December 2, 2020
* The euro & the metals have a great day!
* Chuck has an early Christmas gift for you!
Good Day.. And a Manfred The Wonder Dog Wednesday to you… As a reminder, don’t look for a Pfennig tomorrow, the next one will come your way on Monday, Dec. 7, Pearl Harbor Day, for those of you who are historians, like me! Our first day of infamy… More on the on Monday. All by myself… don’t want to be all by myself, any more… (Eric Carmon)… It’s only been 3 days, and the house is so quiet and eerie during the day, that yesterday, I just went out to my car, got in it and went for a drive just to break the monotony of the quiet house… Today, my two older kids, Andrew and Dawn, will come to visit me, as we will all be going together to a funeral home, as a family member passed away last week. Not someone that we knew well, but knew. And Kathy, Chuck, Andrew and Rachel attended his wedding a few years back. Too young to pass, that’s for sure… RIP Tommy… OK… back to the Smooth Jazz Christmas station on Pandora this morning, and they have for me The Stephen Kummer Trio’s version of: Have Yourself A Merry Little Christmas…
I looked up buying the CD that Stephen Kummer’s Trio put together that gets the individual songs played on this station, and it was selling on Amazon for $60!!! I said, well I guess I can listen to it for free on Pandora, so I passed….
What a day for the euro! The single unit began the morning at 1.1966, and last night when I checked, it was trading at 1.2080! I have a good friend, Mike, that likes to kid me about getting excited about 25-cent moves… Well yesterday’s move was over $1, Mike… now imagine if you have $100,000 invested in euros, and you bought them a last fall, when we first had this discussion… You would be up $10,000 in profits… Of course I cherry picked the dates, because, well, that’s my prerogative! HA!
The euro, Norwegian krone, New Zealand dollar, and sterling were the top three performing currencies yesterday… I have to think that at some point the European Leaders are going to need a crying towel, for as I said a few months ago, a stronger euro is not what the Eurozone needs right now, but as President Nixon’s Treasury Sec., John Connally told finance ministers in 1971… “The dollar is our currency, but it’s your problem,” So, when will we see some intervention, first jawboning, then physical intervention to at least stem the growing euro’s value? I would think very soon… So, don’t chase this market… If you haven’t already bought your euros, you probably need to wait to see if there is a pullback due to intervention, to buy… Don’t fall into the trap that most retail investors fall into… Chasing a market higher…
And the euro was joined in the rally VS the dollar by Gold & Silver… Gold closed up $39 to $1,816.20, and Silver closed up $1.38, to $24.08… Silver’s rise was very impressive, folks… You rarely see a day when Silver rises over a dollar in value, without some response from the price manipulators, who especially like to take Silver to the woodshed.
In the overnight markets, Gold started down $6 probably from some profit taking… And then went through the night, it fought back, and is trading in the early markets this morning up $7.50… And the euro has slipped just a tiny bit from its lofty figure of last night of 1.2080, to 1.2066, as I write… Still quite an impressive move yesterday for the two anti-dollar asset classes…
I know I don’t talk about Platinum and Palladium very much, but I do have to note that Platinum has been on a tear onward and upward, and has climbed back above $1,000… Good show!
And in our daily tracking of the Dollar Index, we see that the index has fallen again down to 91.37… As I’ve explained in the past, the Dollar Index is heavily weighted with euros (from the combination of all the legacy currencies, francs, lira, etc.) But the markets like to use the Index, and so we use it as a quick show of how the dollar is trading… which for the last 6 weeks has been down…
Ok, I made a big deal out of the Powell, Mnuchin testimony to Congress on the CARES Act spending yesterday, and it did turn into an exchange of words that became almost like a debate, on how each person sees the economy… One senator called Mnuchin’s calling back of the unused funds as “malpractice”… And with that, just like everything else these days, this hearing became Political… There’s much to talk about here, so I have a recap in the FWIW section today on this, so stay tuned, don’t touch that dial, and you’ll come around to it in about 5 minutes…
There could be some real problems ahead for the economy folks… More shutdowns, lockdowns, whatever you want to call them… They didn’t work the first time, for if they did, we wouldn’t be experiencing a new wave… And people suffered, the economy suffered, and life was changed forever… And now we’re going to go the same thing over again… The World Health Organization says that 130 Million people world wide will starve from Lockdowns… Tom Woods just gave a speech on this and his video can be found here: What I Told State Legislators About Lockdowns | Tom Woods . But I wan to point out here is that 130 Million people exist on the east coast of the U.S. so if you were to drive from Main to Miami, and saw 130 Million people starving, what would you think?
Ok, and no, I’m not out to kill anyone’s grandma… So, don’t you dare send me any emails telling me that’s what I’m trying to do! What I’m trying to do is to educate people on the truth on the political science… that keeps putting fear into everyone’s mind, for as long as they keep the fear factor high, they can control us… I’m just saying…
And you thought this was a letter about investments, economies and dolts… Just another public service announcement from yours truly… Think of it as an early Christmas gift!
Hey! I hear we might get a dusting of snow Thursday night! Wouldn’t it be wonderful to have just a dusting of snow on Christmas?
