May 14, 2019
*Currencies get stuck in the mud, and don’t move on Monday…
* Chuck gets a call from the Fed Chairman! (not really..)
Good day… And a Tom Terrific Tuesday to you! Oh what a night! All of St. Louis’ attention was on their Blues hockey game in San Jose, as the Cardinals were traveling to Atlanta… It was “one of those days” for me yesterday… Every now and then, all the cancer drugs sneak up on me, and all I want to do all day is sleep… And sleep I did yesterday! I tried to stay up for the end of the game last night, but the hour later start than when in St. Louis, made that difficult for me… And so, in the middle of the night, when I usually wake up, to take my chemo, and then go back to sleep, I checked the score to find out the Blues had won! … Our Blues come home now for the next two games, that they’ve got to win on home ice! The Blues were up 2-0 one minute and the next it was tied 2-2, UGH! And then the Blues went ahead 3-2, and I went to bed! I’m greeted this morning with the Killers song: Somebody Told Me…
Well, it was a nothing day in the currencies yesterday… Last night when I checked the currencies before heading off to bed, the euro was trading in the same clothes as it did all day at 1.1233… But the stock jockeys sure couldn’t say it was a “nothing day” in the stock markets… That was ugly, and it will leave a mark for sure, but at some point the Plunge Protection Team will step in, and well, stop the bleeding, the stock jockeys have that to look forward to! The stock investors sure don’t like the idea of increased tariffs not only on exported goods but on imported goods, making goods much more expensive, thus reducing the disposable income of consumers…
One currency that did move some on Monday was the Aussie dollar (A$), as it slid further back into the 69-cent handle. As I told you yesterday, this is all in response to the tariff thing escalating, for traders know all too well how this Trade War is going to hurt both the Chinese and U.S. economies, and probably spread around the world…
Gold pushed higher on the day by $13 and closed just under $1,300, at 1,299 and change… Tariffs are taxes folks… Think of your taxes going higher and inflation stepping into the picture once more, and the Fed? Well, like I said last week, they’ve painted themselves into a corner, and will be damned if the cut rates and invite inflation to soar, or damned if they don’t cut rates, and allow the economy to sink further into the recession abyss…
Remember, what I’ve been telling you folks, that this next recession might not be your garden variety recession… First of all, the U.S. has never had so much debt to deal with in past recessions… They’ve never had so many derivatives on the books of financial companies… They’ve always were able to cut interest rates at least 5% during recession, but with the Fed Funds Rate at 2.5%, that’s not happening this time… Oh, and we’ve never had the level of leveraged Corporate loans on the books, that could be like a keg of dynamite if set off…
I’m thinking that the Fed should risk inflation rising and worry about the short term of a recession and what it might bring… But then nobody asked me… Hello? Yes, this is Chuck Butler, who’s calling? Oh, hello, Jerome Powell, Fed chairman! What may I help you with? Well, Chuck, I’ve been reading the Pfennig for some time now, and I know you’re not one of our fans, but you made sense the other day when you said that you thought the Fed should risk inflation and cut rates… Did you really mean that, for I trust your opinion to the bitter ends of the earth! Well, yes, Mr. Chairman, that’s what I believe, because IF you’ve been reading religiously then you know about the black clouds that would circle the U.S. in a recession… So, go back and tell the other Fed Heads, what I’m saying, and I’m sure you’ll get them all to agree with me! Bye~…… As if!
Getting back to Gold… No early morning shenanigans today, so Gold starts the day at $1,299… Regarding Gold…. I’ve often wondered why the U.S. Gov’t doesn’t come out and make an appeal to U.S. citizens to buy Gold… Why not? I’ve talked about this graph before, but I thought I would pull it out again, dust it off, and tell you the results of investment returns in the past 20 years… REITS are number 1 with an average annual return of 9.9%… And Gold is second at 7.7%… You would have to go all the way down the 4% return range to find the developed markets of the U.S. (stocks & bonds)… Gold kicks their Behind the refrigerator there was a piece of glass, Lulu sat upon it and broke her little… ask me no more questions, I’ll tell you no more lies… And so on! Gold kicks rear and takes names later, and still individual investors, who are on the chart, all the way down at the bottom with an average annual return the past 20 years of just 1.9%, don’t buy Gold… And I sit here and wonder why?
Well, I heard that the recent 10-year Treasury auction didn’t go so well… Do you think it was because of the drop in yield? Or, was it the fact that investors are getting pretty wary about the debt situation here in the U.S.? Remember a very large portion of our Treasury auctions needs to be picked up by foreigners… And what did I tell you yesterday about what foreign Central Banks are doing with their reserves? That’s right, they’re buying physical Gold, and not Treasuries…. Uh-Oh, spaghetti-o’s….
