April 8, 2020
* Currencies don’t give back their gains on Tuesday…
* Chuck does Gold 101…. Any questions?
Good day…. And a Wonderful Wednesday to you! I read the news yesterday that MLB is considering opening the baseball season in Arizona before empty stadiums…. That’s not going to satisfy me! What on earth is MLB attempting to do here? Baseball will help heal the country ,when its safe for fans to attend games again, period, and not a moment before! I also read where in China they’re starting their baseball season without fans, but in one stadium they’ll have 500 robots dressed as fans to play for…. I just don’t get it…. Stupid! If you ask me! Well, did you see the super Pink Moon last night? The skies were clear here, so we saw it rise in the sky, not the same as being on the beach and watching it come out of the ocean a big orange ball, but it had to do…. And it did…. The late great Dan Fogelberg greets me this morning with his song: As The Raven Flies….
The currencies had a good day yesterday, adding onto their gains from the night before… I have to say that this is the first time I’ve seen a good trading day for the currencies following good overnight trading for the currencies, in what seems like a month of Sundays! I’ll tell you one thing, economists and analysts are split down the middle, with ½ of them saying the dollar is King, will remain King, no questions asked, and the other ½ of them saying that once the Oil contracts begin to take the dollar out of the picture, and trading countries us their own currencies, then the trap door springs on the dollar, and suddenly, everyone begins to fret about all the debt the U.S. accumulated….
So, go ahead and pick your side…. I’m of the opinion that we’re going to see a change in the financial system, and that dollars won’t play as big a part as they do now…. This has been going on for some time now folks…. You see, the Fed, was bailing out foreign entities, without Congress or the public knowing about it, back in 2008…. Well, the President has put a stop to that, and even with the Fed’s new Unlimited amount that they can buy, they had better make sure it’s only from U.S. Corporations/ banks…. This lack of dollars overseas has become a real problem… There’s a ton of dollar denominated debt coming due overseas, and they don’t have enough dollars to pay them off…. So, what will these foreign entities do? They will search for ways to go around dollars, so that this never happens again…. Uh-oh….. And that will be the beginning chip to be thrown on the poker table, that will lead to a big pot, that causes a collapse of our financial system…. I’m just saying…
So, go ahead and keep buying stocks, go ahead and keep getting further into debt, I’m just going to sit here grinning like the Cheshire Cat, with my Gold & Silver….
Gold started the day yesterday down $7 and tried to come back to even on the day, but was turned away by the roadblock that was price manipulators… I’m telling you this now, so you may listen to me later, but “it is NOT in the best interests of the U.S. to have Gold become more in want than dollars”…. I’ve had long arguments with my former big boss, and good friend, Frank Trotter about this, and even showed him the WikiLeaks memos from the state dept, with conversations confirming my thoughts, but he was a naysayer on all that, and we agreed to disagree, going forward…. But that doesn’t mean he didn’t think Gold had a place in one’s investment portfolio!
I know that you longtime readers are getting quite tired of hearing me say that the one thing the price manipulators do, is keep the price of Gold from soaring, and allowing procrastinators the ability to buy Gold before it gets away from them…. You know what? I think that’s the last time I’m going to write that…. I’m sick of having to talk like I appreciate what the price manipulators are doing! To hell with them and the horse they rode in on!
So, everyone that writes a book about the coming collapse of the dollar, has the same problem… they all can’t think of anything that can take the place of the dollar… Well, if Angela Merkel hadn’t sold the Eurozone’s soul to the devil and allowed millions of refugees, the Eurozone would be working toward having the euro do just that, replace the dollar… It’s already the second most traded currency in the world…. Its capital accounts are open and easily traded, a deep bond market, and so on, but right now, all the Gov’t’s efforts are tied down to dealing with refugees….
