April 19, 2021
* What’s it gonna be boy, inflation or deflation?
* Gold & Silver move higher once again..
Good day… And a Marvelous Monday to you… Not a great weekend for St. Louis sports teams. The Cardinals lost 2 of 3 to the Phillies, and the Blues blew a 2 goal lead to lose Saturday night. The Blues are now out of the playoffs, but 13 games remain, so they need to lace up the skates, and get to work! The weather here turned chilly, and I received a freeze warning for Tuesday night here… Crazy April weather! Back in the day… I was appointed by the football coach to go with a couple of my teammates and attend a banquet and accept our trophy for winning the PHL football Championship the previous fall… It was April and it snowed a few inches, that night, making the drive home a little treacherous given I was driving my dad’s station wagon that night! Just a prelude for what I would experience living in Des Moines, Iowa a few winters later! Blind Faith greets me this morning with their rock classic song: Can’t Find My Way Home… ( I love this song!)
Well… how was your weekend? The highlight of my weekend was that little Evie and brother Braden came to stay with us Saturday night… She’s 18 months old now, and she bring me books to read to her, so darn cute! Longtime readers will recall me carrying on about my first grandchild, Delaney Grace back in the day… Love them all to pieces! Ok… I know, I know, I seem to beating around the bush before taking on today’s letter… So, I guess there’s nothing else I can ditter about… So, here goes!
The Currencies put in a good week last week, ending the week on a a strong note, and pushing the dollar bugs back to the wall boards they crawled out of… The Dollar Index began the week, last Monday at 92.02, and ended the week at 91.55… And since the euro is the most heavily weighted currency in the Dollar Index, the euro was the main mover during the last half of the week, and ended the week getting even closer to the 1.20 level… The Aussie dollar (A$) and kiwi, aka the antipodeans, had very good week, along with the Petrol Currencies.
Gold & Silver also got on board with the kicking sand in the face of the dollar bugs. Gold started last week at 1,744.20 and ended the week at $1,777.50, up $12.90 on Friday… But that’s only half the story regarding Friday’s upward movement… About halfway through the day, Gold was flying high and appeared it could breach 1,800, and then the rug was puled out from the shiny metal, as the price manipulators showed up at the COMEX with arms full of short Gold paper trades…
The same held true for Silver… Silver started the week at $25.27, and ended the week at $26.50, up just 13-cents on the day, but as I said above, was knocked down at the end of the day, by the price manipulators…
I think this is good place to remind you dear readers that I’ll be appearing along with my publishers, Mary Anne and Pamela Aden, and Gold guru Omar Ayales this Thursday April 22nd, at 4:30 pm EDT, and it will be virtual, so here’s link for you to sign up to view it: https://online.moneyshow.com/2021/April/money-metals-and-mining-virtual-expo/registration/?scode=052516
This will be a Big Deal for yours truly, because I’ve not been a speaker for 5 years now… I’m wondering if I still “have it”…
In the overnight markets…. the dollar has been led to the woodshed, and we start the week with the Dollar Index at 91.10, almost 100 bps from where we started last week! The euro has pushed higher into the 1.20 handle, and it’s as though there’s no stopping the A$ and kiwi from moving higher these days… Gold & Silver are basically flat in the early trading today with Gold up $2 and Silver 4-cents…
OK… So, everybody’s talking about whether we are going to see inflation or deflation will continue… There are so many things like shipping prices have gone up 50%, and World Food Prices have gone up 10%, rising for the 3rd consecutive month in March… that point to inflation, but then there’s the lack of wage inflation, and some other things that balance out the argument either yay or nay… The thing that I keep in the back of my mind on this argument is what I talked about in the February 11, Pfennig, let’s listen in : (systemic inflation) is that the economy cools down. Fake money, false price signals, regulation, bubbles, giveaways, and COVID-19 shutdowns could simply cause a cutback in buyable output… while the supply of available money continues to rise.
