May 17, 2021
* Currencies & metals have good rallied on Friday
* Kitco.com allows Frank Holmes to talk price manipulation!
Good Day… And a Marvelous Monday to you! It’s Tax Day… and Pfennig Tradition calls for this: Should five percent appear too small Be thankful I don’t take it all ‘Cause I’m the taxman Yeah, I’m the taxman- The Beatles!
What a disastrous weekend for my beloved Cardinals! They got swept by the Padres out in San Diego. I had just been talking about how the Cardinals pitching was doing so well, and then they went West and walked 26 batters in 3 games! Baseball is a difficult enough game to win without putting so many runners on board! It was a kind of yucky weekend here weather wise, and this whole week is supposed to be about the same! UGH! I’m still waiting for consistently warm May days… My cold is gone… all that remains is the muscle pain in my stomach… Steely Dan greets us this morning with their song: Kid Charlemagne….
Well, Friday was a good day for the currencies and metals, folks… It all came about as a reaction to the bad data that printed on Friday… More on the that bad data below…. Well, it took about a week for the euro to get back to the 1.21 plus area, but it finally rose above 1.21 on Friday… About a week ago we had the PPT come in to defend the dollar, and that brought the euro back to the 1.20 range. So, the Big Dog (euro) is eating again, and gobbling up dollar bugs! The BBDXY was down a few shekels on Friday, opening the day at 1,125.08 and ending the day and week at 1,121.04… It’s taking me some time, but I’m getting used to using the new Dollar Index that includes the Chinese renminbi/ yuan.
Gold & Silver had a good day on Friday too… Gold rose by $17.40, to end the week and day at $1,844.90, and Silver rose on Friday by 34-cents, to close the day and week at $27.54…The Price of Oil was up on Friday, So, all in all a good day for the anti-dollar assets… It too took Gold & Silver a week to get back to where they were before the engineered takedown by the PPT… So, hopefully, everyone that wanted to buy at cheaper levels, got in, last week, while the getting’ was good!
So, we start the week with the overnight markets last night… And in those overnight markets, the dollar has slipped a bit more, and Gold is up $6.90, and Silver is up 22-cents… This is going to be a strange week in that there is little to no real economic data that’s printing, and so the markets will be looking at other things to trade off of… News like more stimmy checks, or inflation news, etc. Traders will have to search far and wide for anything to get them going in one direction…
So, basically, what I’m saying is that I don’t think we should look for any major moves in the currencies & metals this week, which is fine with me, in that as long as the general direction moves upward in a slow, stealth-like manner, as to not ruffle any PPT feathers, is just fine with me!
OK, circling back to Gold… the folks over at Kitco.com do a great job of reporting prices, writing articles and research on metals, but one thing they’ve avoided all these years is any acknowledgement of price manipulation of Gold… but that all changed last week, when long time Gold Fund Manager, Frank Holmes, was interviewed and went straight for the jugular with price manipulation, and Kitco.com printed it! Here’s a snippet of Frank’s talk : “Governments and central banks might have an interest in “stabilizing” gold prices in order to maintain public confidence, which may be an explanation as to why the gold price did not move up on the release of last month’s headline record inflation data said Frank Holmes, CEO of U.S Global Investors.
Headline inflation came in at 4.2%, the highest since 2008.
“The threat of gold exploding would basically say they’ve lost control, and I really think there’s some kind of stabilization, if you want to call it,” – Frank Holmes
I met Frank Holmes many years ago, and had dinner with him and Thom Calandra in Las Vegas… And then we never crossed paths again… Strange how that all works out, eh? But I’ve read his articles through the years, for he knows what’s going on, and is unafraid to talk about it… Sort of like someone else I know quite well… ME!
So, in my mind, if the folks at Kitco.com are willing to print an article that talks about price manipulation in Gold, then the whole price manipulation story is coming more to light… The spotlight isn’t on it yet, but it’s about half-way… If the Corprations and hedge Funds and Pensions and Insurance companies would all stomp their feet and complain about price manipulation, the media would finally admit that it exists, and write about it… Unfortunately, the day I see that happening is the day I’ll be turning over in my grave… I sure hope it doesn’t take that long, but since none of these groups have even hinted that they are unhappy with price manipulation, it’s going to take some time…
Well… I finally filed my taxes on Friday… It’s all different now that I’m retired and my income consists of Social Security, and some investments… I don’t know what took them so long to get them done, but I’m just glad I don’t have to do it any longer! Game time is on time, right?
The Cardinals of a long time ago, had the great power hitter, Richie Allen for one year… And it was a year that the Cardinals were out of the pennant race in August… The reporters would ask Richie how his knee felt, and he would reply, “It fells like 8 games out of first place”… that’s funny now after all those years gone by, but I doubt it was funny then…
OK… onto other things… I saw a blurb on Google on Saturday, that said, “2020 tax filers will receive a supplemental stimmy check”… Wait! What? Enough is enough! Stop this madness before everyone is holding out their hats waiting for another stimmy check, that’s really nothing but fake money, as it was never earned by anyone, instead the Gov’t just made some computer entries and voila! It’s in your bank account.
