November 30, 2020
* Currencies have a good week, and start this week up!
* Ed Steer called the takedown in Gold last week “another drive-by shooting!”
Good Day… And a Marvelous Monday to you! I hope everyone had a very nice Thanksgiving… I did, and quite frankly, it was better than most! There were the 12 of us, and we all sat around the dining room table, no need for a kids table this year… I started asking my grandkids, what they were thankful for, and then it turned into everyone taking a turn with their thanks… When it came to me, I simply said, “I’m thankful that the Good Lord has allowed me to live all these years, so I can be here today, with all of you”… Darling daughter Dawn, began to cry, and we had to change the subject… Friday, was grandson Everett’s Birthday… He’s 10 now… Where have the years gone? I asked Everett if he had a girlfriend yet, because when I was 10 I had a girlfriend… He got all red and said no way! I’m back to rock-n-roll this morning, which means that Sugar Ray is up first this morning with their song: Every Morning…
Saturday morning, was the first time I looked to see what had happened on Friday… And by that time I had read Ed Steer’s Saturday edition, in which he described the selling in Gold On Friday as: “Another drive-by shooting”… OMG what are these demons doing to the price of Gold? The shiny metal lost another $22 on Friday, and closed at $1,788. OK, call me crazy if you will, but these takedowns last week had a purpose to them… And I think I know what the purpose was… Oh, wait, I’ll let this missive from Dave Kranzler which was reported by the GATA folks, tell you… (he’ll make more sense of this than me!)
“The gold price was given a a quick $35 ride on the down-elevator today starting at 7:40 a.m ET. There were no news items or events that occurred that would have triggered the price hit.
More likely the Comex banks implemented another Comex open-interest liquidation operation targeting the remaining 45,000+ longs in the December contract in an effort to get the December gold contract open interest as low as possible ahead the December 1 notice period, which begins this afternoon.”
In other words… The COMEX probably doesn’t have the physical Gold to meet all those deliveries of the longs for December, so if they can get those longs to sell before hand, then no delivery would be necessary… Man, did they go to some great lengths to make that happen!
On the other hand, the dollar got sold like funnel cakes at a State Fair on Friday, and the euro climbed to 1.1965… The Aussie dollar climbed to .7392, and so on… The Dollar Index fell to 91.79… On its way to lower levels for sure… At least I think so… There was a report out late last week that 21% of the toal money supply was printed last year… That means that money supply increased by a HUGE amount… But until we see the velocity of money being spent rise, inflation is going to remain in check, somewhat that is… John Williams over at shadowstats.com, who computes inflation the way it used to be computed, before, Clinton, Greenspan, and the Boston Commission changed all that, shows that inflation right now is around 5%… Not the sub 2% the hedonically adjusted CPI shows…
So, what I was getting at before I went all inflation on you, was that while money printing in of itself is not the only thing that causes inflation, it does, however, create a situation where you’ve got more dollars that dilute the value of the current dollars… And that, my friend, is why we’re seeing the dollar get moved downward nearly every day now, as witnessed by the Dollar Index, which a couple of weeks ago, when we first started tracking it, was 93.39 on Rocktober 20th… And this morning it’s 91.60, still going down…
Usually, when the dollar is falling in value, it’s falling against the non-dollar currencies, and Gold… But not during last week’s engineered takedowns… I think the takedowns have become a game for the price manipulators, a game of limbo… to see how low it can go! I had a dear reader send me a note last week, and ask me this: “If Gold is continually taken down like you describe, and Bitcoin just keeps going higher, why would you still be telling people to buy Gold?”
OK, I’ve been through this before, but who knows, who was participating in class that day, so here we go again…. “First of all, Gold is a storage of wealth… once you own Gold, you really shouldn’t care what it does, for we know that it’s not going to go to zero, never has, never will… Second, these price manipulations simply give potential buyers, cheaper levels to buy… They don’t take away the need to own Gold… And then finally, I truly believe that Gold is going to move higher, and higher as we go into 2021… I read last week, where a casino bank said that Gold would average $2,300 in 2021… But put that aside… What are your beliefs of where inflation is, and where it’s going? If you believe that the war on inflation that was won by Paul Volcker in 1981, is never coming back, then by all means don’t own Gold… But if you believe like I believe that inflation is going to be just one of the major problems we experience going forward, defaults, with dollar depreciation, and digital dollars, amon them, then you had better be long physical Gold… And there’s no better performing asset class since 2000, than Gold!… I’m just saying!
