June 22, 2021
* Currencies & metals rally on short coverings on Monday
* The price of Oil continues to rise…
Good day… And a Tom Terrific Tuesday to you! My beloved Cardinals had a day off yesterday, so I was a lost soul last night not having my Cardinals on TV to watch! UGH! But I survived! We had major storms come through on Sunday night, and the temps have cooled, which is a great reprieve from the oppressive heat we had last week… Don’t get me wrong, I’m always saying I love warm weather, but oppressive heat I can do without! I like to sit outside, and read, under the sun, soaking up Vitamin D, but not when it’s so hot! OK… moving on… Man I did something to my trap muscle in my neck area, and it reminds me every time I move my left arm… Silly stuff… But you know, with me… it’s always something! Brian Setzer plays his rendition of the old Santo and Johnny song to greet me this morning: Sleepwalk… Which is something I feel like I’m doing some mornings! HA!
Well… Short covering was the order of the day yesterday, and those buys to cover the shorts were the main reason, along with investors taking advantage of the excellent buying opportunities, Gold finally had a positive day price-wise, in what seemed to be a Blue Moon.. Gold started the day up $19 yesterday morning, and then during the morning session, it dropped to being up just $10. But it recovered in the afternoon, and ended the day up $19.60 to close the day at $1,784.70, and Silver gained 14-cents on the day to close at $26.04
The currencies came back with a vengeance yesterday, and stormed through the day acting like they were getting revenge on the dollar for last week… The euro climbed back above 1.19 on the day, and all the other currencies followed the Big Dog euro… The BBDXY which ended the day on Friday at 1,144.82, ended the day on Monday at 1,139.99, so a large slide there, and the Dollar Index which closed at 92.22 on Friday ended the day on Monday at 91.85… I had told you yesterday that Gold was oversold, and it proved to be just that on Monday… It’s still quite oversold, but at least we had one day of recovery…
So, last week was put to bed, and it was all a case of propping up the dollar… You know, if little old me in the Midwest can see that the dollar was heading south, then the Ivy league propeller heads up East can see it too, and they proceeded to render the situation null and void… But if my thoughts are correct, they’ll have to keep coming back to correct the dollar’s slide over and over again as we go forward… The Exchange Stabilization Fund, (ESF) has Billions of dollars to spend to prop up the dollar, so it’ll all be a opportunity, whenever the Plunge Protection Team decides to spend some ESF money, and bring the currencies, Gold & Silver all down, to pick them up at some bargain prices, once the PPT has finished…
Just for the record…. The Treasury Dept. describes the ESF like this: The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that “the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities.
Just in case anyone out there doesn’t believe me when I say the ESF is propping up the dollar!
Oh, and for the record, the ESF last year was given $500 Billion in the Cares Act…. That’s either comprised of fake money, printed up on the go, or tax dollars, folks…
Ok, moving on… In the overnight markets last night, there was some additional dollar buying, as if the Asian and European traders didn’t get the memo yesterday, that the dollar buying was over! The euro slipped back below 1.19, but Gold & Silver are holding to their gains from yesterday. Gold is flat to up a buck or two, and Silver is up a wooden nickel…
The price of Oil this morning, is trading with a $73 handle… So, lumber may be seeing price declines, but the price of Oil isn’t, and this commodity is used by everyone so its price increase hurts the buying power/ disposable income of everyone!
The Petrol Currencies for the most part, are doing better this morning, as the Norwegian krone, Brazilian real, and Canadian dollar/ loonie, are all stronger this morning. The usual leader of the pack, The Russian ruble, has stumbled back above the 73 figure… I guess the BIG SUMMIT between the POTUS and Putin didn’t solve any of the problems that are going on between the two countries… Did you think it would? I figured from the first I heard of it happening, that it was just a photo op…
I’m sure that Putin tried to get Biden to ease up on the sanctions, but Biden has his marching orders from the Deep State, to keep the sanctions in place, and so that was that…
Moving on… Recall a couple of months ago, when I reported that the FBI had seized safety boxes of individuals in Las Angeles, and how lawyers were saying that it was unlawful to do so? Well, here’s the follow up from G. Edward Griffen’s Need To Know site: “Beverly Hills: A class-action suit claims FBI exceeded its search warrant in March and took possession of the contents of about 800 safe deposit boxes kept with storage provider US Private Vaults (USPV), which was indicted for conspiracy to sell drugs and launder money. However, the owners of the boxes are not accused of committing any crimes. The search warrant only authorized the FBI to inspect the safe deposit boxes to “identify their owners in order to notify them” about claiming their property. Owners’ boxes have been seized under civil forfeiture proceedings and the civil forfeiture notices said the feds can deny return of the items if it judges the responses are not filled out “correctly.”
So, it will be interesting to see how this all plays out… Either way, it does make you question what’s going on here, right? Is the FBI above the law? And the other question is where can you store valuables without subjecting them to FBI searches?
