June 6, 2019
* The dollar bugs fought back on Wednesday…
* ECB meets today.. Will they see the writing on the wall?
Good Day… And a Tub Thumpin’ Thursday to you! It’s also D-Day… Yes, on June 6, 1944, the largest seaborne operation was put into place on the beaches of France… If you’ve ever seen the movie Saving Private Ryan, you would have an idea of what that invasion ran into on those beaches… With all the taking down of statues from our history these days, I’m surprised they still allow this day to be observed… I’m just saying… Another rain delay last night for my beloved Cardinals… And the game was finally postponed.. Poco greets me this morning with their song: Good Feeling To Know… “Yes, it’s a good feeling to know… somebody loves you”
In a case of See I told you…. The dollar fought back yesterday, but, not because the data prints were kind to the dollar bugs… Factory Order for April were negative -0.8%, and the ADP employment report showed only 27,000 jobs created in May… That has to be typo… but then the folks at MarketWatch sent me a note talking about this being the slowest month of job creation in 9 years! The architect of the ADP , Mark Zandi, had this to say about the report… “The economy’s weakening, this number overstates the case,” he went on to add: “Growth is slowing, and it’s slowing very sharply and Business capex is dead in the water.”
So… no such luck in having the dollar bugs stay away for more than 2-3 days… The Fed is talking about cutting rates… We have a two-headed Trade War Monster going on, with the possibility of the 3rd head joining, The economic reports are flashing “recession” “recession” “recession”, and yet, the dollar won’t succumb to the currencies for more than 3 days…
Since we’ve gone down the data rabbit hole, we might as well keep going, eh? The U.S. Data Cupboard today will have the April Trade Deficit, which won’t show any gains, most likely… And the 1st QTR Labor Costs data will get a revision, and that revision will most likely be a big fat negative number!
I told you earlier this week that on Wednesday the Fed heads were holding a Fed Policy Conference in Chicago… And these are highlights from that meeting that Bill Bonner printed…
We [FED] are closely monitoring the implications of recent developments [tariffs] on the U.S. economic outlook”
“We [FED] will act as appropriate to sustain the expansion”
“FED policy remains data dependent”
“Persistently low inflation could lead to downward drift in expectations”
Chuck again… Wow! I told you yesterday that the stock jockeys had nothing to fear that the Fed’s got your back, Jack! And now we know that even more!
OK… on to something else! Gold was up over $9 yesterday morning to $1,334, it ended the day up $4… UGH! The shiny metal is up more than $5 this morning, so let’s see if they can be held on to, or added to… I wish I didn’t have to talk like that, but with price manipulators waiting around every corner… I’m sheepish to talk brazenly about a Gold move…
In Australia yesterday, the Reserve Bank of Australia (RBA) cut rates ¼% or 25 Basis Points. This was their first rate move in 3 years… But with the Trade War effecting China so badly, I can see where the RBA felt the need to cut rates… Although I’m no fan of debasing currencies… But I can see it here, and the currency traders didn’t get too upset by the news, causing only some minor slippage in the A$…
Another reason the RBA may have sprung a rate cut on the markets by surprise is that just the other day there was an article that stated that Australia’s 26 years of no recession, could be coming to an end… All that was based on how bad the China slowdown will hurt the Aussie economy…
How many readers recall me telling them years ago that when the real weak dollar trend becomes a reality, the forint, zloty, and koruna will be front and center in the moves against the dollar… In fact, when they begin to really move strongly, you can be assured a new weak dollar trend is in place…
Just to whet our whistle… All three of these what I coined years ago as the “Euro Wannabes”, have been moving steadily stronger Vs the dollar in recent trading… You can bet your sweet bippie that I’ll be keeping an eye on these three… for signs that the weak dollar trend, has taken hold…
The European Central Bank (ECB) is meeting today… Will we get hawkish Draghi, or dovish Draghi? I’m thinking that the ECB can red the writing on the wall, that they are stuck in the middle… Clowns to the left of me, jokers to the right, here I am stuck in the middle with you! (Gerry Raferty) And that will make Draghi sound dovish today, which won’t help the euro in the near term…
Speaking of the euro, I read a report on Reuters that talked about the euro climbing to 1.17 by next year… Of course they based that forecast on their belief that the U.S. economy will be going into recession in 2020… So, just move that up by 6 months, in my opinion! Recall I said that I believed the U.S. would be in recession in 2019… I’ve still got more than 5 months before the clock strikes 12…
Let’s review really quick what should be the nails in the dollar’s coffin… First of all we debt coming out of our ears, not just the Gov’t, but Corporate, and Individual… We have a Central Bank that doesn’t have a clue… We have a Trade War going on with two different trade partner countries, with a 3rd simmering on the stove… We have an economy that has been in a growth, albeit very slow growth, but growth nonetheless, cycle for more than 10 years, and getting very long in the tooth… We have a Treasury yield curve that has inverted, which normally is a strong indicator that a recession in near… Those same Treasuries are seeing Central Banks around the world discontinue to buy them… We have pensions underfunded by billions of dollars… We have Corporate Debt issuance that’s mostly BBB, near junk, hanging over the economy like the Sword of Damocles, and there’s more, but my fingers are getting tired! HA
And under this umbrella of things that should be weighing on the dollar, the dollar bugs won’t give up the ship on a strong dollar… All I’m going to say here is that just isn’t kosher, and won’t last too much longer in my book…
Longtime readers know I don’t trust the government’s data reports, and rely on what John Williams of shadowstats.com says… And what I feel, and see as to what is happening every day in the economy. Well, for the FWIW article today, I have an article that talks about “shadow accounting” that the Gov’t uses… it’s very interesting so you don’t want to skip over that!