And I gave you my thoughts on Bitcoin and all other digital currencies out there right now, last week. I would suggest you go back and read the Wednesday Nov. 25th Pfennig, that can be found here: www.dailpfennig.com
And since I don’t know who’s participating in class each day, when I talk about Gold, I’m also referring to Silver…
And before I go on longer this morning, the overnight markets haven’t been kind to Gold & Silver with both down significantly already today, which would make 4 consecutive Mondays of Engineered takedowns… The dollar however is taking a ride on the slippery slope, and the currencies are booking gains as everyone arrives at their trading screens this morning.
The euro is pushing the envelope of currency gains closer and closer to 1.20, and the A$ was trading over 74-cents last night when I checked the markets, but there must have been some profit taking because is has slipped back below the 74-cent figure this morning… The New Zealand dollar/ kiwi has been the best performing currency in the last month, and reminds me of the fact that during the 2002-2011 weak dollar trend, kiwi was the best performing currency for that trend.
Do you recall me telling you a little ditty about the Euro Wannabes? Polish zloty, Hungarian forints, and Czech koruna, are the currencies I named, “the Euro Wannabes” back in 2003… Recall that I said that we’ll know for sure that the weak dollar trend is in place, when the Euro Wannabes are firmly on the rally tracks… And guess what boys and girls? That’s where they are getting situated on… I’m just saying…
The price of Oil continued to hold the $45 handle on Friday… That was quite the jump last week for the price of Oil, and now, what’s next? Well, I believe that we won’t see any further upside to the price of Oil until people start receiving the vaccine… Once the distribution problems are solved, and people are lining up for a shot, then the viewpoint would be that it won’t be long before the economies of the world begin to ramp up again, and that’s when we might see further upside in the price of Oil…
Let’s talk a bit about Currency Trends…. The first currency trend was a weak dollar trend that began in 1971, and ended in 1978…. Then came a strong dollar trend from 1979-1985… Then a weak dollar trend from 1985-1995, followed by a strong dollar trend from 1995-2002. Our last weak dollar trend was from 2002-2011… And we’ve been in a strong dollar trend since, but I do believe that the new weak dollar trend has begun… I know that the last three years years, we’ve se seen false dawns with regards to a new weak dollar trend, but this time, I think it’s not a false dawn… So, are you ready for this multi-year weak dollar trend?
I would think that a very large number of people that held non-dollar currencies in the past, aren’t even thinking that they should load up again, now… They’ll wait until the taxi driver asks them if they own any euros… Or Time says, the dollar is in the dumps”, or something like that… And then they’ll be chasing the prices upward… Good luck with that… Instead of cyber-Monday, it should be “currency-Monday”…
The U.S. Data Cupboard last Wednesday had a plethora of economic data to show us… And like I said on Wednesday morning before these reports printed that I thought that we would begin to see rot on the economy’s vine, from the shutdowns already taking place in Rocktober. And well, that’s exactly what we say… So, let’s go through these…. First up the Weekly Initial Jobless Claims rose again for the 2nd week to 778,000, from 742,00 the previous week. The Continuing claims moved up for the first time in weeks to 20.45 Million… (That’s an Unemployment Rate of: 13.63%, using real numbers!), Durable Goods Orders fell to 1.3% from 2.1 (in sept), and Capital Goods also fell to .7% from 1.9%… Then along cam Personal Income, which went negative in Rocktober, -.7%, and Personal Spending was also down to .5% from 1.2% previously… And finally Core Inflation was flat… 0.0% move in inflation for Rocktober…
This week’s Data Cupboard doesn’t have much, with only ISM (manufacturing index) for this month and the Jobs Jamboree on Friday… I’m looking for a big drop in the jobs number for November, but who knows that the BLS is going to do, right?
