November 4, 2019
* Currencies react favorably to the suspect Jobs report
* Gold trades in the same clothes Thursday & Friday…
Good day… And a Marvelous Monday to you! And Welcome to November… Brovember, for some… A couple of years ago, I was in S. Florida for the first 3 weeks of November, and decided to go along with the growing of a mustache during November… But after two weeks, it was coming in so white, that I said to heck with this! I shouldn’t have been surprised, as each week when I buzz the remaining hair I do have, I’ve noticed that once it was all dark hair, then mixed, and now all gray… UGH! Oh, well, if I had the patience I would shave my head, but I barely can get through the 5 minutes of buzzing before being bored! I guess I could find a barbershop to hang out in? I don’t think there are many of those around any longer though… The Average White Band greets me this morning with their song: Picking Up The Pieces…
Well, Friday’s Jobs Jamboree, had a lot to be desired if you asked me! And apparently, the currency traders thought so too! Now, mind you, the Jobs Data showed that 128,000 jobs were created in Rocktober… And that should have gotten everyone all lathered up, given that the estimate had called for only 75,000 jobs in Rocktober… Ahhh, but what do we have here grasshopper? 274,000 jobs were added by the BLS after the surveys? That would mean that when the survey came back, they showed a loss of 146,000 jobs… And there was no way that the BLS and their band of thieves could allow that figure to be shown, so they decided that, for instance, “professional and business services” needed to have 95,000 jobs added… And so on until they got to a total of 274,000 jobs from thin air!
No wonder the dollar bugs couldn’t muster up a rally! The currencies didn’t exactly beat the band with a rally, but they did inch higher on the day.. For instance the Aussie dollar (A$) moved past the 69-cent handle, and kiwi moved higher in the 64-cent handle. The U.S. Unemployment Rate actually ticked higher, but I don’t think that had anything to do with the non-reaction from the dollar bugs.
Was it the news that China mentioned that they didn’t think a Trade settlement with the U.S. was going to ever happen? So much for that “Tentative Agreement” that we supposedly had in our back pockets a couple of weeks ago, eh? I warned you then to not get all lathered up by this announcement, as Tentative Agreements aren’t worth the cocktail napkins they’re printed on!
Or, was it the news on Friday that Rocktober’s ISM (manufacturing Index) remained below 50 at 48%… That’s two consecutive months below 50 folks… The manufacturing sector is telling us , those of us that want to listen, that is, that manufacturing is in a recession…
In the end it could have one or all of these negative things that caused the dollar bugs to go home… They didn’t need to go home mad, just go home! I don’t know what other proof the markets need to stop this incessant stock buying… But I have enough proof for me that’s certainly for sure!
One of the best performing currencies in recent days has been the Chinese renminbi… It wasn’t that long ago, that it looked as though the Peoples Bank of China (PBOC) was going to push the renminbi so low it would have to look up to an ant… But that was then, and this is now… Why the Chinese have allowed this turnaround is something I’ll have to look more closely at, but… for now the thing I like about the strong move is that the Singapore dollar (Sing) has moved along with the renminbi…
Longtime readers will or may recall me pointing out how these two move together, because Singapore can’t allow the renminbi to get too weak or too expensive due to competition with exports. So, if you’ve forgotten that I said that years ago, there it is again for your edification! HA!
Of course the stock jockeys got lathered up by the rate cut… But what about the Pause for the Cause? I guess they ran out of the room before Jerome Powell could utter those words! But that’s OK. Remember in 2009, when stocks, metals and currencies were all tied together as the “risk on” trade? And when they got sold it was “risk off”… That always reminded me of the Karate Kid movie… Wax on, wax off… But that all changed a few years ago, and now we’re back to different asset classes providing pricing that’s derived from different price mechanisms, with no recognition, as any other asset class!
You might have suspected that Gold would either take off for higher ground on the rate cut news, or be subjected to selling while using the excuse the Fed is going to pause… But in reality neither of those happened… Gold on Friday, closed at $1,512, same as it closed on Thursday… I would imagine that the price manipulators made sure that the price of Gold didn’t go higher after the rate cut announcement… And so we traded in the same clothes for two days… You know that with the Fed rate cut to 1.50%, we, here in the U.S., are not that far from zero interest rates… Remember what I told you over a year ago… That historically, during a recession, the Fed cuts rates a total of 400 Basis Points, or 4%… We’re not at 4%, not even close to it, so…
Where was I? Oh, that’s right, since most of the world has seen record levels of Gold when priced in their respective home base currencies, because they have interest rates even lower than in the U.S. that pretty soon, you won’t earn any money on your deposits, so what are you waiting for with regards to buying Gold? As always, I ask… Got Gold?
