August 30, 2018
* Currencies are in a tight trading range
* A Day for Data here in the U.S…
Good Day… And a Tub Thumpin’ Thursday to you! I’m still dragging the line a bit, but… I already feel a bit more human being off my chemo medicine for two days now. I was doing some writing yesterday, and went to send it out, and it was lost… Nowhere to be found, and believe me I searched every nook and cranny in my laptop, but it was as if I never wrote the piece! UGH! So, I took a nap, woke up and rewrote it, this time I saved it throughout the piece, and the second time was a charm… I’ve been treated to two songs from Neil Young’s Harvest album… Out on a Weekend, and Words… And that’s how I was greeted today! My beloved Cardinals couldn’t find their bats last night, and lost 2-0… UGH!
Another day, another day of rhetoric regarding trade tariffs. I’m really growing very tired of all this talk… But yesterday, the talk was about how with a “tentative deal with Mexico” now, the hopes for successful talks between the U.S. and China have faded… I don’t like the sound of that, as I had held out hope that a trade deal could be worked out before too much damage was done to both the U.S. and China’s respective economies…
I told you yesterday, that the hoopla over the “tentative deal with Mexico” was beginning to wane, and so it did further throughout yesterday, thus returning the dollar to a defensive position on the ropes, doing the rope-a-dope… And that meant the euro climbed back above 1.17, and Gold added back $6 of the $10 it lost on Tuesday… One step forward, two backward, it seems for Gold these days…
In the overnight markets, the euro slipped back below 1.17, and Gold is down $2… All-in-all, a very tight trading range for the currencies the last couple of days. As if the currency traders are waiting for something BIG..
The early morning news is that a deal with Canada might still be had before the deadline, and that’s good news… I’ll cross my fingers that this gets done, for the U.S. economy can’t handle more hits to it from trade problems.
Speaking of Canada, they will print their 2nd QTR GDP this morning… I expect it to be around 3%, probably better than that figure when all is said and done. I’m thinking that Canada’s 2nd QTR GDP is going to be a lot like the U.S.’s 2nd QTR GDP… A bright light that is about to get dim…
I was reading James Rickard’s latest letter, and he describes something he’s seeing , and that is Gold is being tied to SDR’s… And of course the Chinese and the IMF are involved… It’s all pretty convoluted but makes sense to me… So Gold has that either going for it or not going for it, considering what direction SDR’s are moving… For those of you that are either new to class, or have forgotten the whole explanation of SDR’s, here you go… SDR’s are short for Special Drawing Rights, and they are like a basket of reserve currencies, that includes the Chinese renminbi. These SDR’s are used by the IMF to provide liquidity for member countries. There’s nothing to stop the IMF from turning the printing presses on and printing as many SDR’s as they feel like printing. But again, if you’re not a Central Bank, you can’t buy or own SDR’s…
There’s an actual breakdown within SDR’s that goes like this: A SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound. With the U.S. dollar having the largest weighting.
Might I suggest something for those of you who are interested in the diversification in currencies… Why not buy each of the SDR components? You can’t buy an actual SDR, but you can buy the components, right? Seems to me like plan… And I love a plan!
OK, enough of that! Gold has so many hands in its cookie jar that it’s a wonder to me how it ever rallies. But one day, a major reset of the currency system that we now know will change, and when it does I truly believe that Gold will hold a very important place in the new system whatever it is, and so that leads me to ask this QUESTION…. Got Gold?
The piece I was writing yesterday is for an interview with good friend Dennis Miller, the Retirementor, who writes an excellent piece every week, and it’s free! If you haven’t signed up for it yet, you’ll have to , to read what I’m saying about Central Banks and Central Bankers! go here to get that done: www.milleronthemoney.com
By the way, I talk about guys like Dennis Miller, because I believe in what he’s talking about. And… I have no financial deal with him, so I endorse his letter free of any conflict of interest…
Tom Petty is singing a song right now on the iPod, I Won’t Back Down… And that’s pretty much me in a nutshell… I won’t back down from all the scenarios I’ve talked about… I’m a big man, so it takes a bit to move me off my position… HA! Things can look as bleak as the Hindenburg blowing up, but I’ll still be there with my thoughts on the economy, Central Banks, Debts, dolts, and the fate of the dollar…
In early data printed in Europe this morning, the Eurozone Consumer Confidence remained at a negative -1.9 in August, same as July… So, there aren’t all the Happy Days are here again crowds in the Eurozone like there are here… In addition to that report, we also saw Business Sentiment from the European Commission, that showed some slippage in the current month.
