March 10, 2021
* There was no follow up in the currencies yesterday…
* Gold & Silver gain throughout the day on Tuesday…
Good day…. And a Wonderful Wednesday to you! Well, things were back to normal yesterday, after my morning routine, I went out to the deck with a book and started reading, in the sun… 2 hours later it was time to come in from the sun and take a nap… And then it was a get together around the pool with condo friends… I kept a watch on Gold all day yesterday, to see if the price manipulators came on the scene… But they didn’t and so it was a good day for me! The Cardinals regulars were leading 3-0, when it was time for the minor leaguers to come in the game, and as I always say, The other team’s scrubs beat our scrubs… That’s spring training games for you in a nutshell… Yes, greets me this morning with their song: It Can Happen… “it can happen to you, it can happen to me, it can happen to everyone eventually.”
Well, after the overnight selling of the dollar, there was no carry forward to the European or U.S. sessions yesterday, and we ended the day with the Dollar Index at 91.99, the same level it was early in the morning… Gold gained a whopping $33.50 to close the day at $1,717.40, and Silver gained 83-cents on the day to close at $26.03… I think it’s nice of the price manipulators to give us these days, don’t you?
I received an email from a dear reader yesterday, telling me that he took what I said about buying physical Gold at cheaper prices to heart and called his coin dealer, who said that he didn’t have any Gold for sale at $1,700… But he did have some at $2,100… A total waste of his time I would say, and I hope that everyone didn’t run into the same bait-n-switch that this guy did… You see, the drop in the price of Gold came so quickly and so harsh, that everyone got caught owning Gold in their inventory at much higher prices… Sort of kin to last spring when the price of Oil dropped like a rock, and even went negative one day, but the price at the gas pumps didn’t change that quickly… Because the gas they had pumped into their gas tanks cost them “X”….
I always think that when Gold drops in price that a buyer should be able to find Gold at the cheaper price… But coin dealers don’t work like that… That is unless you are my metals guru, Tim Smith at 1-800-926-4922… he’s always on the lookout for the cheapest price available!
In the overnight markets… Well, there has been some slippage from the levels in the currencies and metals that we saw yesterday afternoon. The Dollar Index is back above 92, at 92.11. So, as you can see not much of a move higher but a move higher nonetheless. Gold is down $5 in the early trading today, and Silver has given back 29-cents… Let’s see if these two can drum up enough interest to turn those negative numbers into positive ones today.. Unfortunately, what usually happens is you get a little slippage in price and the price manipulators act like sharks with blood in the water, and send there guys to the COMEX with arms full of short Gold paper trades… UGH!
Ok, on Monday this week I had to bite my tongue to keep from dissing the markets’ reaction to the Jobs Jamboree number from Friday that set off the onslaught of dollar buying… The report just didn’t make sense to me, so you had to look under the hood to see what it was made of… And instead of me telling you what was under the hood, let’s listen to what economist David Rosenberg had to say about the Jobs report last week…
I just happened to be perusing Twitter yesterday to find stories on my beloved Cardinals, when I came across this tweet from David Rosenberg.. “First time in my 35 years in the business that I have ever heard so much bullish narrative over a jobs report that saw a 0.9% contraction in the workweek, a 3.1% slide in factory overtime, a 0.6% slide in labor income and 122k plunge in full-time employment.” – David Rosenberg on Twitter
Now, I doubt seriously that the currency & metals traders looked under the hood, and if they had they wouldn’t have the faintest idea of what it was they were looking for… So, I doubt that it was the fact that they had found some chinks in the jobs report’s armor, that brought about the dollar selling… Instead, I think it was a case of being overbought for the dollar, and oversold in the currencies and metals…
So… it will be interesting to see what today has in store for us… I was talking to a condo friend last night and she was telling me that she had watched a documentary about blockchain and Bitcoin… I asked her what she thought of it, and she said that she was amazed at the changes that are coming… I then explained to her that Bitcoin probably won’t be the digital currency that is used when all countries have converted to blockchain for Trade… Just something to think about on this Wonderful Wednesday!
OK… So, China has made great strides in the development of their own digital currency… The digital yuan as it’s known, has been tested in several different markets around China and the Chinese believe that it is ready for prime time… The digital yuan, domestically branded as the Digital Currency/Electronic Payment (DCEP) project, is not only set to disrupt the country’s well-developed mobile payment industry and create new efficiencies in the Chinese economy, but could also challenge the supremacy of the dollar.
In 2010, I went out on a limb and said that by the end of the decade that the renminbi would be the next reserve currency… And although, technically I was correct, when the renminbi was added to the IMF’s Special Drawing Rights (SDR’s) as a reserve currency a few years ago, the actual replacing of the dollar as the reserve currency hasn’t happened… And now I think China has switched horses in the middle of the stream, and decided that their digital currency has a better chance of disrupting the dollar as the reserve currency… I have an additional article on this for you in the FWIW section today.
