July 15, 2020
* Currencies, led by the euro continue to rise…
* Both Gold & Silver had good days on Tuesday…
Good day… And a Wonderful Wednesday to you! Well, today is Tax Day… not that most of you waited to pay your taxes this day, but it is the last day to file them, and usually on April 15th, I do this, but since it’s July 15th this year, Pfennig Tradition calls for this: f you drive a car, I’ll tax the street
If you try to sit, I’ll tax your seat
If you get too cold, I’ll tax the heat
If you take a walk, I’ll tax your feet
‘Cause I’m the taxman, yeah, I’m the taxman – Beatles…
Thinking of taxes…. I’ve paid my fair share through the years, I can tell you that! I really get upset when someone says you didn’t pay your fair share… If I were a young man, when my temper was always ready to be set loose a the drop of hat, I would have hit the guy before he got the last words out… But I’m not 19 any longer, and besides, that way of life wasn’t getting me anywhere, so I calmed down, and changed, pulled my temper inside… Most people I know have no idea what a roughneck I was at that time… Good thing I found God… I’m just saying…
OK… well, the fed’s got their backs again, as stocks rallied yesterday… Ok, riddle me this Batman…. One day Tesla announces that they’re going to have to drop the price on one of their model cars due to slow sales, and then the next day Tesla stock rallies… Where’s the common sense here? Chalk that one up along with buying Hertz stock, and others that have filed for bankruptcy…. I’m glad I don’t have to explain this moronic thinking to a group of people… No wait! That’s what I’m trying to do here! But I can’t! I really can’t!
I realize that even more than ever with the loss of jobs and businesses that many feel that they have to find a scheme to get them some money fast… And so they turn to the stock market, because, well, they don’t have anywhere else they can go to spend $50 and buy slices of 5 different stocks, like I see you can now do… I just see this all coming crashing down in an awful heap, taking no prisoners, not passing Go and collecting $200, and leaving just devastation everywhere…. But then that’s me, what do I know? Well, as I explained yesterday that’s 47 years of being associated with the markets talking….
So… The currencies continued to shave more of the dollar’s armor off it, yesterday, with the euro trading above 1.14 once again… I read the other day that a chartist called 1.16 the line in the sand for the euro… In other words, if the euro reaches 1.16, then the weak dollar trend will officially be over, with the euro leading the way once again… I’m sorry, but I just can’t get excited about the euro these days… The Eurozone has more problems than you can shake a stick at, and I just can’t see the euro rallying like it did in 2003… But… as I’ve always told you, the euro is the offset currency to the dollar, so when traders want to begin selling dollars, the euro will be the beneficiary of that dollar selling, whether or not the euro deserves it!
There weren’t great moves in the currencies yesterday, just moves upward…. The price of Oil remained steady Eddie, and Gold gained $8 to close at $1,811, and Silver gained 24-cents to move higher within the $19 range…. Silver continues to get my interest here… And I’m sure glad that I own Silver…
I used to tell the folks on the desk about how I bought two Silver coins, one for each kid at the time, and spent $23 each for them… They are specially minted coins, so they cost a bit more than spot, but still, Silver in the early 70’s was over $20… And then back in 2005 I would tell them that story, and say, “I’m still waiting for Silver to have a gain for me”… And then it not only reached $23 once again, but continued onto $50…. I recall being asked to be interviewed for an article where I called Silver “the new Gold”… But then it wasn’t… and hasn’t been even really thought about since 2011…. Until now!
Gold is up $7 in the early trading this morning, so we start the day with Gold at $1,817… The Boys in the band are going to continue to attempt to bring the price of Gold (& Silver) back down, but from my view in the cheap seats, there’s just too much momentum building in these two metals , and selling them short is like throwing yourself in front of a moving bus… But that doesn’t stop the Boys in the band… My wish for them is that they experience many deep losses from their short trades…
And the Swiss National Bank (SNB) Gov. Jordan, was up to his old tricks yesterday. He had this to say about the rise in the Swiss franc… “Even though we still have scope for further interest-rate cuts, the fact remains that one cannot lower interest rates indefinitely, “Swiss National Bank President Thomas Jordan said in a lecture for the International Monetary Fund on Tuesday. “For this reason, interventions in the foreign exchange market, in which we buy foreign currencies and sell Swiss francs, also play a central role in our policy mix.” I was sent that from the good folks at GATA yesterday…
Oh have you heard the news? There’s good rockin’ at midnight! No wait…. What I really wanted to talk about was the news from yesterday that the U.S. Treasury has decided to simply cancel the checks they sent to dead people…. Recall I talked about this error by the Gov’t, and the steps they were taking to get the checks returned. So after all this time, and effort in getting the checks back, someone in the back of the room raised their hand and said, “What if we just cancel the checks?” I don’t know about you, but I made myself laugh at that thought!
OK, now for some upbeat words from Ron Paul, whom I admire by the way…. “A coming crisis will likely be triggered by a collapse in the value of the dollar’s value and a rejection of the dollar’s world reserve status.” And I couldn’t agree with him more!
And the GATA folks sent me an article that explained how the Chinese foiled a “spoofing” attempt by what is believed to be U.S. banks in the Shanghai Gold Market… The Chinese should be sure about who was the attempter and then banish them from doing business on the SGM… If this was a Gold market in Japan, they would be showing how-to films for falling on a sword… And if it was found in the U.S. they would get a slap on the hands, and a monetary fine that comes nowhere near the amount of money the “spoofing bank” made in their “spoofing”…. I’m just saying!