So that would throw out the need for wage inflation, but in the end, inflation is what the Fed wants, and the Gov’t needs to reduce the value of the dollar by inflation, to pay back debts with weaker dollars… making $20 bills, $5 bills… So, by nook, crook and cranny, the Fed will get what they want and the Gov’t needs, eventually… And while 2021 might just be building blocks for the coming inflation, that will hit our shores in earnest in 2022…
Oh, and one more thing… don’t look now but Copper has really jumped higher and is trading at $4.31 this morning, indicating that inflation is all around us…
Ok… above I talked about the price manipulators, and the this weekend I received this email from the good folks at GATA, that I’m going to give you a snippet of here, so this is from GATA and here goes:
“Chris Marcus of Arcadia Economics has assembled a compelling list of questions about what seems like the indifference of the U.S. Commodity Futures Trading Commission to misconduct and manipulation in the silver market, which the commission is supposed to regulate.
Marcus is undertaking to raise $100,000 via GoFundMe.com to be donated to a charitable cause if the commission answers his questions, or possibly to be used to sue the commission if it refuses to answer.
Of course the CFTC isn’t likely to answer any important questions about misconduct and manipulation in the monetary metals market, in light o f the overarching question it has repeatedly refused to answer for GATA and for U.S. Rep. Alex X. Mooney, R-West Virginia:
That is, does the commission have jurisdiction over manipulative trading undertaken by or at the behest of the U.S. government or governments trading with the approval of the U.S. government?
Indeed, the architecture for manipulative trading for or with the authorization of the U.S. government long has been in place in plain view, just not widely understood. They are:
— The U.S. Treasury Department’s Exchange Stabilization Fund, which is authorized to manipulate and rig not only all markets in the United States but all markets in the world, quite without the approval of the governments with direct responsibility for those markets:”
Chuck Again… That sounds promising doesn’t it? But don’t expect any miracles here, like the CFTC fessing up or even answers the challenge… I think that the CFTC will ignore it, just like they have all other attempts to come clean. But to me this tells us more if they don’t fess up… It tells me that they are hiding something BIG…
OK… countries all over the world, sans Russia, and Singapore, are experiencing the same problems as the U.S. too much debt… And all of them are looking for ways to inflate their economies to lessen the pain of the debts they have accumulated, with more on the way probably! The Reserve Bank of Australia came out and said something about leaving interest rates unchanged until wages begin to rise… I’m sure that’s the mantra for most of the Central Banks of the World…
The problem with wages is that they haven’t been a strong component of inflation since the 60’s… What makes anyone think that they will suddenly become a major player in inflation again? The U.S. has a real problem right now… There are probably 90 Million people that don’t want to work any longer, they get unending unemployment benefits, while receiving a bonus stimmy check about every 3-5 months… There’s no push to work any longer and that will keep wages under wraps for some time to come… I’m just saying…
But, as I always say… The U.S. is supposed to be better than the other countries of the world, because they are the caretakers of the reserve currency of the world… Instead of being better than the other countries, for the most part they are worst, debt wise…
Speaking of debt… Publishing guru, and best selling author, Bill Bonner, had this little tidbit about our debt, and I’ll let Bill take it from here: “In March 2021, the feds collected some $267 billion in tax receipts. But they spent $927 billion – a new record. And a record monthly deficit of $660 billion, approximately equal to the entire U.S. annual budget during the Ronald Reagan administration.
Not only do income and outgo not match… they’re never going to get together.
Losing money at this rate implies a loss for the year of about $8 trillion… More likely, March was an outlier, and the loss will be “only” about $3-$4 trillion, still far more than can plausibly be borrowed.
And this is on top of other big numbers that don’t add up, either.” Bill Bonner… www.rogueeconomics.com
The U.S. Data Cupboard last week has a couple of surprises for us… First off the weekly Initial Jobless Claims fell to 576,000 the previous week, and were being hailed as a sign the economy is roaring again, but… did these spin doctors stop to think that the previous week was a day short because of Easter Monday in many locations? I’m just saying… Then we had a Big number from Retail Sales for March as they rose 9.8% VS the -2.7% in Feb… That’s a big turnaround, but then we, as consumers did begin to get our stimmy checks in March now didn’t we? What will be the follow up here? I’m thinking it won’t be anywhere near 9.8%! Then Industrial Production for March was up 1.4%, but that didn’t meet expectations, nor did it reverse Feb’s -2.6%… And Capital Utilization (CAPU), rose to 74.3 from 73.4. Recall last week I questioned the call for a rise to 75.5?