The U.S. Data Cupboard will have the Feb. CPI (consumer inflation) for us to view today… Personally, I don’t care what the stupid CPI says… I know that food prices are up probably 6%, and gas prices are significantly higher than they were 3 months ago… Insurance costs, drug costs, home prices, everything is higher in price, and it’s because of inflation, that’s already creeping into our economy, and the stupid CPI isn’t going to show us true inflation because it can’t! There’s been too many hedonic adjustments done to this data set, to even give the index a chance of reporting true inflation…
The Commodities know what real inflation is, and they are creeping higher each day in price… I’ve been telling you about Copper’s price increase, and it’s not just Copper that is seeing its price increase….
Speaking of Copper did you see where a buyer bought a truck load of Copper and when it was received he got copper painted landscaping bricks? You know when an asset is getting up there in price when it is being stolen and refabricated…. I’m just saying…
To recap… Our Turnaround Tuesday didn’t have any follow up from the previous overnight session, and only Gold & Silver carried on and added to their early morning gains throughout the day. The Dollar Index started the day at 91.99 and ended the day at 91.99… There’s been some slippage in the overnight markets last night, and the Dollar Index is up to 92.11… Not much of a gain, but a gain nonetheless… China’s digital currency is ready for prime time, and they are signing up trade partners to use the digital yuan in trade…
For What It’s Worth… Well I told you I had a follow up article on China’s digital yuan for you today, and so without any further ADO, you can find that article here: Beijing is exploring digital yuan cross-border payments by joining with Hong Kong, Thailand, UAE and the Bank of International Settlements | South China Morning Post (scmp.com)
Or, here’s your snippet: “Beijing has joined Hong Kong, Thailand and the United Arab Emirates (UAE), along with the Bank of International Settlements (BIS), to explore cross-border payments for digital currencies, a move that could potentially create a new path for China to promote the use of yuan in global payments and weaken the US dollar’s position as the world’s dominant reserve currency.
The People’s Bank of China’s (PBOC) Digital Currency Institute, the arm of the Chinese central bank in charge of minting the country’s sovereign digital currency, announced on Tuesday that it was joining the Multiple Central Bank Digital Currency Bridge, a cross-border payments project initiated by the Hong Kong Monetary Authority and Bank of Thailand in 2019, according to a press release. The UAE’s central bank joined the project at the same time.
The expansion of the project has received support from the Bank for International Settlements (BIS) Innovation Hub center in Hong Kong, a unit created by the Basel, Switzerland-based organization to study key financial technologies for central banks. The project was originally named Inthanon-LionRock, referencing the highest peak in Thailand and the iconic hill in Hong Kong. The new name hints at a more inclusive project that is open for others to join.
It is too early to know where the project might lead, but it aligns with Beijing’s long-term ambition to use its sovereign digital currency to boost the use of the yuan in international payments. While the proof-of-concept project is currently an alliance between just Beijing, Hong Kong, Bangkok and Abu Dhabi, backing from the BIS means it is supported by an organization owned by 63 central banks.
The deal also comes weeks after the PBOC’s Digital Currency Institute set up a joint venture with SWIFT, the dominant network facilitating international payments between banks.”
Chuck again… This has got to be a real pain in the side of the U.S. having China, a communist country, beat them out of the starting gates with a digital currency…. I’m just saying… But you know the hype that will come with the U.S’s digital currency that it has to be the best there is, and all that comes with that…
Market prices 3/10/2021: American Style: A$ .7698, kiwi .7158, C$ .7905, euro 1.1890, sterling 1.3870, Swiss $1.0736, European Style: rand 15.3123, krone 8.4766, SEK 8.5210, forint 308.83, zloty 3.8474, koruna 22.0566, RUB 74.10, yen 108.80, sing 1.3471, HKD 7.7625, INR 72.93, China 6.5139, peso 21.18, BRL 5.8431, Dollar Index 92.11, Oil $64.29, 10-year 1.55%, Silver $25.74, Platinum $1,169.00, Palladium $2,360.00, Copper $4.04, and Gold… $1,712.10
That’s it for today… Except to sent a great BIG Happy Birthday to my good friend Rick Baur… it’s also the birthday of friend Chris Landers… In the old days before I began to spend my winters in S. Florida, I would have Rick out to my office and we would share a veggie pizza to celebrate his birthday… My spring training buddies aren’t coming to Florida this year… So, I won’t see Rick, Duane, and Kevin, aka webbie, until I get back home in April… If they thought my Roger Dean Stadium seats were great before, they would love the ones I’m sitting in this year! But so bad, so sad… Traditions… And that’s all I have to say about that! Seals & Crofts take us to the finish line today with their song: We May Never Pass This Way Again… That was a song that was big when I was a senior in high school, I remember nominating it for our Class Song, but some other stupid song won instead… Oh, well water under the bridge… I hope you have a Wonderful Wednesday today, and will continue to Be Good To Yourself!
Chuck Butler