Chuck Butler’s: A Pfennig For Your Thoughts
December 4, 2017
* Dollar rally loses steam…
* Senate passes tax bill…
* Another manipulated asset?
Good day… And a Marvelous Monday to you ! And welcome to December! Good riddance to November! As it was full of the reasons I do not like the month! I continue to recover, from my recent surgery, and look forward to the pain going away… I don’t need it to go away mad, I just need it to go away! John Wait greets me this morning with his very apropos song titled: Back On My Feed Again..
I know that I’m beginning to sound a lot like a broken record, when I tell you that there just isn’t anything new in the world of currencies to talk about… Yes, Bitcoin is soaring to the moon, and congratulations to anyone that bought Bitcoin a few years ago… Shoot Rudy, even if you bought it last year, you’re looking at HUGE gains! And now I read, yesterday, that the Fed might be looking at issuing their own digital currency… Brother! This is all madness folks…
I was also treated to the newest edition of Grant William’s Things That Make You Go Hmmm, yesterday, and so with my continuing to boycott watching NFL games in place, I dived right into Grant’s letter… And talk about madness! Grant highlighted a recent piece of art auction that proves once and for all that the years of ZIRP (zero interest rate policy) and QE (Quantitative Easing) have caused asset inflation that’s just ridiculous… A painting of Jesus Crist, that sold for $10,000 in 2005, sold last week for $127.5 Million! Which was up from a sale earlier in the year for $80 Million! Are you kidding me? WOW! That’s all crazy, folks, just like the price of Bitcoin… Remember, thieves, thugs, mobsters, porn kings, and whatever other form of low-life people use Bitcoin… I’ll say this once again, you need to be careful of who you lie down with, for if you lie down with the dog, you’ll get fleas, etc. And that’s all I’m saying about that…
The dollar’s rally last week stalled out, which was interesting to me given the momentum that was gathering toward the passage of the Tax Reform Bill, that did get passed on Saturday. I haven’t had the chance to dive into the new Tax Reform Bill, but I will and when I do, I’m sure I’m going to find that it is 1. NOT revenue /spending neutral as it was billed to be, and 2. that like I’ve said all along, the tax reform was all about corporations, and not about you and me… But I’m sure there’s something in there that is going to hurt you and me, for when have the lawmakers in Washington D. C. been on the lookout for you and me? Got your back, Jack, is not in their vocabulary when it comes to you and me!
Whenever Congress does something I’m always reminded of a quote by President Ronald Reagan who said, “nothing lasts longer than a temporary Gov’t program”… You know, like how the removal of Gold as the backing for the dollar in 1971, was supposed to only be “temporary”…
Speaking of Gold… Let me see if I got this right… N. Korea shoots off another ICBM, last week… The U.S. continues to push the envelope with China’s territorial waters, and the U.S. continues to have military exercises in S. Korea, and on top of all that, Congress just passed a tax bill that will probably add to our national debt by heaps and bounds, and Gold can’t find a bid? Something’s definitely wrong with this picture folks…
When my kids were little and watched Sesame Street, they would sing a song.. One of these things is not like the other… And while it’s not the same, I think of this song whenever I list all the reasons Gold should be soaring right now, and it isn’t…. In fact, Gold is down $6 in the early morning trading today… UGH!
Palladium continues to steal the spotlight from the other precious metals, and has booked a 45% return so far this year, and it doesn’t look like it’s going to slow down and it’s certainly not going to have to stop, go to jail and not collect $200!
Geez Louise I wish there were tons of currency news out there for me to tell you about, but there just isn’t… It’s the same old thing over and over again… The Producer Price Index (PPI- Wholesale inflation) beat the forecasts in Rocktober in the Eurozone printing at .04%, but the euro isn’t able to buy a bid right now, so this data just flows like water off a duck’s back!
