February 14, 2019
* Currencies get sold on Wednesday…
* Gold can’t find a bid, but Palladium keeps going higher…
Good Day… And a Tub Thumpin’ Thursday to you! And Happy Valentine’s Day to all of you in love with someone! Oh, why limit that, Chuck? Happy Valentine’s Day to everyone… I certainly don’t want to leave out any Charlie Browns…. I doubt that the “can’t hurt anyone feelings” schools don’t have Valentine’s Day parties any longer, where Valentine cards are exchanged, and you always saved the best and sappiest card in the ones you bought to give out, for your favorite girl… or boy… You always sat with anticipation, and hope that you were going to get 1. a lot of cards, and 2. that one of them would be from your secret sweetheart… Great memories there, that kids today, no longer get to experience… That’s a shame… The Rev. Al Green greets me this morning with this song: Love and Happiness…
Well… It appears that we’re back to the trading pattern that gives us one day up and the next day down… I can’t stand this volatility, there’s no direction, no trend, no sense in the currency markets and metals… Monday was the dollar’s day to dance, Tuesday belonged to the currencies, and Wednesday went back to the dollar… That would mean today, the currencies should rebound… I’m not seeing that just yet, but there’s always the December Retail Sales data to shoot holes in the dollar later this morning…
I’m surprised, no wait, no you’re not Chuck, this is typical for the major media these days… What I’m talking about is the fact that the U.S. national Debt is now above $22 Trillion… And nary a word on TV cable news about it… Have they all been given the “shh sign”? It certainly appears that way, to me… But not to worry, you always have little old me to remind everyone the national debt figures! And we, as a country, have now gone over $22 Trillion, in just about 10 months time, we went from $21 to $22 Trillion… UGH!
Since I’m going down this road I might as well keep going, right? OK, well, yesterday, I told you about the Brick in the Wall stuff I’m watching… And I have another brick in the wall of data reports that spell recession, to add to to the wall today… Check this out…
According to a new report from the Federal Reserve Bank of New York, more than 7 million Americans have reached serious delinquency status on their auto loans, meaning they’re at least 90 days behind on payments.
All in all, it’s just another brick in the wall… Yes, and guess who the majority of these delinquent folks are? They’re the under 30 crowd that bought their beemer or Audi, or Infinity car with bad credit, which made their auto loan, “subprime”, and longtime readers will recall me talking about this in the past and how I thought this was going to end up in tears, and look where we’re going now… We’re heading to the crying room…
Again, nary a word of this coming disaster on the cable TV news… I shake my head in disgust… One has to scour their sources to find these pieces of news that tell a story about the economy, and I don’t mind doing it, in fact I love doing it, but… would like for everyone that doesn’t read the Pfennig to have access to these items, so they can make informed decisions about investing… That… or, get them to sign up for the Pfennig! HA!
There’s not much going on abroad in the data print section… The Eurozone did print 4th QTR GDP this morning… Wait, What? they’re just not printing 2018 4th QTR GDP? That sure seems to me to be very backward looking… Anyway, it was not anything to write home about, nor was it earth shattering the other way either… Eurozone 4th QTR GDP on a year on year basis was up 1.2%, same as the 3rd QTR in 2018… So, no sing of a pending recession there, at that time… But things for the Eurozone sure have changed in the 6 weeks since the end of the year… At least that’s how the dollar bugs would have you see it… For me, I’m still on the fence, and agree that things are looking weaker in the Eurozone, but it could just be a beginning of the year slowdown, and not a trending recession, but then it might not be either…
So, more time and data is required before we make the call here… But remember what I’ve always told you… That the euro is the offset currency to the dollar… And IF a weak dollar trend begins in earnest, the Eurozone’s data won’t bother the euro, as it will be the main beneficiary of the dollar weakness…
Of course, the euro could find more room to rally VS the dollar if the Eurozone economy isn’t in a recession too! During the last weak dollar trend, I recall talking to my former colleague, Chris Gaffney, and talking about how the Eurozone economy was growing, and now I was able to give additional reasons to buy euros, and not just because the U.S. was doing badly…
Gold couldn’t find a bid yesterday, and fell $4 and change on the day… I keep looking at the price of Palladium in wonderment… Palladium, which is used in the making of catalytic converters for gas powered automobiles, is trading above $1,400 an ounce, and I keep saying, “this can’t continue, this can’t continue” and yet it does… I just think that given the rot on the U.S. economic vine, that the coming recession could knock the stuffing out of Palladium… But that doesn’t mean it should be ignored now, eh?
And everyday, I get ready to record the prices for the currency roundup and get to Silver and automatically write down $15 and then look to see the change… I’ve grown very impatient with the Silver’s ability to rally given the shortages that I’ve been talking about… I was reading an interview on silverseek.com , with Silver guru, Ted Butler (no relation I know of) and he had this to say… “Silver has never been more necessary. It is a vital component of just about every modern product. Production of silver has been flat for years. Quite simply, there will not be enough silver to go around and price rationing will be required.”
