February 26, 2020
* The price Manipulators weren’t finished selling Gold Short on Monday
* The dollar bugs continue to hold the conn over the currencies…
Good Day… And a Wonderful Wednesday to you! The last Pfennig until March 9th… I know you all will not like the fact that I won’t be writing until then, so take the time to enjoy this last one until the 9th! I will miss you too… But hopefully I will be having so much fun that I forget that I miss you! A bad game for my beloved Cardinals yesterday, but the day was fabulous! And a grand time was had by all… After the game we went to a nearby place to have some dinner, and while my stomach wasn’t participating, I went next door and got my head shaved at a cool barber shop that I’ll be sure to return to in a week to ten days when I’m ready for a re-shave! Two sets of friends that used to be neighbors of ours are here to go to games with us… Great company, great memories, great times! Loggins and Messina greet me this morning with their song: Your Momma Don’t Dance… And you Daddy don’t rock and roll! When my darling daughter Dawn was a young girl, she would get confused by the words, and so I told her to sing it the way she knew the words should be… And she would sing; My momma does dance and my daddy does Rock and Roll!
Poor Gold… The price manipulators just can’t bear to see us Gold bugs celebrate, now can they? Gold sufferered though a day where the price manipulators had the conn, and brought Gold’s price back down to $1,635… This after seeing gold reach $1,691 the previous day… So, there’s been no cure for the Coronavirus, no vaccine that can be administered, and so the same fears of spreading are still on the minds of traders, but… the price manipulators can’t have Gold taking off to higher ground without a fight…
In fact, the CDC just issued a note that talked about a “pending outbreak of the Coronavirus in the U.S.” And then right after they issued that statement, it was reported that a U.S. soldier had been tested positive for the virus… Uh-oh… So, on that news, Gold has recovered some of its loss yesterday, and is up $12.85 in the early trading….
Remember, and I’ll go though this once again for those that are new to class…. The U.S. Gov’t has been fighting a rise in the price of Gold since the early 70’s … I’ve seen communiques released by Wikileaks that have the words of Henry Kissinger, Paul Volcker, and others talking about how they couldn’t allow Gold’s price to rise, which would bring it forefront to the minds of investors around the world, who thought about substituting dollars for Gold… Palladium can climb to the moon, and the price manipulators don’t care… But give Gold a day or two of rally, and the price manipulators are allover Gold like a cheap suit!
OK, I had better stop there… before I hear a knock on my door, and two square jawed young men with sunglasses on, are asking me to go with them! But I figure as long as the folks over at Wall Street On Parade, continue to expose the truths about what the U.S. Gov’t is doing through the banks, etc, then I should be OK… But if they get shut down, by the Government, then I guess I will be worried at that time!
The Dollar Bugs are finding it difficult to keep the euro down, while there are finding it easiy to remain well bid VS the other currencies… The Dollar Index has risen to above 99… this is the highest it’s been in a long time folks… Just goes to show-ya that dollar bugs are stranger than fiction… But what do I always tell you when it appears that something has gone about as far as it will go? That to remember that a star shines brightest right before it burns out… I’m just saying..
In the Eurozone this morning, the European Central Bank President, Christine Lagarde will speak. This will be her first run at continuing the legacy of Mario Draghi, who at any opportunity would throw the euro under a bus… I’m wishin’ and hopin’ and thinkin’ and prayin’ that Lagarde goes in a different direction, and begins to take ownership of the euro, which as the President of the Central Bank she should do automatically!
The euro has slowly moved higher VS the dollar this week, and I would not like to see it get trashed because Lagarde throws it under a bus…
Tonight in New Zealand, they will print their latest Trade data… Remember New Zealand is an island country so their Trade data should be a Deficit, but… this time this report will be affected by the Coronavirus in China… I’ll keep an eye (because that’s all I have!) on this data to see if the virus has started to filter into the economic reports. This will be a good thing to go on down there, to take their minds off the way their respective currencies (A$’s and kiwi) are being treated these days…
You know I totally forgot to gloat yesterday… What on earth am I talking about now? Well, some time ago I told you that the U.S. 10-year Treasury’s yield would go lower than the previous low of 1.38% from several years ago, and yesterday it did just that! I know, I know, I hear you saying that this only proves that even a blind squirrel can find an acorn… But hey! At least I made a call that come to fruition, didn’t I? And because of that I’m gloating this morning!
