September 14, 2021
* Currencies gain back their Sunday night losses
* Petrol currencies moving higher with the price of Oil…
Good day… And a Tom Terrific Tuesday to you! Well, after that “draggin’ The line” feeling I had yesterday morning, I spent the rest of the morning wanting to go back to sleep… I finally succumbed to Mr. Sandman, in the afternoon, and when I awoke, I felt so much better! When I was a young man, I would scoff at anyone that needed an afternoon nap… We all probably did that… But, I figure now, that with all the stuff I’ve been through, I deserve a nap when I feel the need! HA! Basically, your body tells you when you need to sleep, and I’ve become so good at listening to what my body is telling me… Eddie Money greets me this morning with his song: Take Me Home Tonight…
Well, all the dollar buying that went on Sunday night into Monday morning, was brought to a stop in the U.S. session yesterday…. Go figure… The BBDXY, dropped from 1,147.93 in the morning to 1,145.53 at the close… The euro rose back above the 1.18 handle, and Gold found a way to gain $6.70, while Silver only gained 3-cents on the day… I said yesterday that I would attempt to find out why the overnight markets were so bullish on the dollar, but… there really was nothing to speak of, out there that explained this scenario… So, the foreign markets bought dollars, and the U.S. market sold dollars, isn’t life strange? A turn of the page, can read like before, can we ask for more? (Moody Blues)
In the overnight markets last night… The traders overseas thought, why buy dollars again when their brothers-in-arms just reversed everything they had done the night before… So, as far as the currencies were concerned there was little to no movement overnight. The BBDXY is trading in the same clothes as it wore yesterday at the close, 1,145.84, and the Dollar Index is 92.62…
Gold, on the other hand, is not faring as well as the currencies, and is seeing selling this morning to the tune of $7.50… Gold closed yesterday at $1,794.50, so, with the selling this morning Gold is trading at $1,787.00, a relatively cheap level folks… And Silver is not faring any better, having closed yesterday at $23.81, it has given back 18-cents in the early trading to trade at $23.63…
With the price of Oil now nearing $71 the Petrol Currencies have finally taken the flyer and begun to rally along with Oil… The Russian ruble leads the Petrol Currencies higher, and joining in is the Canadian loonie, the Norwegian krone, Mexican peso, and pound sterling, with the Brazilian real not being allowed to participate, just yet…
The Commodities are moving higher in price again folks… The inflation indicator, Copper, is pushing the price envelope and trades this morning at $4.30… But that’s not the only commodity that’s indicating inflation is rising, and Bloomberg’s Commodity Index shows a 25% YTD return… But I’m more interested in the recent run higher in commodities… And you should be too…
So, today is the day that we see what the cooks and massagers think is the right amount of consumer inflation to report… I always call the consumer inflation report the “stupid CPI” because it’s stupid… It’s cooked, it’s massaged, it’s manipulated, and it’s worthless to you and me… No wait! It’s not worthless, but pretty darn close to being worthless… The thing it does do for people that know the history of the CPI, is it’s a indicator of two things… 1. How much inflation the gov’t wants to show us exists, and 2. Just how much the number is manipulated…
These days all markets are manipulated, and we’re getting to the point that a lot of data is manipulated too… When John Williams at www.shadowstats.com says inflation is really around 14%, but the Gov’t tells us it’s only 4%, you’ve got a very good idea how much the inflation data is manipulated…
What would it hurt to show people what the real inflation number is without having to subscribe to Shadowstats.com to know? Well, basically, inflation fears, begets higher inflation… if Joe six-pack sees hears that inflation is rising, he will jump at the opportunity to go out and buy that new refrigerator before its price rises… And that causes additional price rises, and pretty soon, you’ve got runaway inflation… That is unless you have a prudent Central Bank that has its hands on the interest rate lever, And we all know that we don’t have a prudent Central Bank…
Oh, and speaking of our Central Bank, or Cartel, as I prefer to call them… We sure haven’t heard much follow up talk regarding Tapering since Cartel Chairman Powell, first spoke the “T” word at the last meeting, now have we? I think that as the coming weeks go by, we’ll be hearing less and less about the need to Taper from the Cartel… They will be “Tapering” the “taper” talk!