Before we head to the Big Finish… I have something I want to share with you… I recently mentioned that I own an annuity and how easy it is for uneducated buyers to get ripped off. Friend, and RetireMentor Dennis Miller has published a 63-page comprehensive Annuity guide. He pulls no punches. It’s the only material I have seen that is not written by someone who is trying to sell them.
You can find more information here. https://milleronthemoney.com/product/annuity-guide/ If you are interested, enter the discount code CHUCK and Pfennig readers will receive a 25% discount.
To recap… The dollar bugs fought back on Wednesday… See? they can’t say away for more than 3 days! But Chuck lays out all the major things that should be weighing on the dollar… How much longer can the dollar bugs remain in control? The ECB meets today, will we get hawkish Draghi, or dovish Draghi… Chuck believes it will be the latter of the two… And the RBA cut rates yesterday, their first rate move in 3 years!
For What It’s Worth… Well as previously advertised… This is about the “shadow accounting” that the gov’t uses… See? Chuck was right all these years regarding not trusting the Gov’t data reports… And it can be found here: https://www.zerohedge.com/news/2019-06-04/bipartisan-support-secret-accounting-hide-missing-black-budget-money
Or, here’s your snippet: “Investment advisor and former Assistant Secretary of Housing Catherine Austin Fitts says when it comes to making government accounting secret, there is widespread bipartisan support.
Fitts explains, “If you look at FASAB rule 56, it was approved by both the (Trump) Administration and the bipartisan (Congress) on the same week that everybody was screaming about Judge Kavanaugh. It was passed we had all the hearings on Mr. Kavanaugh’s teenage sex life. At the same time everybody supposedly looks like they are fighting, we had a bipartisan Congress and Administration pass this very quietly underneath the attention given to the Kavanaugh hearings.”
Why did both parties “quietly” pass FASAB rule 56 that makes federal budgets secret? Fitts says:
“Since WWII, we have been building secret financial operations, whether it’s the ‘Black Budget’ or what some people call the ‘hidden system of finance.’ Secrecy is a huge financial addiction. I think every member of Congress does not see a way to kick the can down the road without becoming more and more extreme in tactics. I called FASAB 56 ‘secret money for secret armies.’ The same week that passed, an ad came out in one of the mercenary magazines that said ‘Blackwater is coming.’”
Just because trillions of dollars are “missing” and the federal budgets are now “secret” doesn’t mean you cannot see the effects of all the massive amounts of money created. It’s is showing up in the form of inflation, not official inflation calculated by the government, but real inflation for the man on the street. Fitts contends, “The U.S. dollar is getting debased…”
Chuck Again… Joe South sang… The games people play now, every night and every day now, never saying what they mean, never meaning what they say…
Currencies today 6/6/19 American Style: A$.6976, kiwi .6625, C$ .7462, euro 1.1230, sterling 1.2700, Swiss $.9956, European Style: rand 14.8959, krone 8.7150, SEK 9.4380, forint 286.01, zloty 3.8077, koruna 22.8410, RUB 65.15, yen 108.23, sing 1.3650, HKD 7.8405, INR 69.19, China 6.9074, peso 19.71, BRL 3.8628, Dollar Index 97.23, Oil $52.08, 10-year 2.10%, Silver $14.95, Platinum $806.42, Palladium $1,337.94, and Gold… $1,335.53
That’s it for today… Our Blues are back on the ice tonight this time in Boston… Let’s Go Blues! This having 2 days between games, to me, removes the enthusiasm and then it has to be rebuilt as the game goes on… UGH! Cardinals game is postponed last night, which takes care of a problem they had for Sunday… They needed a pitcher for Sunday’s game, but not now, the just push all the pitchers back a day… I have tickets for today’s day game at Busch… let’s hope the rain stays away for the game! Thanks for all the notes to me regarding my cellulitis in the leg… Crazy stuff, and with me it’s always something, right? That’s why they call me, Mr. Lucky! Toad The Wet Sprocket takes us to the finish line today with their song: Walk On The Ocean… I hope you have a Tub Thumpin’ Thursday, and will continue to Be Good To Yourself! Oh! And good luck tomorrow Toni!
Chuck Butler