April 1, 2021
* Currencies drift again on Wednesday and overnight
* Chuck asks, Has the bottom for Gold been put in?
Good day… And a Tub Thumpin’ Thursday to you! Another beautiful, very warm, day here… The weather people tell me that today will be a day of rain… We haven’t had a drop of rain here since the first weekend of the month… So, even though it’s my last day here for a while, I’ll be OK, with rain… For all that came to visit us this month, you’ve had some of the best weather ever! As the days get warmer and warmer, I find that I can’t sit out in the sun as long… After about an hour and a half yesterday, I called it a day! We’ve made some good friends down here this year… And one of them (Karen) was trying to talk me into staying! I would, but… family and Easter… 3 years ago, I spent most of the summer down here by myself, as the construction was being done on our new unit… Don McClean greets me this morning with his song: Vincent… Starry, starry night… paint your palette blue and gray… that song always makes me tear up… and I don’t know why!
The assault on the currencies & metals seems to have ended, for now… The currencies drifted along yesterday, and had no real direction. The Dollar Index which was trading at 93.17 in the morning, ended the day at 93.19… So, as you can see… little change in the currencies… Gold & Silver finally saw a bid after a week of seeing only offers… Gold ended the day up $22.80 to close the day at $1,709.50, and Silver also gained on the day 41-cents to close the day at $24.41… Finally! Was the bottom for these two metals put in on Tuesday? I sure hope so!
In the overnight markets… There’s been little to no movement in the currencies. The Dollar Index is trading at 93.15, this morning, so compared to last night’s 93.19, you can see that there’s been little movement. Gold, however, is starting the day up about $6 as I write… Silver is down 9-cents, but that can be turned around quickly, and I do believe it will be today… So, if Gold can hold its gains today and even add to them, that would signify that the bottom was put in on Tuesday…
Well, the good folks at GATA sent me two emails yesterday, and both are going to featured here in the Pfennig today… The first one goes like this: “U.S. Rep. Alex Mooney, R-West Virginia, today re-introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.
The Monetary Metals Tax Neutrality Act (H.R. 2284), backed by the Sound Money Defense League and free-market activists, would clarify that the sale and exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.”
And the second one goes like this: “The dollar’s share of global currency reserves dropped in the fourth quarter to around 59%, the lowest in 25 years, according to International Monetary Fund data.
The slide came in a quarter when a gauge of the greenback fell the most since 2010, and amid questions about how long the dollar can maintain its status as the pre-eminent reserve currency.”
Chuck again… Ok, first off, I would like to tell you to contact your representative and tell him you’re behind the H.R. 2284…. This guy, Alex Mooney, has been fighting for this for some time, he implemented it in his state of West Virginia, but now would like to see go nationally… And so would I! Talk about a boon to Gold & Silver! People love tax free stuff!
And second of all… I’ve been telling you for ages now that the dollar’s ratio of reserve currency held by foreigners was going down… And now we learn it’s the lowest its been since 2010? If Foreign Central Banks can see the dollar’s future with all the supply in dollars floating around, then why can’t currency traders? You don’t think that… Nah, don’t go there Chuck!, Oh, you might as well, you already started to tell them your thoughts… You don’t think that currency traders have gotten the memo from the Gov’t that they are not to short the dollar, do you? I do!
And before I go on… I have a bone to pick with the Gov’t for even thinking about implementing a vaccine passport… That is a gross violation of our rights! And why would tax paying citizens be required to have a vaccine passport, when the President is allowing thousands of illegal immigrants into the country without a vaccine? I’m an so up in arms about this thought, that It makes me want to scream!
Ok… I had better get back to the regular programming before I really tick everyone off! Hmmm.. let’s see… Well,, the other day I mentioned that the Cartel had announced they would be implementing yield curve control (YCC) s YCC is another way of interest-rate setting that involves buying as much U.S. Treasuries and government-backed debt as necessary to keep yields below a certain level…
Now you may be saying, isn’t that a form of interest rate manipulation? Well, you would be exactly correct! What had happened in recent months is the bond boys saw inflation rising, and the Cartel’s desire to let inflation run hot, and they began to sell bonds to lower the price of the bond, and raise the yield… Thus higher interest rates/ yields would combat inflation… But the Cartel saw this and decided that they would teach the bond boys a lesson… They’ll buy truck loads of bonds, and thus cause the price of the bonds to rise, and the yield to drop…
That’s all fine and good… Let the Cartel do what they want to do, because not even Congress can stop them now… But the thing to think about here is that they don’t give these bonds away for free! You have to pay for them, and since the Cartel has no money to spend on them, guess what happens? Ahhh grasshopper, you’ve learned well… Yes, they will print the currency needed to pay for the bonds… And even more dollars hit the economy… When will it be too much, and the dollar gets punished? I guess we’ll have to wait-n-see, eh?
