February 23, 2021
* Currencies & metals rally on Monday…
* Chuck talks about “valuing the ball”…
Good Day… And a Tom Terrific Tuesday to you! What a day yesterday! I sat out on the deck that overlooks the beach/ ocean, and read for nearly 3 hours! I wore a baseball cap most of the time out there in the sun, as my bald head has gotten enough sun this winter already! The “thaw” has arrived back home in St. Louis, and now they’ll have a couple of warmer days, followed by more cold, etc. That’s February in the Mid West! But down here in S. Florida? Well, how does sunny and 80 sound until the end of the month? I’m amped up for that! Our Blues can’t win when they wear those red jerseys… I’m just saying… James Taylor greets me this morning with his song: Shower The People… “Shower the people you love with love, show them the way that you feel”…
Well, the currencies and metals did see some follow up of their Friday gains yesterday, as the dollar bugs have crawled back into the wall boards where they came from, and that allowed the currencies the freedom to move about the country! The Dollar Index, which yesterday morning was 90.25, ended the day at 90.00. A few weeks ago the Dollar Index was below 90, and it appeared that it would fall further from there, and then along came a reversal of sentiment that lasted 10 days, and now the currencies are back to pushing the Dollar Index back below 90.
Gold was back on everyone’s minds yesterday, and for once in a blue moon, which we will see this Saturday! But back to Gold for a moment before I show my expertise in Blue Moons… Gold gained $25.90 yesterday to close at $1,810.50, and Silver rose 84-cents to close at $28.20… Now that looks better than a $26 handle, doesn’t for Silver? And Copper is kicking tail and taking names later these days… Apparently there is a current shortage in Copper to meet the demand, and thus the price rises… And this is where I tell you something that I’ve told you 100 times during the life of the Pfennig, and that is my dad taught me this… There’s no such thing as a shortage of something, it’s merely a case of a price adjustment needed for that something… And Copper is proving that right now!
In the overnight markets… there’s been a little slippage in the currencies, as the Dollar Index is 90.10 this morning. Gold & Silver are mixed in the early trading with Gold up 60-cents and Silver down 16-cents… Well, after sliding backward one day, the price of Oil surges higher on Monday, returning to the $62 handle in doing so… The 10-year Treasury’s yield slipped a tiny bit, on the day, but no biggie…
The Petrol Currencies aren’t feeling the love from the $62 price of Oil this morning… There’s something a little strange about this rise in the price of Oil, and I’m pretty sure the Petrol Currency traders are waiting to see if it can hold… Since when are currency traders “patient”? This whole relationship is interesting, and the rise in the price of Oil is very suspicious to me… I’m just saying…
Ok, back to the Blue Moon… There are actually two types of Blue Moons… The first is the one we’ll see this Saturday, and it will be a Blue Moon because it will be the 2nd full moon of the month… The second type of Blue Moon comes when in an astronomical season (the period between an equinox, and solstice, or vice versa) that contains 4 full moons… We’ll see this happen in August of this year…
Ever since we began to spend our winters down here and could watch the full moon rise out of the ocean each month, I’ve taken on educating myself about full moons, tides, etc.
Ok, back to normal programming! Well, you can count Janet Yellen along those that don’t appreciate Bitcoin… Yesterday, in a speech to some folks at a virtual conference, Yellen dissed Bitcoin, saying, that, “Bitcoin is an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering,” said Yellen.
“I don’t think that Bitcoin is widely used as a transaction mechanism,” she added.
OK, so here’s Chuck’s addition to what Yellen wanted to say, after dissing Bitcoin… “But our new government issued cryptocurrency will meet all requirements for ease of use in transactions, so get out of Bitcoin now while you still can, before there’s a mass exodus for the door.”
Now, wouldn’t that have been better if Yellen just spoke the truth, and didn’t hold back? But hey, she’s a Gov’t official, why would we expect better from her?
Oh, BTW, Bitcoin sold off by 17% but the Bitcoiners all believe that Yellen’s words didn’t have anything to do with the selloff… According to the Bitcoiners the virtual coin needed a correction, after a nonstop run up to $51,000… Whatever… (did you get my exasperation there?)
Yesterday and today, Cartel, and I mean Fed Chairman, Powell, will speak to the House and Senate on different days… Yesterday, this is what Powell had to say , “There’s nothing more important to the economy right now than people getting vaccinated,” He went on to talk about how the Cartel, I mean the Fed has provided much needed fiscal policy…
So, what’s holding up the 3rd round of stimmy checks? The Gov’t has proposed a $1.9 Trillion deficit spending program and it is dragging its proverbial feet before getting passed… I wonder what the holdup could be? Could it be that some representatives are having second thoughts about the size of this relief package? Nah… These people are as cold hearted as the Grinch, before he meets Cindy Lou! I doubt they ever have second thoughts on their deficit spending!
And that in a nutshell should be the reason currency traders begin selling dollars… On Friday last week, I was treated with a visit from a friend that lives down here about 45 minutes north of me. We take turns visiting each other, and this year, it was Walt’s turn to come to Juno Beach! I had a long discussion with him that I’ve not had with you, so here goes… better grab a new cup of coffee…
When I played basketball, the coach would always be yelling at us to “value the ball”… In other words, don’t turn it over, by making silly mistakes… We had the responsibility of keeping the ball and valuing the possession. These days, no one values the dollar… Ok, stay with me on this…
If the dollar was valuable, we wouldn’t be printing it by the trillions to dilute the current outstanding stock, right? If the dollar was valuable, it would have an interest rate that paid people for holding the currency… But if it pays no interest, apparently the powers that be don’t care if you hold the dollar or not, right? If the dollar was valuable, we wouldn’t give people loans that we know good and well they aren’t going to pay back, right? Think about that one for a minute… Banks make loans, and give out dollars to borrowers, who may or many not pay it back, but the key here is that if the dollar were valuable, it would charge a higher rate on loans (you must be able to pay to receive this valuable currency) and they wouldn’t give it out nilly willy to anyone that breaths or fogs a glass!
