent me a link to an interview with Ed Steer where he talks about this new found information regarding price manipulation… here’s what the GATA folks said: “GATA Board of Directors member Ed Steer, editor of Ed Steer’s Gold & Silver Digest letter, was interviewed the other day by James Anderson for Silver Doctors. They discussed former U.S. Commodity Futures Trading Commission member Bart Chilton’s confirmation that the commission allowed JPMorganChase to manipulate the silver market. They also discussed the use of derivatives by central banks and their agents to control commodity prices.
The interview is 20 minutes long and can be heard at Silver Doctors here:
https://www.silverdoctors.com/headlines/world-news/ed-steer-gold-silver-…
Chuck again… I hope you get the opportunity to listen to this interview… All those naysayers out there that continue to say that the Gov’t has nothing to do with price manipulation of Gold & Silver have to be feeling a bit less confident right now… As this revelation ties to my theory that yes, the regulators know that JP Morgan et al, are manipulating the prices of Gold & Silver, but they have the wink and nod from the Gov’t that they will not be persecuted… Bart Chilton was telling us that in so many words, when he said that the CFTC told JPMorgan to cease their shorting operations, and they ignored the CFTC…
Currencies today 5/15/19 American Style: A$.6917, kiwi .6553, C$ .7420, euro 1.1180, sterling 1.2880, Swiss $.9918, European Style: rand 14.2778, krone 8.7583, SEK 9.6316, forint 290.73, zloty 3.8540, koruna 23.0450, RUB 65.13, yen 109.31, sing 1.3695, HKD 7.8495, INR 70.40, China 6.8759, peso 19.20, BRL 3.9828, Dollar Index 97.64, Oil $61.11, 10-year 2.37%, Silver $14.81, Platinum $851.61, Palladium $1,318.04, and Gold… $1,298.32
That’s it for today… The Las Vegas Money Show is going on this week… Chris sent me a text last night with a picture from the show, telling me that people keep asking about me… Well, that’s nice isn’t it? To have made an impression on strangers, that 2 years after I’m gone, they keep asking about me? I’m very proud of myself this morning… Don’t let that go to your head, Chuck! HA! Our Blues get back on the ice tonight, but this time they’ll be on home ice… Let’s Go Blues! So, hockey and baseball on at the same time tonight… Get the TV out of Alex’s room to make this happen! Earth, Wind and Fire takes us to the finish line today with their song: After The Loving Is Gone… I hope you have a wonderful Wednesday, and continue to Be Good To Yourself!
Chuck Butler