The U.S. national debt went over $23 Trillion last week… It wasn’t that long ago in reality that is, (12 months!) that we crossed the $22 Trillion figure… The Debt is acting like it’s going higher at a compound rate! Debts, derivatives, are going to be the death knell for this economy yet… And no, it’s not happening tomorrow or this week, and probably not this year, but it’s coming folks…
That $23 Trillion, per tax payer is equal to $186,500… Who’s going to be the first one on your block to write a check to the Gov’t for $186,500? Not me! They would come put me in debtor’s jail! Speaking of debt… I keep receiving emails telling me that they have the solution for getting me out of debt… (I have no debt) so I laugh, and then think, why aren’t these people sending these emails to the Gov’t? They sure could use some non-painful debt solutions!
The U.S. Data Cupboard will be quite the non-market moving event this week, with lots to report, and none to really cause us to want to get on a roller coaster, throw our hands in the air, and say we don’t care!
I’m currently reading the 5 volume of Murray Rothbard’s book: Conceived In Liberty… it overs years 1784-1791… Doesn’t seem as though 7 years would be enough to write about… Oh, but in those 7 years, we became a republic… Since those days, we’ve become an Empire… Sort of like the Roman Empire… I’m just saying…
To recap… The Jobs Jamboree on Friday was suspect at best… Sure for the mass media and stock jockeys they were touting the 128,000 jobs the BLS says were created in Rocktober. But with a closer look we find that the BLS added 274,000 jobs after they received the surveys, and they reported a negative 146,000 jobs! The dollar bugs went and hid, and the currencies rallied, although it wasn’t like a “old school” rally by them. Gold traded in the same clothes on Thursday & Friday… And the week of data looks pretty lacking this week, so we could drift along…
For What It’s Worth… Well, to me, the total debt in this country is a HUGE problem that’s more importantly worked on than the current direction of the lawmakers… $23 Trillion in debt folks… So, here’s an article that goes through the debt number and can be found here: https://thehill.com/policy/finance/468600-us-debt-surpasses-23-trillion-for-first-time
Or, here’s your snippet: “The federal government’s outstanding public debt has surpassed $23 trillion for the first time in history, according to data from the Treasury Department released on Friday.
Growing budget deficits have added to the nation’s debt at a speedy rate since President Trump took office. The debt has grown some 16 percent since Trump’s inauguration, when it stood at $19.9 trillion. It passed $22 trillion for the first time just 10 months ago.
Of the $23 trillion figure, just under $17 trillion was in the category of debt held by the public, which is a more useful gauge of the debt the government has to pay down, and the number typically used in calculating the nation’s debt burden. The other $6 trillion comes from loans within government bodies.
Still, the $23 trillion figure marks a milestone.
“Reaching $23 trillion in debt on Halloween is a scary milestone for our economy and the next generation, but Washington shows no fear,” said Michael A. Peterson, CEO of the fiscally conservative Peter G. Peterson Foundation.
“Piling on debt like this is especially unwise and unnecessary in a strong economy,” he added.
High levels of debt can push up borrowing costs and interest rates, “crowd out” private borrowing and weigh down budgets. In the 2019 fiscal year, for example, the government had to devote $376 billion just to pay the interest on the debt, equivalent to nearly half the defense budget, and more than the amount spent on the combined costs of education, agriculture, transportation and housing.
Chuck Again…. I’ve always contended that having such a large debt takes up all the time for lawmakers, and what have you, that need to tend to growing the economy… Look at Japan… I’m just saying…
Currencies today 11/4/19 American Style: A$.6917, kiwi .6430, C$ .7605, euro 1.1160, sterling 1.2917, Swiss $1.0124, European Style: rand 14.7975, krone 9.1062, SEK 9.5835, forint 294.25, zloty 3.8156, koruna 22.8537, RUB 63.49, yen 108.40, sing 1.3572, HKD 7.8380, INR 70.46, China 7.0364, peso 19.08, BRL 3.9893, Dollar Index 97.30, Oil $56.88, 10-year 1.75%, Silver $18.14, Platinum $953.04, Palladium $1,812.01, and Gold… $1,513.23
That’s it for today… Well, my beloved Missouri Tigers couldn’t lose this past weekend, as they were on bye… Back in the football depths of the 90’s I used to say the Tigers couldn’t beat bye! It was a dark time for Tiger lovers back then… Now, we get all lathered up about the team with so much potential, only to see them fritter and waste it away each year… UGH! I still wear my black and gold though, for that’ s my state’s team! We, as a family, celebrated Rachel’s birthday on Saturday night, which meant I got to hold my darling granddaughter, Evie, for a long time. I sang her to sleep, although at her age (3 weeks) she was probably going to sleep without my singing! She’s so tiny… especially when I hold her! So, happy birthday tomorrow to Rachel… She believes all of November is her birthday month, and tends to celebrate it each and every day! Good for her! The Blue Jays, (Justin Heyward, and John Lodge formerly with the Moody Blues, take us to the finish line today, with one of my all-time fave songs… I Dreamed Last Night… a simply beautiful song! I hope you have a Marvelous Monday, and please remember To Be Good To Yourself!