Mnuchin Gives No Intervention A Vote Of Confidence….

August 29, 2019

* The dollar continues to rule the roost

* Gold fights the dollar bugs, and wins! 

Good Day… And a Tub Thumpin’ Thursday to you! Well… one of my good friends (Kevin) said to me last night… “Well, your short-n-sweet, didn’t turn out to be so short”… And we all had a laugh, because they know as you probably do too dear reader, that once I get going… The fat fingers start flying over this keyboard, and the next thing you know… It’s long, once again! But not today… I really truly am going to make this short-n-sweet, because… Well, there’s just not that much new to talk about… It’s all a lather, rinse, repeat, of the yesterday and so on… With last Friday being the only blip in the daily goings on in the currencies, and order was restored on Monday… Quicksilver Messenger Service greets me this morning with their classic rock song: What About Me?

OK… Well, like I just said above, yesterday was no different than the previous days (except last Friday) The Trade War is getting uglier by the day, The Global economy is going to hell in a hand basket, followed by the U.S. economy, The Fed has backed themselves into a damned if the do and damned if they don’t situation… The President is still trying to get his way with the Fed and get them to cut rates big… The dollar bugs continue to rule the roost, and Gold, while it didn’t gain yesterday, is doing just fine… So… that’s the wrap up… talk to you next Tuesday! – Just kidding… 

Regarding any new news on coordinated intervention in the dollar… The GATA folks sent me this: “The Treasury Department has no intention of intervention at this time. Situations could change in the future but right now we are not contemplating an intervention, Mnuchin said Wednesday in an interview with Bloomberg News in Washington.”

OK… does that sound sort of like a team owner giving his coach a vote of confidence right before showing his the door soon after? Well, it does to me… And therefore I’m going to say that intervention to weaken the dollar is on the table to discuss right now…

The U.S. Data Cupboard had nothing for us to see yesterday, and today the big kahuna is the next revision of 2nd QTR GDP, which after the last downward revision it was 2.1%, and if you’ve been reading this week, you already know that I think it will be downgraded to 1.8%… And finally down to 1.5% when the final revision comes along…

To recap… nothing new has come to light this week, other than the stuff we’ve already discussed… Chuck smells a coordinated intervention coming to weaken the dollar, even though the Treasury Sec. said “not at this time” And this one is a real McCoy, short-n-sweet letter today…

For What It’s Worth… OK, you didn’t think I would leave for a 4 day weekend, and not have a FWIW article for you did you? This one came to be from the good folks at GATA, and they supplied a link to the article… Coming GATA you can figure that it’s about Gold… which it is… and it can be found here:

Or, here’s your snippet: “Back in late summer of 2018, I made a decision that gold, and related investment vehicles, was a much better choice for capital gains opportunity than both general equities and the overall U.S. stock market going forward. I chose to hold just one general equity and to instead own gold, numerous gold ETFs and one individual mining stocks as my personal portfolio. Gold was on either side of $1,200 during that timeframe.

Since then, I continued to suggest gold, and those related items, as my personal choice over the U.S. stock market. As of now, it has proven to be a much better choice with gold up 30% and with gold-related vehicles up an average 100% or more. This contrasts, in the same period, with the flat-to-down general stock market. Gold and gold-related items have even outperformed general equities just in 2019.

While many of the remaining ‘gold bears’ and those who claim that “gold’s rise is basically behind us”, they are mostly the same folks who said the same at $1,200 and who also claimed that gold was going under a $1,000 too. Words like “relic” were common in their description of gold, and many of them even claimed that bitcoin and cryptocurrencies were the ‘new gold’. How’s that working out for them?

While I had a bias in favor of gold for the first 30 or so years of my career in and around the financial arena, I have had no such bias now for the last 5+ years. I neither promote investment vehicles that benefit from my stance nor am I employed by anyone who would benefit from my bullish talk on gold. My motivation has simply been 100% for personal profit motives that have led my viewpoints.

Believe it or not, the easy part is now over. While gold still has hundreds of dollars more of upside potential, it’s going to be more volatile and harder to hold on to, then it was the last 12 months.”

Chuck again…. This is a very long article, so make sure you have a few minutes to devote to reading it… Mr. Grandich makes some wonderful points that I’ve alluded to through the past couple of years…

Currencies today 8/29/19 American Style: A$.6745, kiwi .6344, C$ .7528, euro 1.1070, sterling 1.2209, Swiss $.9827, European Style: rand 15.3075, krone 9.0580, SEK 9.7417, forint 298.13, zloty 3.9584, koruna 23.3445, RUB 66.60, yen 106.25, sing 1.3875, HKD 7.8462, INR 71.71, China 7.1612, peso 20.10, BRL 4.1394, Dollar Index 98.26, Oil $56.18, 10-year 1.50%, Silver $18.51, Platinum $925.16, Palladium $1,484.46, and Gold… $1,535.56

That’s it for today… Another beautiful day here… I had to check the calendar, and yes we ARE in August! WOW! It looks like my home away from home in the South is going to be getting hit with some very bad weather, right now Dorian is looking like it will hit Palm Beach, which is not far from my place… UGH! Let’s hope it takes a wide turn and goes back out to sea! I’ll be cooking all day tomorrow, and then again on Saturday morning… It should be a good and fun crowd as usual and hopefully the rain stays away… Leon Russell takes us to the finish line today with his song: Queen Of The Roller Derby… I hope you enjoyed your short-n-sweet Pfennig today… and that you have a Tub Thumpin’ Thursday, and a Fantastico Friday, and fabulous weekend… If you’re on the East Coast in the South, please take precautions… And please Be Good To Yourself! I’ll see you… In September… see you when the summer’s through… 

Chuck Butler