10 years ago, I thought that by now China’s Capital Markets would be open and easily traded, with tons of trading partners… I guess I underestimated just how much control the Communist Party would have on all that, and they’ve delayed China’s currency on a grand scale from happening…. It could still happen… But…. I doubt it now…. UGH! And I was so sure that they would be in position to take over the reserve currency of the world by now…. See, I guess all my “visions” don’t come true…. Although a lot of them eventually come true, but if you’re wrong on the timing you might has well have kept your mouth shut, because no one remembers…..
Gold…. I knew when I typed the words to yesterday’s title that I shouldn’t do that because it could led to the “old Chuck’s kiss o’death”…. But I went ahead and used “Gold Continues to March Higher”… I’m sorry…. I really wanted to believe that I had no such powers…. HA!
Speaking of Gold… You know, that Gold has no liabilities, right? It has no counterparty risk? It’s not an investment, it’s a store of wealth, right? That it can’t go bankrupt, be bailed out, have taxpayers pay for its years of acting like the Three Stooges, right? Well, then as long as we have all that straight, then tell me that an ETF, that has all those bad things, is just as good as physical Gold? I’m just saying…
I keep telling people that this economic problem we’re in was going to pop anyway, it was leaking air, and the COVID-19 virus just move it up on the schedule…. Here’s a ditty to prove what I’m talking about… The Fed set up a lending facility for small business, and allocated $350 Billion…. The applications received totaled $1.7 Trillion!!!!!!! These businesses were up to their eyeballs in debt, and now they’re just using the virus as an excuse !
You know… this economic shutdown is just getting worse for everyone with every passing day…. Imagine all the perishable food that’s not being eaten because it can’t get picked, trucked, delivered and sold at a grocery store…. I imagine heads of lettuce, and so on just rotting in the fields… The food supply chain has been badly damaged, and broken, folks…. Time to dig a garden I suspect, except where I live, with a creek at my boundary line, I have so many wild animals, raccoons, deer, coyotes, foxes, just to name a few, that would eat up anything I planted before it ripened! UGH! Oh well, guess I’ll have to learn to live on meat and potatoes! And Meat lovers Pizza! HA! to get Federal aid….
And that inflation that I keep telling you is coming, will first be seen in food prices, because of the demand and lack of supply…. As I’ve told you for many years now, almost as long as it was for when my dad told me this…. But in reality there’s no such thing as a shortage of an item…. It’s merely an item that is need of a price adjustment…. And so it will be with the perishable foods that we purchase….
The proof of that statement is in the pudding with Palladium folks… A couple of years ago, Palladium was trading less than Platinum… And then it was discovered that there was a so-called shortage of Palladium, and what did the price of Palladium do? Well, we all know it skyrocketed!
The U.S. Data Cupboard continues to be wanting…. Wanting more economic data, and it won’t get it today, as the only thing on the docket today is the Fed’s FOMC Meeting Minutes from their last meeting, which ended up being anticlimactic, given the Fed had cut rates twice out of meeting prior to that last meeting… So, these minutes will probably be a bunch of back slapping and congrats for doing a bang up job…. I kid of course, they had better not be celebrating their latest moves!
Well, it’s holy week, and last night was the first rise of the full moon for this month. It was called the Pink Moon, and was considered a Super Moon…. The timing of these events is important, the paschal full moon refers to the ecclesiastical full moon of the northern spring used in the determination of the date of Easter. The name “paschal” is derived from “Pascha”, a transliteration of the Aramaic word meaning Passover. – google
To recap…. The currencies had a good day yesterday, but saw some drifting and weakness overnight…. Gold saw $11 be taken from its price, by the price manipulators, and dollar bugs. Chuck is very concerned about the food supply chain being badly damaged…. Inflation is coming…. I hear it sneaking around the corner…. Remember those old ghost stories we would tell around the campfire, closer he came, step by step, inch by inch, till finally, HE WAS ON YOU!
