February 3, 2021
* Currencies can’t find a bid or offer…
* All hail, the almighty Mario Draghi, is back!
Good day… And a Wonderful Wednesday to you! Another cold front has come this far south again, and yesterday, was downright chilly… 61 degrees… And today it’s not supposed to get any warmer, but then that will be it, the cold front will be gone, and warmer, regular weather will return… I’m always amazed when the temp drops this far south… Every Winter from 2001 to 2015, I spent a week in Orlando for the Money Show. Back then Alex was a young boy, and so we would either come early for the show or stay after the show, and go to the Amusement Parks with him… By Age 9 Alex could have had a job as a tour guide at Disney World! A lot of good memories, for sure… The Great Al Stewart greets me this morning with his song: Time Passages…
Well, yesterday I was put in my place with one sentence by the well respected analyst, Dennis Gartman, who said, “I hate to say this but you are terribly wrong regarding Gamestop/Silver/Wall Street and the public.”… Whoa there partner! Just what was I wrong about? Dennis said, “i tried to explain that the firms in question had capital requirements to meet as the single most important imperative.” Well, didn’t I do just that, in the FWIW section yesterday? Oh well, I respect what Dennis has to say, so I’ll be careful going forward!
Dennis did give me this little nugget of info and opinion, “The yield curve continues to widen and that shall of course serve the banks well. The long bond presently yields 1.87% and that is headed toward 3% in the coming several months. The devastation to the bond market will be enormous for the “value of an 01” at these levels is massive.” – Dennis Gartman
OK… For now the dust has settled on all the commotion that went on last week with short squeezes… I read a report/ article yesterday that talked about how the Redditt folks are split on how to go about stopping the short squeeze… that’s no plan in my opinion… But… like I said yesterday, these folks have done a good job in bringing the dastardly things these hedge funds do, to the public’s eye… And Ed Steer tells me this morning, that my thought on the masses buying the silver ETF would require the trust co. to buy mass quantities of physical Silver, is in play as 56.8 Million ounces of Silver was added to the ETF this week… I really don’t want to talk about them or Robinhood or whatever any longer… So, let’s move along, these are not the droids we’re looking for…
Well, there was little to no movement in the currencies yesterday, as the dollar traders remain between a rock and another rock… But the selling in Gold was one of those, “I’ll see your $17 raise in Gold and raise it to a $24 sell off”… I can hear the price manipulators chuckling and saying neener, neener, neener! And Silver, after yesterday’s $2 selloff is now cheaper than it was when the Redditt crowd said they needed to go after the shorts in Silver… YIKES! Say it ain’t so Joe!
There was very little going on overseas yesterday and throughout the night… In fact the news from overseas has basically dried up, and blown away… The European Central Bank (ECB) can’t match the Cartel, I mean the Fed, and The Bank of England (BOE) is still mulling over going negative with deposit rates… China and Russia continue to under mind the dollar at every opportunity that presents itself to them. But there’s nothing new here… We’ve gone in-out-and all about and through China and Russia’s desire to dedollarize… They certainly don’t show up at the Treasury Auction window with empty bags for their purchases of Treasuries any longer… And eventually this is going to come to a head at the Treasury… But for now, things move along…
One thing from overseas that caught my attention was the news that former ECB President Mario Draghi was named the new Prime Minister of Italy.. The markets there are overjoyed, as they believe their savior has arrived… Reminds me of years ago, when Italian legislator, Silvio Berlusconi kept coming back to stage, and each time the people of Italy would rejoice… but things never changed, it was the same-o, same-o all over again… I’m just saying.. This song keeps coming into my brain… My boyfriend is back and you’re gonna be sorry…
After seeing a strong move downward for the 10-year Treasury’s yield, (down to 1.01% last week,) the yield of the bond has moved higher once again to 1.11%… I know it doesn’t seem like much, 10 basis points, but… when dealing with bond, small moves equal recognizable moves in price… And remember bonds trade like this… As the yield goes higher, the price goes down, and as the yield drops the price of the bond goes higher… I was taught at an early time in my career in the Financial arena which began in 1973, that I should always pay attention to what bond yields are doing… Well, in the past year, there’s not been much to watch, and yields dropped to record lows, and have remained low since then, but as Dennis Gartman points out above, the yield curve on the long end is seeing yields rise, thus widening the spread in the yield curve…
Man can you believe that in 2 years, I’ll be celebrating 50 years in finance… I know, I’m retired now, but… I’m still writing about it, so that counts in my book! HA!
I used to tell the audiences when I spoke about my past experience and then say, “I know you are thinking, he doesn’t look THAT old!” HA!
OK… the price of Oil is rising again reaching the $55 handle for the first time in almost a year… I do believe that our friends (NOT!) at OPEC announced another production cut last week, so this is the pop in price they were hoping for… of course about a year ago, when they cut production they announced that they thought the price would rise to $60… But then the world as we knew it ceased to exist… And in the summer of last year, we actually saw a day when the price of Oil went negative!!! But that was a refinery delivery problem that didn’t last… But you get the gist, the price of Oil has had nowhere to rise, due to the lack of demand, which should be picking up again, but still not anywhere near where it was before the third week of March last year.
