May 26, 2020
* Currencies continue to inch higher VS the dollar
* Price Manipulators keep playing games with Gold…
Good Day…. And a Tom Terrific Tuesday to you.. I can’t believe that Memorial Day snuck up on me like it did… Just last week I was saying that next week was Memorial Day… But there I was on Friday night, and my neighbor, Paul, said, Happy Memorial Day Weekend to you”… I was shocked that it had come up on me so quickly.. But there it was… Memorial Day… We had a weekend of rain, and sun, rain and sun… But we had a great weekend despite the rain at times! As I told you last Wednesday, Saturday was grandson , Braden’s , birthday, and we had a nice birthday celebration for him, with family only, but still a good day! And yesterday, son Andrew, and daughter, Rachel, were over with Braden and my fave new baby, Evie to swim, and it was a great day had by all! I listened to Sirius XM’s Top 1,000 rock hits this weekend, and nowhere was this song, one of my faves: Marshall Tucker with their song: Can’t You See…
Well, last week going into the long weekend, we had the Weekly Jobless Claims, which have continued to drop each week (why wouldn’t thaey!) But nevertheless they continue to add up , and after last week’s number the total out of work since the Gov’t began shutting down the economy, is now at 36 Million… Again, do the math… 36 million of the 120 Million people that are normally in the work force, and you have an Unemployment Rate of 30%… But you won’t hear or see that large of a number from the BLS, as they can’t bring themselves to tell you the truth… I’m just saying…
The currencies didn’t’ due much on Thursday and Friday last week… The euro ended the week around 109. Which continues to amaze me that with all that’s going on in the Eurozone, with Spain and Italy and their debt, that the euro can maintain a level above parity with the dollar… What this means folks, is that with all that’s wrong in the Eurozone, Traders think that the euro is still a better bet than the dollar.. Now, obviously not like they did when the euro rose to 1.50 VS the dollar, but still Traders believe that things are better in the Eurozone than in the U.S. Now that’s difficult to get may arms around, but it is what it is…
My good friend, and Retirementor, Dennis Miller of www.milleronthemoney.com asked me to present my thoughts on why I believe the currencies are basically, dead men walking… And I, of course, obliged, and that should be out for all to read in a couple of weeks… Not much has changed for me, even though I’m now retired… If someone in the investment writing world, asks me to give them something for their letter, I’m more than happy to obligize. Back in the day when I was the only person around that talked about currencies and metals, there were demands for my time all the day long, but now that they put me out to pasture, there are only a few people that even remember my name as someone that knows what he’s talking about… And that’s Ok with me, as I don’t want to spend my day talking to people that will only print 1/2 of what I say…
The Fed continues to embarrass me with their continued rhetoric about how they have the means to protect the markets… When did it become the Fed’s responsibility to be the market’s Charles Atlas and not allow people to kick sand in the faces of the stock markets? OK, I know I’m talking to the folks that are at least as old as me on this, but do you remember those ads for Charles Atlas, with a skinny kid getting sand kicked in his face? Come on, think about it, you know you remember those ads…
The only two things the Fed has left in its bag-o-tricks is to go negative with interest rates, and to print more money, and by that I mean open the spigots wide open and print money until the cows come home… I know that we have a deflation problem going on right now folks… but inflation is right around the corner…
Remember when I told you about the supply chain disruptions, and how they would lead to higher prices? My youngest song, Alex, went to the grocery store for us on Saturday, and when he came come his mom was beside herself that he paid, $8 per lb of ground beef! I walked into the room and immediately came to his defense, explaining how I had told everyone that higher prices for meat was on its way, given what I knew about the supply chain disruptions… Ground Beef, Pork, and other meats are rising in price and there’s nothing we can do about it folks…
You know, maybe this is all temporary, and that things will be back to normal soon… And to that, I say, bunk!
Ok… well, the price of oil has rebounded from its negative price that it held for a day earlier this month, and it’s been a slow climb upward, that has the price of Oil trading with a $34 handle this morning. Oil Traders are under the thought that demand will rebound quickly, once the economy is opened up again… Well, the economy may open up again, but I have serious doubts about its ability to return to normal… And so I’m not buying what the oil traders are staying… The price of the Russian ruble has reacted favorably to the rise in the price of Oil, so too has the Norwegian krone, and Mexican peso and the other Petrol Currencies are in on the thought that demand will increase soon!
But, as far as you and me and our cars and gasoline, I don’t see this current climb in the price of Oil to be something to worry about… I saw a funny cartoon the other day… it had two gentlemen filling up their respective cards at a gas station, and on the one says to the other, “Yes, I’m getting 1 week to a gallon these days!” Of course with the states opening up again, soon there will be more cars on the road, and those days of getting 1 week to a gallon of gas, will be long gone, but not forgotten!
Alrighty then… this is very serious stuff folks, so sit down, grab some coffee, and let’s go! The relations between China and the U.S. are probably at about the worst state they’ve been in decades… Remember all that back slapping over the Trade Agreement with China? Well, they might as well wrap yesterday’s fish with that Agreement, because, China has used the excuse of the Pandemic to allow them to disregard the Agreement. But if you really look under the hood you would see that China has increased their trade to just about every country on the map!
And now China is beginning to put the clamps on the Hong Kong demonstrations, much to the chagrin of the U.S. These two things are small potatoes to what else has the relations on edge right now… The thing I’m talking about is the price of Oil… As I’ve been telling you recently, the Saudis have been behind the effort to cut Oil production, and that really rankles the U.S. shale producers, but not as much as the Saudi’s effort to cut prices of Oil enough to drive the shale producers out of business…
Longtime readers will recall me talking about the shale producers and their level of price they need to make fracking profitable, and as that price drops the shale producers close the wells and take down the rigs, and go home… That drops the production of Oil, and soon the price begins to rise again, and the shale producers get their hopes up again, and round and round we go, where it stops nobody knows…
And now that China has the world’s attention, and they will present the Piece of Resistance…. They will begin to take a thick slice of their currency’s value… Cheapen their currency, and that should tick off the U.S. leaders to the max! And help China continue to flood the world with their exports….