I was reading a note from UBS (Union Bank Switzerland) this past weekend and they were talking about how the credit markets around the world, especially here in the U.S. were going to see tightening in 2018… Hmmm I guess I’m going to have to do some additional research to prove what I’m thinking is going to come to fruition.. I’m not seeing the tightening, instead I’m seeing Central Banks all scrambling to provide liquidity in the markets, with additional bouts of QE, and lower interest rates…
Maybe… Maybe I’m wrong… to go on singing, singing this song… But it’s what I saw coming and I haven’t been able to shake that from my mind…
Well, did you see the news last week about how a Boston Pension Fund is suing the Primary Dealers for Treasuries, saying that they manipulated the prices at the auctions? Oh My! LIBOR, Swiss Francs, Gold fixing, and now Treasuries… And people still say that the Gold & Silver prices aren’t manipulated… I shake my head and wonder how they don’t see this all falling into place with one manipulated asset after another being exposed…
We’ll get a piece of real economic data today, when Factory Orders for Rocktober get printed, and will show that the pulse is faint for this data set… This will be a BIG week for data, ending with the November Jobs Jamboree on Friday, so buckle yourself in as the currencies could take some wild swings this week…
To recap… The dollar’s rally has stalled out… The Tax Reform Bill passed in the Senate on Saturday, Gold can’t find a bid, and now the Primary Dealers are getting sued for allegedly manipulating Treasury prices… It’ll be a Jobs Jamboree Friday this week, and Chuck is just really bummed out that the newswires aren’t filled with currency items!
For What It’s Worth… Well, here we go… This article appeared in my local paper, but I’m sure it was taken from someplace else first! It’s about a speech by Janet Yellen, who is a cheerleader for U.S. growth, and shows her best cheers here: http://www.stltoday.com/business/local/yellen-recovery-increasingly-broad-based-in-both-u-s-and/article_ab64fa1b-a29e-5708-ad62-6726be1138e8.html#utm_source=stltoday.com&utm_campaign=BusinessNewsletter&utm_medium=email&utm_content=A12874506A3B5805DDED6C95AF30D7173DF7C77A
Or, here’s your snippet: “The U.S. economy has gathered steam this year and will warrant continued interest rate increases amid a global recovery, Federal Reserve Chair Janet Yellen told congressional leaders on Wednesday.
“The economic expansion is increasingly broad based across sectors as well as across much of the global economy,” Yellen said in prepared remarks delivered to the Joint Economic Committee.
Stock indexes, bond yields and the dollar were all higher in initial trading.
With weak inflation likely to prove “transitory,” she said “we continue to expect that gradual increases in the federal funds rate will be appropriate.”
Chuck again… She didn’t mention when the next rate hike will be, which everyone except me, thinks it will be in December when the Fed meets 12/13 & 14…
Currencies today 12/4/17… American Style: A$ .7605, kiwi .6869, C$ .7889, euro 1.1855, sterling 1,3507, Swiss $1.0167, … European Style: rand 13.6738, krone 8.3175, SEK 8.4030, forint 263.96, zloty 3.5439, koruna 21.5744, RUB 58.85, yen 112.90, sing 1.3482, HKD 7.8143, INR 64.42, China 6.6171, peso 18.64, BRL 3.2541, Dollar Index 93.15, Oil $57.69, 10-year 2.40%, Silver $16.34, Platinum $930.6, Palladium $1,018.68, and Gold… $1,276.20
That’s it for today… Well, how about those conference Championship Games on Saturday? Not much drama, and the playoff field is set, with Clemson, Oklahoma, Georgia and Alabama… The semifinals will be played on New Year’s eve… My beloved Mizzou Tigers will be playing in the Texas Bowl on 12/27 VS an old Big 12 rival, Texas… It was quite the turnaround season for the Tigers as they started 1-5, and ended up 7-5… I keep thinking I’m forgetting something this morning… Oh well, it’ll slap me in the face soon, I’m sure! Ok, time to go… Robert Plant takes us to the finish lined today with his song: In The Mood… Now, go out and make this a Marvelous Monday, and Be Good To Yourself!
Chuck Butler