OK… I agree, but when’s “sooner” going to be?
As previously stated, the U.S. Data Cupboard will finally have the December Retail Sales this morning, and given that December’s Retail Sales should be stronger than Charles Atlas, (remember him?) I’ve told you already this week, earlier, that the BHI (Butler Household Index) indicated to me that this will NOT be the strong Retail Sales report the market was anticipating a month ago, when it should have printed originally…
Yesterday… The Data Cupboard had the stupid CPI, which showed no increase to inflation… Now, if the Fed Heads watch this data, and I doubt they do, given the way it’s been hedonically adjusted for over 30 years, they would certainly entertain the idea of no more rate hikes are needed…
I really don’t have much else to talk about, this morning… I’m all twisted and turned on everything that’s going on here in the U.S. So, I’d rather not go down one of those rabbit holes this morning… It’s Valentine’s Day, we’re all supposed to be feeling amorous, not shooting holes in thoughts and ideals! But wait, wasn’t there major shooting of holes in the St. Valentine’s Day massacre? So, I guess those guys weren’t feeling so “amorous” eh? HA!
To recap… It’s one day up the next day down for the currencies these days, which would have them rebounding today, but no sign of that just yet this morning… Retail Sales from December finally gets printed today, and could push the dollar down, if all things are created equal, that is… Gold couldn’t find a bid yesterday, but Palladium continues to gain in price, and Chuck is getting quite impatient with Silver…
For What It’s Worth… Since I mentioned it earlier, I though that this article on Reuters.com was quite apropos. It’s about Palladium’s rise, and can be found here: https://www.reuters.com/article/platinum-palladium-johnson-matthey/update-1-palladium-supply-shortfall-will-worsen-this-year-johnson-matthey-idUSL5N2084XX
Or, here’s your snippet: “A deficit in the palladium market that has driven prices of the autocatalyst metal to record highs will widen dramatically this year, specialist materials company Johnson Matthey said in a report on Wednesday.
The company, a leading auto catalyst manufacturer, said the shortfall in the roughly 10 million ounce-a-year palladium market narrowed in 2018 to 29,000 ounces from 787,000 ounces in 2017, its widest in three years.
But it said stricter emissions standards would increase demand for palladium for catalytic converters, and despite an increase in recycling, supply would struggle to keep up.
The rate of growth in secondary supplies is likely to be lower than in 2018, while primary shipments (of newly mined metal) are expected to be flat,” the report said.
Palladium-backed exchange-traded funds (ETFs) would no longer be able to bridge the gap between supply and demand by returning metal to the market, it added.
ETF holdings have fallen to around 750,000 ounces from more than 2.5 million ounces in 2015.
Palladium prices have surged by around 70 percent in the last six months to record highs above $1,400 an ounce, while platinum, once the most expensive of the major precious metals, is stuck near 10-year lows around $800 an ounce.
For platinum, Johnson Matthey said the roughly 8 million ounce-a-year market was oversupplied by 498,000 ounces last year, up from 176,000 ounces in 2017, and another surplus was expected this year. “
Chuck Again… It’s all very interesting folks… the rise of Palladium, which longtime readers will recall me talking about over a year ago, that a mining president said that 2018 was going to be the year the Palladium passed up Platinum, and he was bang on…
Currencies today 2/14/19: American Style: A$.7105, kiwi .6833, C$ .7540, euro 1.1275, sterling 1.2838, Swiss $1.0088, European Style: rand 14.1020, krone 8.6498, SEK 9.2700, forint 282.60, zloty 3.8443, koruna 22.8640, RUB 65.88, yen 111.05, sing 1.3582, HKD 7.8479, INR 71.07, China 6.7585, peso 19.41, BRL 3.7266, Dollar Index 97.13, Oil $54.40, 10-year 2.69%, Silver $15.58, Platinum $785.68, Palladium $1,408.18, and Gold… $1,306.00
That’s it for today, and tomorrow, and Monday, which is the President’s Day holiday! A 4-day weekend for yours truly, and after this past week, one that is well deserved, if I may say so myself! HA! Well, did you do good with your Valentine’s Day gift for your loved one? I have been instructed that I should not waste money on cards, flowers, candy, and a whole list of other things… So, a kiss is all I have to offer today… I hope you do better than that! HA! I smell bacon being cooked, I guess I’m getting a big breakfast for Valentine’s Day! YAHOO! The first day of Spring Training was shortened by the rain that fell here all day yesterday… Beginning tomorrow, we should be back to normal, sunny and 80, each day… Uriah Heep takes us to the finish line today with their classic rock song: July Morning… I used to have an 8-track player in my car, and had an 8-track recording of Uriah Heep Live, and I along with my good friend, Preston, would play that at high volumes over and over again… I hope you have a Tub Thumpin’ Thursday, Fantastico Friday, Marvelous Monday, and an amorous Valentine’s Day… And remember to Be Good To Yourself!
Chuck Butler