Man was ever treated to a great discussion between Grant Williams and Neil Howe, of the 4th Turning fame…. I was captivated by what Neil Howe had to say…. And, I just completed my reading of the Kurt Vonnegut book, Cat’s Cradle… This is a very compelling book that tells the tale of “ice Nine”… James Rickards uses the term “ice nine” to describe what debt is going to do in the world… Now, I’m onto a book titled: Dis United Nations…. I wonder what ideas I’ll get from this book?
The U.S. Data Cupboard just keeps printing reports that are worse than the reports from the previous day… This week’s reports will include Durable Goods and Capital Goods Orders for April… This won’t be pretty folks, so you may want to turn your head or hide your eyes when these reports print on Thursday this week. The reports this week are pretty lame until we get to Thursday. Today for instance, we’ll see the color of the Case/ Shiller Home Price Index for March… yes, that’s right for March! Like who cares about what happened in March? Everything is about April and onward now, in my book!
We’ll also see the current (May) print of Consumer Confidence, which will probably surprise you and reflect strong confidence. I’ll shake my head in disgust at this report, as usual, and then go on with what else I was doing, because I just don’t get this report…
Well, June will bring about Hurricane season here in the U.S. and that’s pretty much what I see with the U.S. economy and stock market right now…. Think about this… the first wave of the hurricane hits us in March and early April and devastates us, then the eye of the storm, the calm if you will, comes up on us and people begin to come out of their houses , much like the munchkins of Oz, fame did… But the backside of the hurricane is coming folks… I suspect that it will arrive in June… So, hold onto your hats because the ill winds that the backside of the storm will bring us will be quite strong…
This description of what’s going on and what’s coming is much like what happened during the Great Depression… The devastation, the calm, and then more devastation… I’m a firm believer of the idea that history repeats itself, and although the events might change a bit, they are surely at the scene of the crime!
To recap… The Currencies continue to inch upward VS the dollar. The price manipulators keep playing their games with Gold. The shiny metal gains one day, and loses the next day… This will last until it doesn’t and Gold will then move higher! China is getting the U.S. mad once again but what’s a mother to do with a bratty child? The price of Oil is rebounding with every passing day, what gives with that? And the Data Cupboard is left wanting most of this week….
For What It’s Worth…. So, there I was on Saturday reading email and I see the Saturday letter from Ed Steer, and I jump at the opportunity to read it, as always. It can be found here: www.edsteergoldsilver.com, and in this letter I found this little nugget from Egon Von Greyerz, someone you should get to know from his writings, for sure. But in this letter he’s talking about how everything is fake, and it can be found here: https://goldswitzerland.com/the-global-forest-fire-is-here/
Or, here’s your snippet: “It drives you absolutely mad to see a whole world living a lie. How can anyone believe that the fake world the Fed and their fellow central bankers have created has anything to do with reality.
We have fake money, fake markets, fake companies, fake banks, fake interest rates, fake income, fake pensions, fake social security, fake wealth, fake bail outs, fake buildings, fake holidays, fake cars etc which create false lives for most of us especially in the West.
So you might ask how can it all be fake when we can touch it, use it, or experience it. For people who don’t understand that it is all fake, let me say that we will all soon realize how fake it was. Because many of these things that we perceived as real were all an illusion.
An illusion is defined as “an act of deception” or “something that produces a false or misleading idea of reality. And that is exactly what we have been exposed to. The world had been deceived but we have all believed that it was real.
There is a perception in the world that things will continue as they are and that the Deep State is going to control us all in a totalitarian world. What few realize is that the Deep State or Powers That Be are going to lose control totally. They are totally dependent on the world in which they can control everything through debt and the fake monetary system they have created. But let me make it clear that this fake system is about to implode.”
Chuck again… A very good description of what’s going on and has been going on for some time now…. When the fake system implodes, that’s when Chuck’s vision for what’s going to happen begins to take place… I’m just saying…
Prices today 5/ 26 /20: American Style: A$ .6623, kiwi 6185, C$ .7207, euro 1.0956, sterling 1.2311, Swiss $1.0331, European Style: rand 17.4148, krone 9.9491, SEK 9.6255, forint 319.03, zloty 4.0682, koruna 24.7215, RUB 71.56, yen 107.65, sing 1.4189, HKD 7.7521, INR 75.19, China 7.1357, peso 22.14, BRL 5.4954, Dollar Index 99.25, Oil $34.04, 10-year .69%, Silver $15.84, Platinum $842.04, Palladium $1,954.23, and Gold… $1,725.60
That’s it for today… Did you have a nice holiday weekend? The unofficial start of summer… The wound center last week was interesting in that the doctor didn’t think I needed another skin graft, that the small opening was closing on its own. I told him I don’t think, that given the fact that I take chemo each day, that makes the healing process take longer, that it will heal on its own, but we’ll try it his way for a couple of weeks, and then I’ll demand another skin graft… My grandson Braden keeps asking me why I can’t get in the pool… So that’s got to stop! Well, baseball isn’t any closer to an agreement to play this year… Tsk , Tsk… If the players really think that the owners are asking them to take risks to play, then they should just say no, and be done with it, but instead we get all this saber rattling, which gets on my nerves! Blood Sweat & Tears takes us to the finish line today with their song: Spinning Wheel… I hope you have a Tom Terrific Tuesday, and will continue to Be Good To Yourself!
Chuck Butler