There are so many dollars floating around that everyone has a wad of them in their pockets (except millennials, they never have cash!) But there was a time when you would be the only one at the table that could pull out a Benjamin Franklin and pay the tab… Nowadays everyone can do that! That’s because dollars aren’t worth what they once were, and everyone has them!
And this is all a result of not valuing the dollar… need some more dollars? We’ll just fire up the printing press here and see! Foreigners don’t covet owning dollars in their foreign exchange reserves like they once did, getting foreigners to show up at the Treasury Auction window is like getting people to show up for a root canal without Novocain!
Value the ball… Because the dollar is the reserve currency of the world, we as its handlers, are supposed to value the currency, and preserve the value of the currency, and we don’t… I could go on for hours on this, just ask Walt! HA! But, I think you get the point I’m making… The dollar is valued any longer…
The U.S. Data Cupboard today will see the second phase of Cartel, I mean Fed Chairman Powell’s testimony on the economy to Congress… We’ll also see the stupid Consumer Confidence Index for this month… I call this data “stupid” because in reality it’s nothing more than a pulse on what the stock market is doing… I always kid, and say, “They never ask me if I’m confident!”
To recap… The currencies and Metals did follow up on their Friday gains on Monday, with the euro rising through the 1.21 handle, and Gold adding back $25.90, while Silver rose above $28… There was some slippage in the currencies and metals overnight, but the move is small… Janet Yellen disses Bitcoin, and Chuck adds words to Yellen’s speech… And Chuck goes all descriptive on us and describes how he views that the dollar has no value any longer…
For What It’s Worth… Well, it’s been a while since I last featured a Wall Street On Parade article in the FWIW section, and that absence stops today! This is an article about how two watchdogs didn’t paint a pretty picture of what’s happening on Wall Street, and it can be found here: How Corrupt Is Wall Street? Two Watchdogs Weigh In (wallstreetonparade.com)
Or, here’s your snippet: “Better Markets and Public Citizen, two of the most informed Wall Street watchdogs, provided written testimony for last Thursday’s hearing before the House Financial Services Committee on the structure of Wall Street. And, to put it mildly, their assessment of the state of affairs on Wall Street does not align with what hedge fund titan Ken Griffin of Citadel told lawmakers at the same hearing. Griffin testified, under oath mind you, that: “The U.S. capital markets are the envy of the world. Our nation’s ability to allocate capital to its best and highest use creates jobs, drives innovation and fuels our economy.”
In reality, foreign regulators have repeatedly filed enforcement actions against the largest banks on Wall Street for engaging in fraud and rigging markets. As for allocating capital “to its best and highest use, Better Markets describes what’s wrong…
“Market participants at the center of these events have for years taken advantage of market fragmentation, order routing schemes, questionable execution practices, and leveraged trading strategies. And even in the current saga, there are reports that some sophisticated participants made hundreds of millions of dollars momentum trading (exacerbating volatility both as the price went up and as it crashed). And yet, for years, the financial regulators have failed to fully and properly examine, much less remedy and responsibly limit, these questionable if not abusive, predatory or illegal practices.
“Furthermore, for years, a handful of Wall Street’s biggest banks have ‘danced while the music was playing.’ They have facilitated many of the trading practices at the center of the events and bent the rules of the markets to their advantage using their roles in the governance, operation, and resiliency of clearinghouses, exchanges and trading venues, data repositories, and more. Those banks also remain (a) the prime brokers for most sizable hedge funds, including those involved in the GameStop events; (b) the dominant derivatives dealers with 87.3% of U.S. derivatives exposures; and (c) significant lenders in various capacities, including as securities lenders.”
Chuck again… The Fixx sang: One Thing Leads To Another…. And that’s what I’m thinking this morning after reading this article, when it comes down to Wall Street… I thank Pam & Russ Martens of Wall Street On Paarde.com They do an awesome job of digging and prying, and uncovering the truth!
Market Prices 2/23/21: American Style: A$ .7907, kiwi .7331, C$ .7930, euro 1.2155, sterling 1.4089, Swiss $1.1111, European Style: rand 14.6659, krone 8.4906, SEK 8.2877, forint 295.17, zloty 3.7083, koruna 21.2931, RUB 74.33, yen 105.23, sing 1.3204, HKD 7.7534, INR 72.45, China 6.4650, peso 20.66, BRL 5.4267, Dollar Index 90.10, Oil $62.07, 10-year 1.36%, Silver $28.04, Platinum $1,262.00, Palladium $2,400.00, Copper $4.08, and Gold… $1,812.10
That’s it for today… What on earth are the Blues management doing with these red jerseys for our Blues? I know that the team name is not a color, but they’ve worn Blue, White, and Gold since they were introduced as a new team in 1967! I have a difficult time following them in those red jerseys! Come on! Ditch the red jerseys for the true Blues fans, and not the young kids that have jumped on the bandwagon after the Stanley Cup win 2 years ago! I was reading about the Cardinals practice yesterday, and how Nolan Arenado, Paul Goldschmidt, and Yadi were in a hitting group. Now that’s something that I would have liked to witness in person! But this year, that’s a no-no… darn pandemic! I know, I know this is not a 3rd world problem, just an inconvenience for Chuck! Doucette takes us to the finish line today with his song: Mama Let Him Play… Jerry Doucette really rocks on the guitar in this song… I hope you have a Tom Terrific Tuesday, and please, pretty please with sugar on top, Be Good To Yourself!
Chuck Butler