OK… sorry for that change of direction there… I got to the fork in the road, and decided to turn a different direction…
Now, back to our regular programming… The U.S. Data Cupboard yesterday had the Nov. ISM Manufacturing Index, which I told you I thought would slip from the Rocktober number of 59, and that’s exactly what it did, slipping to 57 (there are some decimals involved, but I rounded them off!) And next month’s report for Nov. should show more rot on the vine… When you look under the hood of the report you find that Managers that were surveyed were skeptical of the future, and the employment component of the report was very soft…
I think this data is very important, as it is showing us that the momentum the economy was building is fading fast…
Today’s Cupboard only has the ADP Employment Report for Nov. the precursor to the BLS Jobs Jamboree on Friday this week… And again, I believe that the ADP report will be weaker than it was in Rocktober… We were also supposed to see U.S. Vehicle Sales yesterday, but the data was delayed… I guess they didn’t have enough time to massage and cook the numbers to be just right, as Goldilocks would say…
To recap… The euro had a great day, and dragged some selected currencies with it to the dance party. Gold & Silver had great days too! The overnight markets started out on the wrong foot for the metals, but turned around at some point while I was sleeping a bit, and is up $7.50 in the early trading today… And the Powell / Mnuchin testimony before Congress turned political, just like everything else these days… It turns my stomach when I see it coming… Why is everything politicized? UGH!
For What It’s Worth… Well, I built this up earlier in the letter, and the snippet won’t be able to capture the who shootin’ match, so here’s the link to the article I used, so you can check it out in its entirety… Rare Mnuchin-Powell spat takes center stage at COVID-19 hearing | TheHill
Or, here’s Your snippet: “A rare public break between Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell took center stage during a Senate hearing Tuesday as Republicans and Democrats sparred over the expiration of coronavirus relief.
Democrats were eager to exploit the fallout from Mnuchin’s recent decision to close $454 billion in Fed emergency lending facilities set up through the $2.2 trillion CARES Act, a move that elicited public criticism from Powell.
While the Fed initially disagreed with Mnuchin’s decision, Powell eventually relented and agreed to return the unused credit protections by Dec. 31 without endorsing the Treasury secretary’s decision.
Both Mnuchin and Powell sought to play down the divide before the Senate Banking Committee on Tuesday by deferring to each other’s authority and treading carefully around disagreements. Mnuchin insisted he was simply abiding by a statutory deadline to wind down certain programs by the end of the year, and Powell said the Fed did not dispute Mnuchin’s legal authority to make that call.
“Our thinking is that we would have left facilities in place to be backstops. We don’t question the secretary’s decision about the CARES Act money because that’s entirely his decision to make. But I think central banks generally would have done that,” Powell said.
But furious Democrats, who insist the lending facilities could be crucial if the third COVID-19 wave causes more financial turmoil, urged Powell to take a tougher stand against what they called a politically motivated decision to undermine the economy before Mnuchin departs on Jan. 20.
“My decision not to extend these facilities was not an economic decision,” Mnuchin told senators. “I find it implausible that any member of this committee believed that in voting for the CARES Act, you were authorizing me to invest $500 billion to make loans in perpetuity.”
Chuck again… And now this morning it was revealed that President Trump signed an executive order giving Mnuchin $50 Billion to use for the ESF (exchange stabilization fund, or slush fund if you will) and Mnuchin decided to take the extra $386 Billion on his own… this stuff is crazy folks, and just shows to go ya that when you start dealing with these large numbers it numbs the minds of people, which is their objective to keep everyone confused… I’m just saying…
Market Price 12/2/20: American Style: A$ .7368, kiwi .7047, C$ .7725, euro 1.2068, sterling 1.3332, Swiss $1.1156, European Style: rand 15.3760, krone 8.8682, SEK 8.5183, forint 296.27, zloty 3.7092, koruna 21.8780, RUB 76.02, yen 104.55, sing 1.3403, HKD 7.7515, INR 73.70, China 6.5715, peso 20.09, BRL 5.2890, Dollar Index 91.37, Oil $44.42, 10-year .92%, Silver $24.00, Platinum $1,015.00, Palladium $2,427.00, and Gold… $1,823.70
That’s it for today, and this week… next week will be a full week, the Good Lord willing, and Creek don’t rise… Did you know that the Creek don’t rise, isn’t about the bubbling brook rising, but rather the Creek Indians rising….. Good to know! I’ll see my oncologist today for the last time until April, when I return from Florida… She’ll be so sad to see me go… HA! My latest blood sugar numbers were lower and keep going lower, which is a good thing… I don’t want to be a diabetic! When I go to doctor’s offices they always ask me if I’m a diabetic, and I love telling them no… and I want to keep telling them no! I’ve cut the carbs I intake, not a keto diet, just a cutback of the carbs… No sugar means so sweets, and brother do I have a sweet tooth! So, that alone is a very big pain to me! But I’ll do what I have to do… You can bet your sweet bippie on that! OK… enough of that talk! One of these days, medicine will come up with a magic pill that cures all that ails me… Hey! I’ve got to have hope, and dreams right? Well the jazz Christmas station is playing Beggie Adair’s version of: The Holly and the Ivy…. I hope you have a Manfred The Wonder Dog, Wednesday, and will be Good To Yourself!
Chuck Butler