For What It’s Worth…. I like it when I can find really BIG guys and gals that millions of people follow each day say stuff that sounds like me talking…. And so it was with Raoul Pal, and the folks at zerohedge.com reproduced his comments about the COVID-19 virus and the economy, and they can be found here: https://www.zerohedge.com/markets/whole-worlds-fked-raoul-pal-pulls-no-punches-latest-interview
Or, here’s your snippet: “The whole world’s in trouble” ( he used a different phrase not suitable for this family letter, so I changed it!)
That is how Raoul Pal, the former hedge-fund manager who founded Real Vision, reacted when he first heard of the uncontrolled and rapid contagion of COVID-19 across the globe. Speaking from his home in the Cayman Islands on the latest “Lindzanity” podcast, the ex-Goldman, ex-GLG Partners trader said:
“The moment the spread hit Iran… and then Italy… that all happened over the span of three or four days… I was like: ‘time to panic before everybody else’…”
“It’s human behavior function. If the Chinese closed every single border and every city, everybody’s going to do it.”
“I said: ‘Listen, this is the biggest economic event of all of our lifetimes – and it’s coming'” he added. “And that was, in retrospect, the greatest call I’ve ever had.”
And now, with stock markets down 20-40% (depending on geography), bond yields collapsed, credit spreads still blown out, oil almost in the teens, and gold topping $1,700, Pal continues to think (even after Monday’s manic short-squeeze melt-up), that COVID-19 will cause “the largest insolvency event in all history.” And, as Business Insider notes, given his track record as of late, that’s not reassuring.
“I think the balance of probabilities are that this is a much longer event – in terms of economic impacts – than anybody is pricing in,” he said.
“I think it’s a huge societal change that’s coming from all of this.”
To Pal, it is the duration of the fallout from COVID-19 lock-downs that is the key factor here, and one he believes investors are not paying enough attention to (let alone pricing in). In his mind, those who are a projecting sharp V-shaped recovery in the third and forth quarter are incorrect in their assumptions..”
Chuck Again…. Tell them Mr. Pal! Because nobody listens to me! Traders that is….
Currencies today 4/8/20 American Style: A$.6182, kiwi .5976, C$ .7144, euro 1.0875, sterling 1.2360, Swiss $1.0296, European Style: rand 18.1834, krone 10.2765, SEK 10.0609, forint 329.80, zloty 4.1625, koruna 24.9787, RUB 75.56, yen 108.92, sing 1.4267, HKD 7.7520, INR 75.97, China 7.0582, peso 24.25, BRL 5.2520, Dollar Index 100.07, Oil $24.46, 10-year .75%, Silver $15.05, Platinum $739.32, Palladium $2,191.36, and Gold… $1,645.53
That’s it for today…. I really got depressed for a bit yesterday, when it hit me that this coming Sunday is Easter, and it won’t be like any Easter in my lifetime…. No little Delaney in her Easter dress and bonnet, no grandsons dressed up…. Hopefully they still go through the motions of Easter at their homes so we can zoom them or facetime them…. But I guess great traditions can be brought to an end, when a pandemic hits, eh? And I haven’t held my granddaughter, Evie, for 4 months! Oh well, it is what it is…. Last night I watched the World Series Game 3, when Albert Pujols hit 3 home runs! Only Babe Ruth, and Reggie Jackson, had done that previously…. Hey! MLB did a NCAA tournament style bracket to determine in the history of baseball who had the absolutely best season…. On one side of the bracket it was hitters, on the other side, pitchers…. And in the end facing each other in the finals it was Babe Ruth, VS Bob Gibson…. The fans vote Gibson the winner! His 1968 1.12 ERA season is and will always be one of the great memories I have listening to the games on the radio…. OK, I’ve gone on too long today… sorry… Marvin Gaye & Tammy Terrel take us to the finish line today with their song: Your Precious Love…. I hope you have a Wonderful Wednesday, and well Be Good To Yourself!
Chuck Butler