The U.S. Data Cupboard finally gets something besides the stupid CPI to print today… Oh, by the way, the Gov’t tells us that consumer inflation as measured by CPI, rose .06% in June, which was almost double the expectations. I guess those so-called experts making the expectations, forgot about all the stimulus checks that were sent out, and how, for the most part they finally got spent in June.
Yesterday we had the two speeches by Fed Doves, Brainard, and Bullard. Of the two Brainard had the best quote when she expressed worry about the economy, and said, that” There May come a time’ when yield-curve controls may be needed.” Bullard mentioned something to the tune of the stock markets optimism has been correct… Brother, can we ever get a real truthful speech from a Fed Head?
Today’s Cupboard has the June prints of Industrial Production and Capacity Utilization… Both had seen recoveries of some sort in May, and the continuation of those recoveries are expected in June…. That is unless they waited until later in the month to compile the data, after the economies of Texas and California were shut back down…. Just something to keep in mind should the data weaken, and if it doesn’t, then something to look for next month.
To recap…. The euro is really pushing the currency envelope into the face of the dollar bugs… The single unit has reached 1.14, and the chartists say that 1.16 is the line in the sand… Much like I used to say about Gold getting past $1,750… Gold added $8 yesterday, and is up another $7 in the early trading today. Silver added 24-cents to its value, and moved higher into the $19 handle. And the U.S. Treasury finally came up with a novel idea to simply cancel the checks they sent out to dead people… This has become the cancel country, so why not carry that on to the checks that were sent in error…
Oh! and one more thing before we head to the Big Finish… The U.S. Current Debt has already passed $26.5 Trillion, with the $500 Billion being added in a blink of an eye… As longtime readers you know that I have stomped and hollered about the rising Debt in this country for years, and we used to have to play a game with the debt ceiling folks, but not any longer, this debt just keeps pushing toward the $30 Trillion I said it would reach this year, and no one seems to care…. except me, and maybe you…
For What It’s Worth…. Well, it’s times like this that I need a dose of longtime friend, and publishing guru, Bill Bonner…. And today Bill is talking about fake money and it can be found here: https://www.rogueeconomics.com/bill-bonner-diary/government-spending-has-created-a-country-dependent-on-fake-money/
Or, here’s your snippet: “But it isn’t that simple. Both President Trump and presidential candidate Joe Biden say they aim to make America great again. But neither seems to have any idea what ails it.
A thoughtful person would spot the damage done by the war on drugs… the war on poverty… the war on terrorism… the war on COVID-19… the deficits, fake money, false interest rates, debt… the Swamp… and the Deep State.
An honest candidate for president would want to put an end to them.
Instead, both Democrat and Republican aim to double down.
Donald Trump came out at the end of last week claiming that Joe Biden had knocked off his great – it’s beautiful, really – economic plan. Biden “plagiarized” him, he said.
This is not surprising. When you have a winning election hustle, both parties are likely to want to use it. Here in Argentina, for example, the election strategy that works is pretty simple:
Destroy the economy with taxes and regulations… make people dependent on the government… and print money to provide giveaways to the urban masses.
Former Argentine president Juan Perón proved that it worked in the 1950s. Since then, hardly anyone has won the Pink House (the Argentines’ version of the White House) without following the program.
The appeal of free money was so strong that competing parties quickly collapsed. Instead, Perón’s ruling party split into two factions – right-wing Peronists and left-wing Peronists.
One pitched its program to culturally conservative elements. The other aimed for the more liberal market. But both stuck to the essential playbook – promise, print, go broke.
Illusion and Fraud
And now, in both Trump’s plan and Biden’s proposal, we see the ghost of Juan Perón.
We also see that former governor of Alabama George C. Wallace was ahead of his time with his comment that between Republicans and Democrats, there wasn’t “a dime’s worth of difference.”
Both aim to seduce the common marginal voter with an illusion and a fraud: that the federales can make people better off by rigging the economy as they please… and passing out printing-press money.”
Chuck again… As usual only Bill can put his thoughts down for everyone to read and understand… He’s truly a master wordsmith…
Market Prices 7/15/20: American Style: A$ .7009, kiwi .6567, C$ .7365, euro 1.1435, sterling 1.2627, Swiss $1.0640, European Style: rand 16.6055, krone 9.3264, SEK 9.0562, forint 309.05, zloty 3.9095, koruna 23.2770, RUB 71.00, yen 106.91, sing 1.3885, HKD 7.7518, INR 74.97, China 6.9969, peso 22.31, BRL 5.3915, Dollar Index 95.94, Oil $39.75, 10-year .63%, Silver $19.35, Platinum $832.00, Palladium $2,034.00, and Gold… $1,817.00
That’s it for today… Already, it’s the middle of the month! Time sure flies when you’re having fun, eh? HA! Well, I got to watch some real live baseball last night, as the Cardinals played an intrasquad game that ended in a scoreless tie after 5 innings… The main concern everyone has for the Cardinals this year is how will they score runs? And if last night is any indication, I would say that everyone’s concerns are real…. Ok, we’re getting close enough to the time that I will talk about about it… Next week, there will only be two Pfennigs, and then none for the next 2 1/2 weeks, as I will be on Chuck’s summer vacation! So, get all of me while you can! HAHAHAHA! I’ll be here tomorrow though, God willing, and the Creek don’t rise! Oh, I saw that 9 out of 10 native Americans say they didn’t pay any mind to the Washington Redskins name, and it didn’t bother them… I shake my head in disgust of what’s going on folks… Well, with that bit of upbeat talk from me, Marvin Gaye takes us to the finish line today with his song: Mercy, Mercy… I hope you have a Wonderful Wednesday and will continue to Be Good To Yourself!
Chuck Butler