In other things, the price of Oil has slide back below $50 in the past 24 hours, and that has simply piled on, without a 15-year penalty, the dollar’s strength on the Petrol Currencies, led by the Russian ruble… UGH!
The U.S. Data Cupboard just has some new housing sales data for us today. Not real economic data… We won’t see any of that until tomorrow when the January Durable and Capital Goods Orders print… I’ve really become jaded toward the U.S. Data Cupboard, and its data prints… For they don’t see to be taken into the value of the dollar, the way they once were…
To recap… Gold hot whacked badly by over $24 yesterday, and it was all the paper short Gold trades doing the trick… But a CDC statement yesterday has Gold trying to recover its losses yesterday in the early morning trading today. The euro continues to inch higher VS the dollar, while the other currencies are getting taken to the woodshed on a daily basis. The Dollar Index has gone over the 99 handle, Treasuries have breached their previous low of 1.38%, and the price of Oil has slid back below $50…
For What It’s Worth… Like I said above the bad and weak data prints don’t seem to be worthy of weakening the dollar these days, and here’s another example of that statement, as subprime credit delinquencies are rising and it’s as if no one cares… this article can be found here: https://wolfstreet.com/2020/02/22/subprime-credit-card-delinquencies-spike-to-record-high-past-financial-crisis-peak-as-other-consumers-relish-the-good-times-why/
Or, here’s your snippet: “The rate of credit card balances that are 30 days or more delinquent at the 4,500 or so commercial banks that are smaller than the top 100 banks spiked to 7.05% in the fourth quarter, the highest delinquency rate in the data going back to the 1980s (red line).
But at the largest 100 banks, the credit-card delinquency rate was 2.48%, which kept the overall credit-card delinquency rate at all commercial banks at 2.7% (blue line), though it was the highest since 2012, according to the Federal Reserve. What’s going on here, with this bifurcation of the delinquency rates and what does that tell us about consumers?
Clearly, those consumers that have obtained credit cards at the smaller banks are in a heap of trouble and are falling behind at a historically high rate. But consumers that got their credit cards at the big banks – lured by 2% cash-back offers and other benefits that are being heavily promoted to consumers with top credit scores – do not feel the pain.
A similarly disturbing trend is going on with auto loans. Seriously delinquent auto loans jumped to 4.94% of total auto loans and leases outstanding. This is higher than the delinquency rate in Q3 2010 amid the worst unemployment crisis since the Great Depression. On closer inspection, there was that bifurcation again; prime-rated loans had historically low delinquency rates; but a shocking 23% of all subprime loans were 90+ days delinquent.
During the Financial Crisis, delinquencies on credit cards and auto loans were soaring because over 10 million people had lost their jobs and they couldn’t make their payments.”
Chuck again… and to think that supposedly we’re in “good times” economics wise, right, I mean that’s what we just keep hearing, but then we have all these problems, what gives?
Currencies today 2/26/20 American Style: A$ .6591, kiwi .6298, C$ .7521, euro 1.0876, sterling 1.2936, Swiss $1.0250, European Style: rand 15.2602, krone 9.3808, SEK 9.7372, forint 312.20, zloty 3.9603, koruna 23.2495, RUB 65.21, yen 110.55, sing 1.3974, HKD 7.7917, INR 71.62, China 7.0335, peso 19.13, BRL 4.3866, Dollar Index 99.12, Oil $49.47, 10-year 1.37%, Silver $18.09, Platinum $928.82, Palladium $2,729.00 and Gold…. $1.647.84
That’s it for today and until March 9…. I’m really excited to have my spring training buddie showing up on Friday… They will probably be ready for some warmer weather, it’s snowing in St. Louis this morning! It was 85 and hot at times here yesterday, I even had to go underneath the stands for a short time to get out of the sun… Maybe the next time we talk, I will have good news regarding my leg wound, as it appears to finally be on the mend… Friday would have been my sister Barbara’s birthday. We lost her way too early to ALS a couple of years ago… Many years ago, Barbara and I were very tight, but then she got married, and had kids, and life went on… OK… Blues beat the Blackhawks last night 6-5, that must have been a wild and wooly game like the one’s in the past! Both my college basketball teams will play tonight at the same time… Mizzou will play at Vanderbilt, and St. Joes will visit out St. Louis U. Billikens… Jefferson Starship takes us to the finish line today with their song: Count On Me… I hope you have a Wonderful Wednesday, and please Be Good To Yourself, while I’m gone!
Chuck Butler