Not that the safe boxes seizure has anything to with markets, so I digress here, and I apologize…
The U.S. Data Cupboard remains basically empty today, with only some housing starts data to print… But there is one thing on the docket today that has the markets wondering what he might say again, and that is a testimony by Fed Chairman, Powell to Congress on the pandemic… and its effects on the economy…
I don’t need no stinkin’ Fed Chairman to tell me the effects of the pandemic on the economy… Or rather the effects of shutting down the entire economy for longer than two weeks… Supply Chain disruptions are the bugaboo for trade, and this will continue for at least the rest of this year folks… Which will keep the inflation rate high..
You know back in the 1970’s when Gold had a decade of price increases, there was no Exchange Stabilization Fund, and the likes of Kissinger, and others at that time hadn’t quite figured out how to stop the price increases, but they knew they had to do something, or the dollar would collapse… They eventually figured out to manipulate the price of Gold, and the rest is history…
So, when inflation was soaring in the 1970’s and Gold was keeping up with the inflation increases, the markets traded like free markets, and not the manipulated markets that we have today… For if we did, Gold would be soaring right now, in the face of the high inflation rate in the U.S. And the dollar would be getting sold like funnel cakes at a State Fair! I’m just saying…
Things are just so strange these days, that I sit here in the morning and attempt to make sense of it, and find most days that I’m at a loss… For things are so strange, there’s no excuse for their actions… But I know, and I think you do to, that there’s something seriously wrong going on in this country, and that at some point it will come to a head…
To recap… The currencies and metals rebounded somewhat on Monday, as short covering helped Gold & Silver recover some lost ground from last week, and the currencies all acted like they were getting back at the dollar for last week’s debacle… Powell gives a testimony to Congress today, and the price of Oil continues to climb higher, trading this morning with a $73 handle.
For What It’s Worth… I have a snippet today from long time friend, successful publisher, and best selling author, Bill Bonner, who does a great job of explaining what’s going on each day, and yesterday, he was talking about a 5 year forecast, and it can be found here: The Feds’ Five-Year Economic Forecast | Rogue Economics
Or, here’s your snippet: “But in the meantime, as the inflation twister draws closer, investors will become unsettled.
A study by economists at investment research firm Gavekal shows that rising inflation levels means falling stock market gains:
For the last 130 years (the period for which we have data both for U.S. prices and for the U.S. stock market), all the excess return on U.S. equities relative to cash have been realized during periods of decelerating inflation. The excess returns during periods of accelerating inflation have been a robust zero.
They go on to say that since World War II, every major bear market (with a drop of 50% or more) has come during a time when consumer price increases are speeding up.
Which should investors fear – a crash or inflation?
The answer is… both.
And herewith our simple Five-Year Forecast:
The feds will inflate. The stock market will deflate.
And then… the feds will inflate even more…
…until the inflation tornado has made a wreck out of everything.”
Chuck again… Yes the Feds will inflate more… as of right now there’s talk of another $6 Trillion deficits spending plan… That, in case you don’t know, is money we don’t have, so to spend it we’ll have to create it… And Milton Friedman said it oh so many years ago… Central Bank money supply feeds inflation…
Market prices 6/22/2021: American Style: A$ .7516, kiwi .6986, C$ .8074, euro 1.1897, sterling 1.3884, Swiss $1.0870, European Style: rand 14.2979, krone 8.5882, SEK 8.5493, forint 297.48, zloty 3.8084, koruna 21.4670, RUB 73.03, yen 110.47, sing 1.3458, HKD 7.7653, INR 74.22, China 6.4638, peso 20.56, BRL 5.0604, BBDXY 1,142.96/ Dollar Index 92.04, Oil $73.15, 10-year 1.48%, Silver $26.10, Platinum $1,065.00, Palladium $2,643.00, Copper $4.14, and Gold… $1,786.40
That’s it for today… Last Friday, was an anniversary of sorts for me… It marked 14 years since I had my first major cancer surgery. It’s been 14 years since I was diagnosed with Stage 4 metastatic renal cell carcinoma (kidney cancer). And next week will mark the 14 years since my second major cancer surgery. Time flies when you’re having fun right? Well, these past 14 years seem like the first 50 years I was on earth! But I’m still here… still kicking, still loving life, family, friends, baseball, and pizza! There are many people to thank for me still being here, first and foremost, the Good Lord, then my wife, and kids, the doctors who have looked over me, my friends, the different medicines I’ve taken, and the people that have prayed for me… And I can’t forget my old boss, who allowed me to continue to work, even with my missed days, short days, and time away to have scans etc. Every day is a blessing for me… And I try to make the most of the day… By first writing this letter… And with that, we’ll head to the finish line today with a song by John Lodge and Justin Hayward (Blue Jays): I Dreamed Last Night… (one of my all-time fave songs) I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!
Chuck Butler