It all depends on what the Elite wants the Cartel to do… The Cartel gets their marching orders from the Elite, and it all depends on what they want to see going on in the economy, folks…
Circling back to Gold getting sold this morning… I look at this and think that the price manipulators are at work here, to take a little off the top, because they know, or strongly believe that the Consumer Inflation Index (CPI) is going to show how strong inflation is (according to the bean counters and all their hedonic adjustments) , and they think that this will push Gold’s price higher… Therefore, take it down now, and when it rallies later, the net move will be flat… That’s how I see it playing out this morning…
So, the House has released the details of their tax plan… Tax and spend, has been the mantra of the Democrats for a long time, and they didn’t want to mess with that mantra.. I have something for you in the FWIW section today that goes with this discussion here, that you won’t want to miss! One of the items in the tax plan, that will be used to pay for the $3.5 Trillion deficit spending plan, is a change in the taxing of the cryptocurrencies, putting them in the same category as other investments…
The U.S. Data Cupboard today, has the aforementioned stupid CPI, and Core Inflation for August… We’ll also see the color of the Small Business Index, which I would think would be weaker in August… No matter what the CPI shows us today, the real inflation number will be much higher folks… And as long as the folks that put together the CPI keep showing it lagging, the Cartel can point to it and say that inflation is not a problem… And we, you and me, and the guy down the street that mows his lawn with his shirt wrapped around his head, get to pay for the Cartel’s ignorance to this problem… I’m just saying…
To recap… The selling in the overnight markets Sunday to Monday, was reversed by the U.S. traders yesterday, as the currencies recovered their lost ground, and Gold gained $6.70… In the overnight markets last night, the traders thought why did we buy dollars only to have them sold? So, the currencies were flat overnight last night, but Gold is getting sold ahead of the CPI print this morning, and Chuck has his thoughts on that!
For What It’s Worth… Well, good friend, Dennis Miller and Chuck did an article together about a month ago, where we looked ahead 5 years and described what I saw for the country… In this article I talked about the U.S. Gov’t ending their programs like Social Security, and Medicare or at least making them unattainable, because they didn’t have the money to pay for them… Well, it’s starting folks…. the changes to how you and me make money and retire… That’s what this article is about, and it can be found here: House Democrats propose new retirement plan rules for the wealthy (cnbc.com)
Or, here’s your snippet: “House Democrats proposed a slew of changes to retirement accounts for the rich on Monday, part of a restructuring of the tax code tied to a $3.5 trillion budget plan.
Taken together, Democrats’ reforms aim to erode the use of retirement accounts as a perceived tax shelter for the wealthy and instead promote them as a way for low- and middle-income Americans to build a nest egg.
Wealthy individuals with retirement accounts exceeding $10 million would be prohibited from contributing extra savings and would have a new required minimum distribution each year, according to an outline of tax legislation unveiled Monday by the House Ways and Means Committee.
The bill would also repeal so-called Roth conversions in individual retirement accounts and 401(k)-type plans for those making more than $400,000 a year. It would also prevent savers from using the “mega-backdoor Roth” strategy, regardless of income level.
Further, the legislation would prohibit individual retirement accounts from holding investments that require buyers to be accredited investors, a status generally reserved for wealthy investors.
The proposals are part of a broader theme of raising taxes on those who earn more than $400,000 a year to help pay for education, climate, paid-leave, child-care and other measures while also making the tax code more equitable.”
Chuck again… This is just the start folks… Things will be quite different for investors and retirees in 5 years… Got Gold?
Market price 9/14/2021: American Style: A$ .7335, kiwi .7113, C$ .7908, euro 1.1808, sterling 1.3869, Swiss $1.0845, European Style: rand 14.2170, krone 8.6024, SEK 8.5874, forint 296.36, zloty 3.8549, koruna 21.4817, RUB 72.88, yen 110.10, sing 1.3431, HKD 7.7786, INR 73.62, China 6.4514, peso 19.89, BRL 5.2323, BBDXY 1,145.84, Dollar Index 92.62, Oil $70.97, 10-year 1.33%, Silver $23.63, Platinum $954.00, Palladium $2,127.00, Copper 4.30, and Gold… $1,787.00
That’s it for today… Another shorter version of the letter today… I find myself thinking I’m starting to sound like a broken record some times, and I certainly don’t want to do that! Well, looky here… What a week ago I thought to be the end of my beloved Cardinals chances to make the playoffs, has them only 1/2 game out this morning after their win last night VS the Mets… Now their chances have become real… I don’t believe it myself, but the other teams in the race have folded like a cheap lawn chair, giving the Cardinals an outside chance, that they’ve taken advantage of… They’ve got to keep winning… The early fall weather here has been fantastic, and I’m loving it! Bill Withers takes us to the finish line today with his song: Lovely Day… what an appropriate song for today! I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!
Chuck Butler