And that brings me to very dark alley, where things are talked about outside of the media… Here, I get to listen to many theories and rumors… The rumor I’m concentrating on now is the one that floated around about 10 years ago, and I warned then that it would come back at some point in the future, and it has, that’s why I’m checking it out today… The rumor I’m talking about is the Gov’t requiring U.S. citizens with 401’s and IRA’s to buy Treasuries, since the foreigners aren’t buying them… While I don’t care for the idea, think about it for a minute… If all the moms and pops of the U.S. held Treasuries in their retirement account, they wouldn’t give two hoots about a stock selloff, now would they? So… checking on it, I find it’s way back in the dark alley, so it appears to be a back burner things right now…
In a side bar… The State of Illinois’ finances are in such shambles that they’re looking for new sources of income… This from the Chicago Tribune…. “ Illinois might start charging $1,000 a year to own an electric car”…. Hey, you can’t make this stuff up folks!
The U.S. Data Cupboard still doesn’t have much to offer us today, same as yesterday, when only Fed Heads speaking were counted as offerings… One Fed Head Neal Kashkari, really made a point of how he believes interest rates need to be lower, which caught the ear of a few Traders…
The Price of Oil can’t find a bid these days, and that’s really put a crimper on the Petrol Currencies, led by the Russian ruble, which continued to receive good news about the Russian economy, but with the price of Oil wallowing in the mud, the ruble isn’t going anywhere for now… And neither is the Canadian dollar / loonie, Brazilian real, Norwegian krone, and a few others…
To recap… It was a “nothing day” in the currencies as they didn’t move up or down on the day, except the A$ which saw more selling because of the problems in China. China announced that they would retaliate with tariffs on U.S. goods, and the stock jockeys got their rear ends handed to the them yesterday… But not to worry, just yet, as the PPT should be in the stock market today to save Polly purebread… Oil can’t find a bid… But Gold moved higher on the day by $13.80! And sits just below $1,300…
For What It’s Worth…. For years I’ve written about all the attempts to end the use of cash… I gave you my reasons for being against this effort. Sweden is the posterchild for a cashless society, but here in the U.S. we have more forward thinking people that see what the world would be like with no cash… And I saw this article and though, this is a good follow up, for it talks about plans to fine businesses that only accept credit cards… And it can be found here: https://needtoknow.news/2019/05/cash-is-still-king-san-francisco-bans-cashless-stores-that-require-patrons-to-pay-via-credit-card/
Or, here’s your snippet: “San Francisco officials voted Tuesday to require brick-and-mortar retailers accept cash for goods as payment, joining Philadelphia and New Jersey in banning a growing cashless system that discriminates against low-income people who may not have access to credit cards. Cashless systems can be used to control people and their finances.
San Francisco officials voted Tuesday to require brick-and-mortar retailers to take cash as payment, joining Philadelphia and New Jersey in banning a growing paperless practice that critics say discriminates against low-income people who may not have access to credit cards.
The vote by the Board of Supervisors was unanimous.
Supervisor Vallie Brown, who introduced the legislation, said it “will go far in ensuring all San Franciscans have equitable access to the city’s economy.”
Chuck again… I sure hope this catches on elsewhere, because I was beginning to feel the pressure of no cash being used… Whew! And with all that’s going on in the world today, we certainly don’t need to deal with this stuff right now! (Or never in my opinion!)
Currencies today 5/14/19 American Style: A$.6947, kiwi .6582, C$ .7425, euro 1.1233, sterling 1.2948, Swiss $.9927, European Style: rand 14.2350, krone 8.7246, SEK 9.5970, forint 288.68, zloty 3.8350, koruna 22.9260, RUB 65.33, yen 109.62, sing 1.3686, HKD 7.8487, INR 70.51, China 6.8666, peso 19.18, BRL 3.9717, Dollar Index 97.34, Oil $61.77, 10-year 2.41%, Silver $14.80, Platinum $862.15, Palladium $1,332.46, and Gold… $1,299.04
That’s it for today… So, the Blues won, the series is tied 1-1… Our Blues played in the Stanley Cup Finals their first 3 years in the league, and never won a game in the finals, getting swept each year. I have no idea why I went there… But there you go, if you ever wondered! HA! I forgot to mention yesterday, that last Friday, former colleague and friend, Chris Gaffney came to visit me at my local watering hole! Thanks Chris! I try to remain on the minds of my former colleagues, but I think I’m losing, as “out of sight, out of mind” seems to rule… Oh well… I tried… Cardinals are in hot-lanta for the next 3 days, and then down to Texas for the weekend… The Great Smokey Robinson takes us to the finish line today with his song: Ooo Baby, Baby… After I was an old man I was told that this is the best “make out” song… too late for me, but for you youngsters, there you go! HA! I hope you have a Tom Terrific Tuesday, and will continue to Be Good To Yourself!
Chuck Butler