June 29, 2020
* Currencies find a way to gain VS the dollar on Friday…
* Have the words of Stephen Roach sunk in to currency traders?
Good Day… And a Marvelous Monday to you! Well, for all of you longtime readers, this will throw you for a bit… Youngest son, Alex, celebrated his 25th birthday yesterday… I know some of you can recall when he was born, and some of you can recall when he used to help me write the pfennig, but now after all these years, he holds a doctorate degree from St. Louis University in Physical Therapy… All the folks in our family have agreed that we don’t have to call him Dr. Butler… And he’s OK with that! But can you believe it? 25 years ago, I was 40, and thinking I’ll never be alive to see this kid graduate from High School, much less College, and now here we are… I’m still alive, and so darn proud of him! I hope your day was grand, Bud… Peaches and Herb greet me this morning with their song: Reunited… (what a great song!)
OK… where to start, where to start… Let’ see… should we talk about all the vandalism going on in our country? Or should we talk about Gold? Or should we talk about the U.S. economy? Well, guess what? I’m going to talk about them all, and… more… so grab a cup of coffee, and let’s go!
It’s totally crazy, what’s going on in the U.S. these days… People have gone off the deep end, folks, trust me on that, for there’s a petition going around to change the name of the city of St. Louis… These same folks want to tear down the King Louis statue that sits outside of the Art Museum… What? Have they no better things to do? I’m so fed up with all this removing of our history, that I’m going to stop here, before I go the whole 9 yards, with my feelings on all this!
OK, the markets… Well, Gold found a way to add $6 to its total on Friday, and close at $1,771… But… and you knew I would have something additional to say here, right? Gold had climbed as high at $1,786 at one point on Friday, only to see most of that gain wiped out by the price manipulators… But, a again, is a gain, right, and we shouldn’t look a gift horse in the mouth, now should we? Gold is in a bull market folks, and no amount of price manipulation is going to stop it from moving higher now…
Last week you may recall me telling you about Stephen Roach, and his call that the dollar is going to sink very low, and wondered if he still had the ear of the markets… Well, I see just about every news agency that covers financials have picked up that article and ran it, with Stephen Roach saying the dollar is going to fall… I find it interesting that this call by Roach has gotten so much air play…
And the dead men walking currencies found a way to gain VS the dollar on Friday… You see, as each day goes by, more and more cases of the Covid-19 virus are being reported by the states… ( which makes sense to me since there’s more reporting, right? ) and when those number of cases get reported, it’s all doom and gloom, and the stocks and the dollar just can’t put up a fight… Two of the last 3 days of last week saw stocks get hammered… Is that a trend?
Well, I know that some of you took my hints a couple of years ago, and signed up for the Aden research Dow Theory Letters, and if you did, you may recall me writing an article for the Dow Theory Letters (DTL) about historical stock performance during a recession… The history doesn’t lie, even though folks today might want to change it to better suit them, and historically speaking, when we’ve had a recession in this country, stocks do NOT perform well… And last I checked, let me check again, yes, nothing’s changed, we are in a recession…
And now that we’ve got that out the way… The currencies found a way to gain, once again, VS the dollar on Friday of last week, The euro which has seen some fluctuations recently, is now back above the 1.12 handle, and looking to go higher, I might add! Talk about fluctuations, if you look up the word in the dictionary, you’ll see a picture of an Oil barrel! HA!
The price of Oil just can’t settle down, up, down , sideways it’s been everywhere in recent weeks, and these gyrations just don’t help the Petrol Currencies find some terra firma… The Russian ruble continues to illustrate exactly what I’m talking about here… The ruble follows the price of Oil step for step… And that reminds me of a conference I attended about 5 years ago, in Westin Florida, and sat on a panel with guys like James Rickards, and Grant Williams! And David Galland was the moderator, and asked the panel what they thought of the Russian ruble… And there was nothing but crickets, until I spoke up and said, “Well, to me, the ruble is a play on Oil, if you believe the price of Oil is going higher, then you would want to own rubles, and vice versa..”
While most of that statement is true, there have been other developments in Russia since then, like the economic sanctions placed on them by the U.S. and European Union, and their accumulation of physical Gold, and ability to still grow their economy even with the economic sanctions… Their Central Bank head, is the best in the field of Central Bankers, and Russia is in good hands with her at the helm…
In India late last week, they saw the ratings agency, S&P, downgrade 4 of their shadow banks credit ratings… India has been hit by the Covid-19 pandemic worst than most countries, which makes sense given their population, and the ratings agencies are making their living going through the financial companies of India, that’s for sure! But the rupee just continues to hold somewhat steady in the face of all these problems… I don’t know how much longer the rupee can hold on because, like the U.S. dollar, the fears and unknowns are just too great.
The U.S. Treasuries have sure seen some back and forth in the yield of the 10-year bond… But on Friday, after a week of watching economic data in the U.S. show promise, but still miss big time, the bond boys decided that the recession is in bloom, and the yield on the 10-year fell from .72% last week to start this week at .64%… In percentages that doesn’t seem like a big move, right? Well, for bonds it is… trust me on that one… I used to trade bonds…
I was talking on the phone with good friend, Dennis Miller, of www.milleronthemoney.com, a week or so ago, and I mentioned that I still hadn’t gotten over the drop in the 10-year’s yield at the end of March. Remember? overnight it went from 1.80% on 12/30, to .59% on March 23… I was shocked to report that level, almost as shocked as I was to report when the price of Oil went negative!