I’ve long banged on the drum and shouted from the rooftops that the U.S. Gov’t needed to only spend money they had collected in taxes… Deficit spending came about because there was no anchor preventing it… Gold had been replaced by the “Debt Ceiling”, which used to be a bunch of show for the people to make them think our elected officials were serious about it… But every time the debt ceiling was reached, it was thrown to the curb, and a new debt ceiling number was announced… These days, we don’t even have the dog and pony show for the Debt Ceiling any longer… It’s a Deficit Spending Palooza… And that, folks, is going to be end of the financial system that we all love… bye, bye…
The U.S. Data Cupboard on Friday last week, as I said above, was to blame for the dollar weakness, and April Retail Sales were flat 0.0% after the large March number, which I had explained last month was due to the stimmy checks… In addition we saw Industrial Production fall in April from March’s 2.4% to just .7% in April… And then finally, the Consumer Sentiment report for the first two weeks of Mayl fell… can you believe that one? Well, it did… from 88.3 to 82.8… I guess that weakness in Bitcoin caused that!
So… all in all, the data from last week was not good, and very sketchy… Uneven if you will… And that doesn’t spell a strong economic recovery, and I can hear the naysayers of inflation yelling from the rooftops that inflation is only transitory… But like I keep telling you, dear reader, this is not your father’s cyclical inflation… This is systemic inflation, the kind that caused by money printing, and stimmy checks… That’s my point and I’m sticking to it!
This will be a week of no real economic data printing… Yes, we’ll still have the Weekly Initial Jobless Claims print on Thursday, but even this print has become hold news, as the claims have been falling for weeks now… The problem here is while the Claims may be falling there’s still 16.4 Million receiving Unemployment benefits… Yikes! So, most of the data this week will be housing stuff, which we all know is getting oh-so similar to 2007….
To recap… The currencies, metals and Oil all rallied on Friday, on some very weak economic data in the U.S. Chuck points out that it took the euro and gold about a week to get back to the levels they traded at before the engineered takedown by the PPT…. So, there was about a week of buying at a cheaper levels in place… Chuck makes a Big Deal out of the fact that Kitco.com printed an interview with Frank Holmes who talked about price manipulation, something that Kitco had not done previously… And the data cupboard is basically empty this week with some housing data, and the Fed’s meeting minutes.
For What It’s Worth… Well, I talked about this article a couple of times last week, and Thursday it finaly printed. I’m talking about the Dennis Miller article that I did a lot of work on , about looking at 5 years inot the future… And it can be found here: www.milleronthemoney.com
Or, here’s your snippet: “CHUCK: Hold on tight, here we go down the rabbit hole…
So, losing the advantages I outlined would bring about quite a few changes in our economy, our value of the dollar, which affects your buying power, and life as we know it…
Any future weak dollar trend could easily trigger the loss of the reserve currency status, affecting everyone:
- A sudden dollar collapse would create global economic turmoil.
- Investors would rush to other currencies.
- Investors would rush to other assets, such as gold and commodities.
- Demand for Treasuries would plummet.
- Interest rates would rise, and possibly very high.
- U.S. import prices would skyrocket, causing inflation.
- The cost of commodities like Oil would increase.
As an example, I used to compare gas prices. In the U.K., gas costs $8 a gallon as compared to the U.S. being $3. We would all pay what everyone else in the world pays for gas.
Remember when the Beatles appeared on Ed Sullivan in 1963? They showed pictures of their home town, Liverpool, England. Those pictures are as depressing now, as they were then.
The U.K. lost the reserve currency status after World War II; 20 years later they still hadn’t recovered, economically, and psychologically.
The U.S. would probably have to default on some debts; causing a major shift around the world out of dollars, and stocks. I’d expect damage to your investments, psyche and your buying power.”
Chuck again… Part II of this article will be out this Thursday, and I don’t think it’s anything you’ll want to miss… But as my good friend Rick B, said after reading Part 1… “I had to hide away the sharp objects”…
Market Prices 5/17/2021: American Style: A$ .7760, kiwi .7212, C$ .8260, euro 1.2156, sterling 1.4105, Swiss $1.1103, European Style: rand 14.1378, krone 8.2623, SEK 8.3484, forint 289.53, zloty 3.7325, koruna 20.9773, RUB 73.96, yen 109.20, sing 1.3351, HKD 7.7673, INR 73.25, China 6.4318, peso 19.89, BRL 5.2709, BBDXY 1,120.15, Oil $65.50, 10-year 1.62%, Silver $27.76, Platinum $1,234.00, Palladium $2,957.00, Copper $4.63, and Gold… $1,851.80
That’s it for today… Well, I was right, and my wife was wrong…. She said I needed to go to the doctor, that I didn’t sound good… And I told her it was just a cold that would take 10-14 days, and that’s exactly what happened! I’m still dealing with allergies, but that’s nothing unusual… Last Thursday night, I was invited to attended a former colleague’s last day in World Markets… I had hired Antione years ago, and so I was included in the send off… And guess who else was there? My longtime friend, and former boss, Frank Trotter! There will be a family wedding on Memorial Day Weekend, coming up, and Kathy asked me if I had something to wear to a wedding… And I thought, hmmm, good question since I’m down 3 pant and shirt sizes! I guess I had better look into that and not wait until the morning of the wedding! The Band, A-ha takes us to the finish line this morning with their hit 80’s song: Take Me On… The range in this guy’s voice is incredible! Alright, I hope you have a Marvelous Monday, and I trust you will Be Good To Yourself!
Chuck Butler