I would think all these reports for the Eurozone would turn on a dime if the European Central Bank (ECB) would get off their duffs and start to dismantle their stimulus policies…
The U.S. Data Cupboard is chock-full-o-data today with the two most important prints being Personal Income and Spending for July… Right now the so-called experts are calling for Income to rise 0.3% and Spending to rise 0.4%… I’m thinking we could see some weakness here in the Spending component, as everything else we’ve seen from a July standpoint, has been weaker than expected.
We’ll also see Core Inflation for July, which is expected to rise just 0.1%, and that has to be on the Fed Head’s collective minds, don’t you believe? As I’ve said for 3 years now, going back to when the Fed first hike rates and said they wanted inflation to rise… “that’s an you know what backwards statement if you ask me… You don’t hike rates to allow inflation to rise, you hike rates to squash rising inflation! And from all accounts of inflation lately, it looks like the interest rate hikes are beginning to take a toll on inflation… I’m just saying…
To Recap… The currencies and metals rally and then get sold off, it’s all a very tight trading range that we’re seeing these days, as if Traders are waiting for something BIG… Hmmm… Canada comes to the negotiations and appears to have come to an agreement on Trade, and that’s a good thing in Chuck’s eye! Chuck goes through a long discussion about SDR’s, and an investment idea…
For What It’s Worth… I saw this article and it caught my eye for sure! And since it’s the end of the week for me, I thought we could have a little fun with the FWIW piece… And this one is about how beer revolutionized math… and probably saved the world! My good friends know that I have a thirst for a nice cold beer every now and then, so this one’s right up my alley, so to speak, and it can be found here: https://agfundernews.com/beer-revolutionized-math-just-might-save-humanity.html
Or, here’s your snippet:Amazon, Google, Microsoft, and every other firm heavily invested in big data all owe their success to beer. The pioneering work of Irish brewers a century ago made today’s big data and artificial intelligence gold rush possible. And the advances in genetics, technology, and mathematics may well be the key to humanity’s survival.
Back in 1899, William Sealy Gosset would have no idea how important his work would prove to be. He turned up on the doorstep of the Dublin headquarters of Guinness one day in 1899, hoping to secure an apprenticeship. As a newly graduated Oxford University chemist, Gosset was a natural. He began what turned out to be a 38-year career devoted to perfecting a pint of stout. Brewing, agriculture, and the entire field of statistics would never be the same again.
Gosset began with a singularly practical mission: finding a way to achieve a consistently high-quality beer at a lower overall cost. This was no small task at the world’s largest brewery, which at the time pumped out 100 million gallons of beer annually.
The basics of beer are simple. The flavor and aroma come from yeast, malt, and hops, the ingredients responsible for the difference between a Belgian ale or an American wheat, a Munich lager or an English stout. Guinness knew that it could use breeding techniques to improve its ingredients, but it would have to conduct tests to know how well or poorly newly-developed hybrid barley varieties performed. “
Chuck again… a little fun on a Tub Thumpin’ Thursday! Why not get the weekend started early? HA!
Currencies today 8/30/18… American Style: A$ .73, kiwi .6662, C$ .7737, euro 1.1692, sterling 1.3015, Swiss $1.0305, European Style: rand 14.6065, krone 8.3223, SEK 9.1150, forint 278.88, zloty 3.6670, koruna 22.0310, RUB 67.97, yen 111.50, sing 1.3660, HKD 7.8489, INR 70.80, China 6.8175, peso 19.03, BRL 4.1286, Dollar Index 94.61, Oil $69.92, 10-year 2.88%, Silver $14.66, Platinum $794.16, Palladium $982.85, and Gold… $1,204.07
That’s it for today… and this week of course… I have a big treat coming my way today, as I’m going to meet up with two of my fave people in the world for lunch today… And then tomorrow is “cooking day”, as my Big Green Egg will be working overtime! A Big weekend for me… I hope you have Big plans too, as this is the last holiday of the summer… Soon we’ll be getting the woolies out, and standing around bonfires… and while that’s nice, I prefer to get my warmth from the sun and not a fire! Man! the injury bug has been turned loose on my beloved Cardinals… 3/4’s of the infield was missing last night! Next man up! And finally, College Football begins this weekend, with lots of good first games on tap… Go Tigers! The Allman Brothers takes us to the finish line with my fave Allman Bros. song: Melissa… Now, let’s get out there and make this a Tub Thumpin’ Thursday! And remember to Be Good To Yourself!
Chuck Butler