The U.S. Data Cupboard yesterday, had the ADP Employment Report for March, and it was quite impressive, with 517,000 new hires taken on in March… If the ADP is 517,000 you can only guess what number will be pulled out of hat by the BLS for their Jobs Jamboree on Friday/ tomorrow…
Today’s Cupboard has the weekly Initial Jobless Claims to print from last week… Recall that last week’s print for the previous week, saw the Claims drop below 700,000 for the first time since the Pandemic came to our shores a year ago… Even with this drop, the number was still higher than the highest number during the Great Recession of 13 years ago…
We’ll also see the ISM Manufacturing Index for March and Construction Spending for March… No real market moving prints, although the ISM used to be a market moving print…
To recap… The currencies drifted all day yesterday, with no real directional movement, and in the overnight markets there was more drifting in the currencies. Gold & Silver finally saw a bid yesterday, and ran with it, with Gold closing up $22.80, and Silver closing up 41-cents… In the early trading today both are . Chuck is upset with the vaccine passport idea… And goes the whole nine yards in describing yield curve control…
For What It’s Worth…. The FWIW articles well was pretty dry this morning, that is as far as thing s I want to talk about and not get people ticked off at me! And then I went back in my email box and found an article from the good folks at Wallstreetonparade.com. This is an article about how those dastardly derivatives have caused some major damage, and it can be found here: Shades of 2008: Derivative Bets Blow Up Archegos Hedge Fund; Inflict Billions in Losses on Global Banks (wallstreetonparade.com)
Or, here’s your snippet: “The Archegos Capital Management hedge fund implosion has, thus far, delivered billions of dollars in losses to the shareholders of global banks Credit Suisse and Nomura, whose market values have plummeted; done serious reputational damage to Goldman Sachs and Morgan Stanley, both of whom are allowed to own federally-insured banks even after they came close to blowing themselves up in 2008 and surely would have without gargantuan secret bailouts from the Federal Reserve; cut the market value of ViacomCBS in half; dropped the market value of Discovery by 40 percent; shaved billions of dollars off the market value of major Wall Street banks yesterday as rumors ran wild about who is hiding losses; and raised critical questions, once again, about the competency of the Federal Reserve to supervise these federally-insured trading casinos.
The Archegos meltdown has done one more thing. It has reminded the readers of Wall Street On Parade that our decade of hand-wringing over the dangerous brew of allowing federally-insured, deposit-taking banks to own tens of trillions of dollars in opaque, over-the-counter derivatives remains the biggest threat to the financial stability of the United States.
What has been pieced together thus far, and not denied by any of the parties involved, is as follows:
After pleading guilty to wire fraud involving insider trading in 2012 on behalf of another hedge fund he founded, Sung Kook “Bill” Hwang sometime thereafter quietly founded a “family office,” a hedge fund that is allowed to decide for itself if it needs to register with the Securities and Exchange Commission. There are no filings with the SEC to suggest it knows Archegos exists or how it operates and there are no 13-F filings with the SEC to show the dangerous levels of stock exposure and leverage it had amassed through derivatives contracts with some of the biggest banks on Wall Street. This, of course, raises the question as to just how much of this booming stock market is based on secret derivative contracts between dodgy hedge funds and federally-insured banks.”
Chuck Again… Pam and Russ Martens of WSOP, do an excellent job of laying out the problems and explaining how they collapsed… And once again, there’s no way in my mind that Banks should be dealing in derivatives, other than hedging their mortgage pipeline…
Market prices 4/1/2021… American Style: A$ .7563, kiwi .6975, C$ .7947, euro 1.1743, sterling 1.3776, Swiss $1.0575, European Style: rand 14.7275, krone 8.5498, SEK 8.7418, forint 308.47, zloty 3.9350, koruna 22.1974, RUB 75.62, yen 110.80, sing 1.3460, HKD 7.7769, INR 73.42, China 6.5536, peso 20.40, BRL 5.7184, Dollar Index 93.15, Oil $60.20, 10-year 1.72%, Silver $24.42, Platinum $1,188.00, Palladium $2,684.0, Copper $4.01, and Gold $1,715.70
That’s it for today… Happy April Fools Day! And welcome to April… I forgot to say that at the beginning today, so here it is now! I hope you steer clear of having any April Fool’s jokes pulled on you today! Tomorrow is a long day of travel for yours truly, with a 3 hour layover in Nashville a part of the day! UGH! And on Sunday, it will be Easter… A very holy day for much of the world… And the end of lent, so meat can be eaten again on Fridays! When I was a young man, we couldn’t eat meat on ANY Friday… Lots of fish sticks and mac & cheese, were the fares at the Butler House… So, I hope you have some great family plans this weekend… I know I do… it will be good to see my little Evie again, and her big brother Braden… It’s going to take some time for Evie to warm up to me again, I’m sure… I used to be able to make her smile very easily… But 3 months away, and she’ll probably look at me like deer into the headlights! I can’t wait to see Delaney Grace in her Easter Bonnet! Oh My Goodness… What am I thinking about! Today is OPENING DAY for baseball! It should be a national holiday, but since it isn’t, folks in the home ball parks will have to call in sick today! Go Cardinals! Our city’s home opener isn’t for another week… The Clydesdales, the Hall of Famers, the pomp and majesty of a St. Louis Cardinals Home Opener will give you goose bumps! The Marshal Tucker Band takes us to the finish line today with their song: Can’t You See? I hope you have a very blessed Easter on Sunday, and before that a Tub Thumpin’ Thursday, and a Fantastico Good Friday, and will try to Be Good To Yourself!
Chuck Butler