The U.S. Data Cupboard today has the ADP Employment report for January, a precursor to the Jobs Jamboree which will be held on Friday this week. Let’s circle back to last month when the ADP report printed and showed a negative 123,000 jobs for December… Well, this month the so-called experts think that ADP will show 48,000 jobs created in January… Sill not something to write home about here…
And other than the ADP report, there’s nothing else in the cupboard today… We will have a mass invasion of the Cartel, I mean Fed heads our speaking today… Bullard, Kashkari, Evans, Meister, and Harker will take to the podiums and give their opinions on whatever they decide will be the topic of the day…
I have to say that while in the days gone past that we never even knew who the Cartel, I mean the Fed Heads were, and now they’re out speaking all the time, I really believe that they are losing credibility by the day… I guess we’ll see today, if they say something that should move the markets and we see no reaction from the markets…
To recap… The currencies can’t get out from between two rocks, and yesterday marked 5 consecutive trading days where there was little to no movement in the currencies. Gold & Silver, on the other hand, did move, but in the wrong direction… Reversing the previous day’s gains, Gold lost $24, and Silver lost $2 the day… 56.8 Million ounces of physical Silver were deposited at the Trust Co. for the Silver ETF… But even this news couldn’t cheer up Silver yesterday… The price of Oil is rising, and so are the yields in Treasuries, and all hail! Draghi is back in Italy!
For What It’s Worth… It’s been “Silver Week” here at the World Headquarters for the Pfennig… HA! And so today’s FWIW is about the U.S. Mint’s rationing of Silver coins, because the demand is too strong… And you can find that article here: U.S. Mint Still Rationing Silver Coins Amid ‘Exceptional’ Demand (yahoo.com)
Or, here’s your snippet: “The Reddit-fueled run-up in silver prices might be stalling, but the U.S. Mint said it is still rationing its sales of silver coins because of “continued exceptional market demand,” as well as limited supplies and manufacturing capacity.
The Mint is also allocating gold and platinum coin sales to authorized purchasers, it said in a statement Tuesday. The policy will be in place “for the foreseeable future.”
The mint’s silver coin sales jumped 24% to 4.775 million ounces last month, marking the highest for a January since 2017. The Mint’s announcement comes after retail sites were overwhelmed with demand for bars and coins. Investors on Reddit ignited a buying frenzy that roiled precious-metals markets and squeezed physical supplies. Some dealers said over the weekend that they were unable to process orders until Asian markets opened because of record demand.
Throughout the past year, and in part due to the effects of the coronavirus pandemic, the Mint was unable to meet demand due to precious metal blank availability and plant capacity issues.
The Mint also said it will have a limited production window to produce current design American Eagle gold and silver coins, as it’s scheduled to start production of redesigned coins in the summer of 2021, and coins for that program must be produced in advance of the launch date.”
Chuck again… pity isn’t though, that Silver could be experiencing all this demand and can’t find a bid? I find this example of price manipulation to be what we used to say on the basketball playground… “In your face, disgrace”…
Market prices 2/3/2021: American Style: A$ .7617, kiwi .7195, C$ .7816, euro 1.2016, sterling 1.3635, Swiss $1.1118, European Style: rand 14.9884, krone 8.6319, SEK 8.4328, forint 296.03, zloty 3.7362, koruna 21.5785, RUB 75.89, yen 105.09, sing 1.3335, HKD 7.7511, INR 73.02, China 6.4571, peso 20.14, BRL 5.4008, Dollar Index 91.21, Oil $55.17, 10-year 1.11%, Silver $26.80, Platinum $1,097.00, Palladium $2,312.00, Copper $3.52, and Gold… $1,835.80
That’s it for today… a nice win last night for our Blues, as they held on to their lead at the end with some frenzy play in their end… Well, it’s all systems Go, for MLB, and spring training will begin as scheduled and no delay… Now, baseball needs to get us our tickets! I was really surprised that the well known Dennis Gartman reads my humble little letter… And that got me thinking about well known analysts that could be reading the Pfennig… The sky on the horizon is orange this morning, as the sun is getting ready to rise… Oh, and Phil the Groundhog did see his shadow yesterday, which means 6 more weeks of winter this year! That is if you believe in that stuff… I used to have a woman that worked for me, Kate, that was a big believer of Groundhog day. She would have parties, and really was into this Groundhog Day thing… That was so long ago, I’m surprised I remember it! But isn’t that normal to be able to remember what happened 30 years ago, but not what you came into a the room for? Story of my adult life right there in a nutshell! Ok, Neil Young takes us to the finish line today with his song: Needle and the Damage Done.. I used to play this song on my guitar… I wonder if I recall how it’s done? Oh well, a problem for another day… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself!
Chuck Butler