To recap… Gold saw another “drive by shooting” on Friday, and while it tried to come back during the day, it lost another $22, closing at $1,788, and is down already this morning too… The dollar is falling in value folks… The Dollar index which we noted on 10/20th was 93.39, and today it’s 91.60. The euro is climbing, the A$ is climbing, and Chuck believes that what we’re seeing is a new multi-year weak dollar trend… Chuck talks about Gold and the reasons you should ignore the price engineered takedowns, unless you feel the need to buy more physical Gold at cheaper prices… And the Data Cupboard last week, showed a lot of rot on the U.S. economy’s vine… Chuck thinks this is just the beginning of more rot being exposed, as the shutdowns come on board.
For What It’s Worth… Well, the Weekly Initial Jobless Claims and the Continuing Claims went higher in the week before Thanksgiving… This weekend, there was news that Disney is going to layoff 32,000 workers… That article can be found here: Walt Disney Company Plans to Cut 32,000 Jobs Following Coronavirus-Related Park Closures – Sputnik International (sputniknews.com)
Or, here’s your snippet: “U.S. media and entertainment conglomerate, the Walt Disney Company, has announced that it will look to cut 32,000 jobs in the first half of the 2021 fiscal year, 4,000 more than previously announced, as the COVID-19 pandemic continues to decimate the theme park industry.
“Due to the current climate, including COVID-19 impacts, and changing environment in which we are operating, the Company has generated efficiencies in its staffing, including limiting hiring to critical business roles, furloughs and reductions-in-force. As part of these actions, the employment of approximately 32,000 employees primarily at Parks, Experiences and Products will terminate in the first half of fiscal 2021,” the Walt Disney Company said in a Securities and Exchange Commission filing that was published on Wednesday evening.
The coronavirus pandemic forced the temporary closure of the company’s Walt Disney World Resort in Florida and Disneyland Park in California. Both have since reopened, the latter in mid-November, although attendance has been capped as part of social distancing restrictions.
On November 12, the Walt Disney Company said that operating income at the company’s parks had fallen by $6.9 billion year-on-year in 2020 due to the closures and reduced attendances upon reopening.
Josh D’Amaro, the chairman of Disney Parks, announced in September that 28,000 of the unit’s 100,000 U.S. employees would be made redundant.”
Chuck again… On Friday, last week, Ed Steer had a cartoon posted regarding this story about the layoffs at Disney… It showed people in line at the Unemployment Office, and in the door comes Mickey Mouse! Yes, even the decendents of Steamboat Willy, are filing for unemployment these days…
Market Prices 11/30/20: American Style: A$ .7385, kiwi .7048, C$ .7720, euro 1.1987, sterling 1.3338, Swiss $1.1069, European Style: rand 15.2750, krone 8.7864, SEK 8.4492, forint 299.34, zloty 3.7297, koruna 21.8075, RUB 75.99, yen 103.97, sing 1.3370, HKD 7.7511, INR 73.89, China 6.5760, peso 20.06, BRL 5.3421, Dollar Index 91.60, Oil $44.84, 10-year .85%, Silver $22.26, Platinum $967.00, Palladium $2,427.00, and Gold… $1,771.50
That’s it for today… I’m up in the air on writing on Thursday, as I do have to visit my oncologist for the last time until April (when I return from Florida) on Thursday, but not so bright an early… So, maybe you’ll see a Pfennig in your email box on Thursday, and maybe you won’t… A great weekend for the two schools I follow… My beloved Missouri Tigers won their football game on Saturday, and the very strong St. Louis University Billikens won their basketball game also on Saturday VS LSU… And without their Big Man who had to miss the game with a concussion. If COVID doesn’t interfere, the Billikens should have a very good season! Lots of senior leadership! Well, my wife left for Florida again yesterday, and I’ll be alone during the days for the next two weeks… Before she left, the Christmas tree was putt up, decorated and lit up… I love a decorated Christmas tree… The Turtles take us to the finish line today with their song: She’d Rather Be With Me…. Hmmm, I was just thinking… no, don’t go there Chuck! I hope you have a Marvelous Monday, and please Be Good To Yourself!
Chuck Butler