And that was all last week’s late week data… But this week’s data is a non-event, at least for the first 3 days this week, there are no data prints, none, nada, nil, zilch, a big fat goose egg! So… until we get to Thursday this week, which by the way won’t be a Pfennig day, we won’t see any data…
To Recap… The Currencies and metals had good performances last week… And in the overnight markets there was more dollar selling, with the Dollar Index falling to 91.10. Chuck talks about the argument between the inflationists, and the deflationists and gives points of view from both sides… He also talks about debt in the countries around the world, and Bill Bonner adds his 2-cents! There is also the price manipulation talk that just continues on and on and on and on…
For What It’s Worth… I first saw this article this weekend in a GATA release… Then, I saw it highlighted in Ed Steer’s letter this weekend, and then when I was reading the latest edition of Grant Williams’ Things That Make You Go Hmmm, he had highlighted it, and I knew then that I had to use it today in the FWIW… It’s an article about how China’s economy has recovered and is importing Gold again, and this should all be good for Gold, and it can be found here: Exclusive: China opens its borders to billions of dollars of gold imports – sources (yahoo.com)
Or, here’s your snippet: “China has given domestic and international banks permission to import large amounts of gold into the country, five sources familiar with the matter said, potentially helping to support global gold prices after months of declines.
China is the world’s biggest gold consumer, gobbling up hundreds of tonnes of the precious metal worth tens of billions of dollars each year, but its imports plunged as the coronavirus spread and local demand dried up.
With China’s economy rebounding strongly since the second half of last year, demand for gold jewellery, bars and coins has recovered, driving domestic prices above global benchmark rates and making it profitable to import bullion.
The local premium is now about $7 to $9 an ounce, according to gold traders in Asia, and would probably have increased further if more imports to satisfy demand had not been allowed.
About 150 tonnes of gold worth $8.5 billion at current prices is likely to be shipped following the green light from Beijing, four sources said. Two said the gold would be shipped in April and two said it would arrive over April and May.
The bulk of China’s gold imports typically comes from Australia, South Africa and Switzerland.”
Chuck again… Gold can use any help it can get to get back firmly on the rally tracks! But I want to point out that this could go a long way toward what I described China doing with all their Gold, many years ago… And that is to issue a Gold backed currency… I’m just saying…
Market Prices 4/19/2021: American Style: A$ .7772, kiwi .7187, C$.8005, euro 1.2035, sterling 1.3935, Swiss $1.0944, European Style: rand 14.2279, krone 8.2863, SEK 8.3885, forint 299.25, zloty 3.7760, koruna 21.5195, RUB 75.58, yen 108.15, sing 1.3305, HKD 7.7666, INR 74.84, China 6.5193, peso 19.84, BRL 5.5865, Dollar Index 91.10, Oil $62.98, 10-year 1.58%, Silver $26.09, Platinum $1,214.00, Palladium $2,889.00, Copper 4.31, and Gold $1,779.10
That’s it for today… Quite wordy today, but it’s been a few days without a Pfennig, so there was some catching up to do! So… as I told you last week, I now have two Dr. Appts. This week… So, no Pfennig tomorrow, and then I’ll be back on Wednesday, and then no Pfennig on Thursday… So, in other words, a short week for Pfennigs… Thursday is my visit to my oncologist whom I’ve not seen for 4 months, should be an interesting visit… I can and can’t believe the weather is going to be cold this week… If I didn’t have these Dr. Appts. This week I would be on a plane back to Florida, where it was 90 on Saturday! It was so chilly here that there was no driveway Happy Hour last Friday! And this Friday there won’t be one either, unless the weather takes a U-Turn! My beloved Cardinals now head to the Capital to play 3 games before returning home. I just don’t get how they can score 9 runs one day, and get shut out on 2 hits the next game… UGH! That’s 3 times in the past week they were shut out! Double UGH! The Hooters takes us to the finish line today, with this 80’s hit song: All You Zombies… “All you zombies hide your faces, all you people in the street”… I hope you have a Marvelous Monday today, and will BE Good To Yourselves! (talk to you Wednesday)
Chuck Butler