The U.S. Data Cupboard doesn’t have much for us to start the week, but ends the week with the lies and cooked books of the BLS and their jobs report for June… This will get printed on Thursday this week, because Friday is a holiday, because the Independence Day, July 4, is on a Saturday this year. It’ll be interesting to see the revision to last month’s bloated report of job creation for May… Recall that the BLS admitted out loud that they had a “glitch” and over reported jobs…
In my book the BLS should report each month that they over reported jobs… But they won’t, and they’ll attempt to report the revision under darkness so that the markets don’t notice them… But, I’ll find them, you can bet your sweet bippie on that!
Did you hear the latest goof-up by the U.S. Treasury Dept.? Ok, so a month or so ago, the Treasury sent out the so-called “stimulus checks”, and now we find out that they sent out checks to dead people… To the tune of $1.4 Million… And now they want their money back… If you go to their website you’ll find detailed instructions on how to send the money back! I shake my head in disbelief this morning over that news… What a, wait! You can’t say what you really wanted to call it, Chuck, so just move along….
To recap… The currencies found a way to gain VS the dollar bugs on Friday last week, and Chuck wonders if the words of Stephen Roach have finally sunk in on currency traders? Gold moved up $6 on Friday, and is flat as a pancake in the early trading this morning. Chuck talks about the Russian rubles, and Indian rupees this morning, just for grins…
For What It’s Worth… Ok, longtime readers know how much I like the writings and thoughts of publishing guru, Bill Bonner… I read his stuff nearly every day. On Friday last week, Dennis Miller, called me and said he was sending me an article that I would like… It happened to be Bill Bonner and his thoughts on the four steps to what he calls, “Ka-Boom!” So, I thought that would be a good article for the FWIW today, and so here it is, Bill Bonner and his 4 steps to “Ka-Boom!” and it can be found here:https://www.rogueeconomics.com/bill-bonner-diary/the-four-steps-to-an-unstable-and-corrupt-america/
Or, here’s your snippet: “But in America, we have a long way to go…
First, the Federal Reserve needs to step up its money-printing. This is almost guaranteed. Because if they back off now, the stock market will fall again.
Second, the feds need to “stimulate” the Main Street economy, too. They’ve already made a big effort – including the above-mentioned $1,200 checks and a $4 trillion deficit.
But they are just getting started. There will be no V-shaped, rocket-ship recovery. This will cause the feds to spend more.
Third, the dollar must fall. Eventually, this, too, is almost a sure thing. But it can take time.
Fourth, consumer prices need to rise. This will happen slowly, at first. Then, Americans will see prices rising and realize that their dollars are not as valuable as they thought they were.
Suddenly, dollars will begin to change hands more quickly. The “velocity of money” will shoot up, as people will no longer be willing to hold dollars in their bank accounts. Then, prices will rise much more rapidly.
Ka-Boom!
Meanwhile, the masses must get restless… sensing that something is very wrong, but not knowing what it is. Rabble rousers on one side will point at “greedy capitalists,” “racists,” and “fascists.”
On the other, they will want to call in the troops to restore “law and order”… even if it means giving up on the Bill of Rights.
At that point, the center no longer exists. Morons on the Left. Imbeciles on the Right. And nothing left in the middle.
The feds will print more and more money… just to try to keep the lid on. But it will go Ka-Boom! anyway.”
Chuck again… You tell ’em Billy boy! A very good article once again by Bill Bonner who puts things in perspective like no one else can, in my book anyway!
Market prices 6/29/20: American Style: A$ .6875, kiwi .6435, C$ .7325, euro 1.1280, sterling 1.2317, Swiss $1.0575, European Style: rand 17.2075, krone 9.6768, SEK 9.2930, forint 315.77, zloty 3.9590, koruna 23.8166, RUB 69.67, yen 107.25, sing 1.3923, HKD 7.7500, INR 75.22, China 7.0759, peso 22.99, BRL 5.4811, Dollar Index 97.17, Oil $38.77, 10-year .64%, Silver $17.87, Platinum $813.12, Palladium $1,903.74, and Gold.. $1,771.42
That’s it for today… Ok, let me get this out of the way… with the Independence Holiday being observed on Friday this week, that means everything get crammed into 4 days, and that spilled over to the scheduling of my weekly visit to the wound center on Thursday. They had to cram me in the very early morning slot, so that means no Pfennig on Thursday… You get 5 days off from having me whine and complain about things! HA! We had a nice family birthday celebration for Alex yesterday, and it was a dual celebration, because it was my darling daughter Dawn’s 16th wedding anniversary… We all had some great memories of 9-year old Alex at the wedding reception… All the guests sang happy birthday to him, and for a 9-year old, that was pretty special! Ok… need to get going! The Allman Brothers take us to the finish line today, with their song: Southbound… I hope you have a Marvelous Monday… And Please Be Good To Yourself!
Chuck Butler