Are The Election Results Hitting The dollar?

November 7, 2018

* Currencies rebound and climb throughout the night!

* What’s the Fed up to? 

Good Day… And a Wonderful Wednesday to you! Not as early today with the letter, as I allowed discretion be the better part of valor this morning, and turned off the alarm when it went off! Well, the mid-term Elections are in the books. I purposely watched something on TV last night that wouldn’t be interrupted by election returns… I can honestly say that I’m of the opinion these days, that it doesn’t matter what dolt you elect to represent your state, they aren’t going to do that once they get to Washington D.C. Kind of cynical, eh? Well, it’s just how I see it… And we can thank Woodrow Wilson for that! What? you don’t know? I’ll explain this later…  Oh, and Bill Bonner says it best when he wrote: The Bad thing about elections is that somebody wins!  The Allman Brothers greet me this morning with my fave Allman Brothers song: Melissa… 

The turnaround that the dollar was performing yesterday morning, faded as the day went on, and by the end of the day, the currencies were kicking sand in the dollar bugs’ collective faces. The currencies led by the Big Dog Euro, steadily climbed throughout the day, and then continued that climb in the overnight markets, where this morning the euro is firmly in the 1.14 handle, and the Aussie dollar is knocking on the door to 73-cents!  The Asian currencies has joined in, and even the Swedish krona is getting in on the kicking sand in the dollar’s face… 

Gold wasn’t allowed to participate in the kicking of sand yesterday, losing $4.10 on just 173,000 contracts traded, But… the shiny metal has recovered that loss yesterday already in the early morning trading today!  If Gold can at least maintain the early morning gain these two days would be a wash. Hopefully Gold can add to the early morning gains, eh? 

I took this from Ed Steer’s letter this morning which you can find at and I thought it played well with the Gold move overnight… “European Gold demand was 51.1 tonnes during the third quarter of this year, up 10% year-on-year, according to the World Gold Council.

Germany, which accounts for more than half of the region’s bar and coin investment – was up 10% to 28.4 tonnes. In late September the euro-denominated gold price fell to a two-and-a-half year low of €32,638/kg.

Unlike the European-ETF market, concerns around Italian debt and its potential to spark a broader financial crisis, prompted safe-haven buying among retail investors.”

OK, back to the currencies, which is actually an incorrect statement, as I already was talking about the currencies with my discussion of Gold… I’m just saying…  But for reasons beyond my control, the markets continue to consider Gold a “precious metal”…  

I told you yesterday that the Eurozone would print September Retail Sales this morning, and they did, with Retail Sales climbing 0.8%, which beat the expectations of 0.7% growth. If you can beat expectations, you’re a leg up on the competition!  I also talked briefly yesterday about China’s Treasure Chest of reserves. Well, they printed their total reserves’ value at the end of Rocktober this morning, and it was $3.053 Trillion, which was down from the September print of $3.087 Trillion. The difference appears to me, to be nothing but currency fluctuations.  

It appears to me that the U.S. voters have voted in gridlock… And the advancements that have been made will fade away… I’m not talking politics here, just a general feeling that we’ll experience nothing but gridlock going forward, and that won’t be good for the economy, or the dollar… I’m just saying… 

More rot on housing’s vine got exposed yesterday, when the report on Mortgage applications for last week, printed.  Mortgage Applications fell 2.5% in the week, and reached the lowest level of applications that goes back to December 2014…  The Mortgage industry talking heads are blaming higher mortgage rates… No duh!  That and the fact that houses got too darn expensive once again, and first time buyers have been hit with higher mortgage rates and very expensive homes… That a recipe for disaster if you ask me! 

The U.S. Data Cupboard is still pretty barren, but it will have one print for us today, and that is September Consumer Credit (read debt)…  With other pieces of data that reflect spending, up, one has to believe that credit card use, and home refis, have to be soaring, and if so, it will be reflected in this data…  

A $20 Billion number or anything close to it is going to tell me that debt accumulation is strong among consumers again, and that’s not going to turn out to be seashells and balloons…  

My good friend, and the Retirementor, Dennis Miller, wrote an excellent piece for his readers last week and in it he asks the question. “Is The Fed Engineering A Market Crash?”  Hey lays out the facts and then  says, “Is the Fed trying to engineer a crash before the next election? I hope it is not true. If the deep state is willing to do that to maintain their power, God help us all.” – Dennis Miller

He also quote me in this letter, let’s see what I had to say… So, let’s look at the Fed’s track record, shall we? Did you know that in 105 years, the Fed has never accurately forecast a recession?
…. Or that the current running total is nine straight annual economic forecasts that they’ve had monumentally incorrect! -Chuck Butler in Dennis Miller’s letter:

I know I’ve said this before a couple of times, but I never grow tired of saying it… If you’re retired, or even thinking about retiring, you need to subscribe to Dennis’s letter. I know that a quite a few Pfennig Readers already have signed up, but I would like to see our readers lists mirror each other! Simply go to  It’s free, just like the Pfennig! 

To recap… The currencies turned around the dollar’s rally yesterday, and have climbed higher throughout the overnight markets, led by the Big Dog Euro! Shoot Rudy! Even the Asian currencies are joining in on the kicking of sand in the dollar’s face. Gold was allowed to participate yesterday, but is playing catch up in the early morning trading, and Chuck thinks the elections have brought gridlock to the U.S. we shall see if he’s right, eh? 

For What It’s Worth… This is BIG NEWS folks, even if the media doesn’t choose to report on it… The GATA folks sent this to me of course, and it’s about a trader pleading guilty to currency manipulation, and it can be found here:

Or, here’s your snippet… “An ex-J.P. Morgan Chase trader has admitted to manipulating the U.S. markets of an array of precious metals for about seven years — and he has implicated his supervisors at the bank.
John Edmonds, 36, pleaded guilty to one count of commodities fraud and one count each of conspiracy to commit wire fraud, price manipulation, and spoofing, according to a release today from the U.S. Department of Justice.

Edmonds spent 13 years at New York-based J.P. Morgan until leaving last year, according to his LinkedIn account.

As part of his plea, Edmonds said that from 2009 through 2015 he conspired with other J.P. Morgan traders to manipulate the prices of gold, silver, platinum, and palladium futures contracts on exchanges run by the CME Group. He and others routinely placed orders that were quickly canceled before the trades were executed, a price-distorting practice known as spoofing.

“For years John Edmonds engaged in a sophisticated scheme to manipulate the market for precious metals futures contracts for his own gain by placing orders that were never intended to be executed,” Assistant Attorney General Brian Benczkowski said in the release.”


Currencies today 11/7/18… American Style: A$ .7288, kiwi .6777, C$ .7646, euro 1.1478, sterling 1.3155, Swiss $1.0029, European Style: rand 13.9318, krone 8.2995, SEK 8.9892, forint 280.17, zloty 3.7380, koruna 22.6217, RUB 65.97, yen 113.18, sing 1.3693, HKD 7.8293, INR 72.29, China 6.9160, peso 19.67, BRL 3.7353, Dollar Index 95.80, Oil $62.90, 10-year 3.20%, Silver $14.67, Platinum $876.20, Palladium $1,124.51, and Gold… $1,231.89

That’s it for today…  Did you like the use of the term: discretion over the better part of valor? When I was a young man playing football, my teammates used to use that phrase a lot… College basketball is back! They’re getting started too soon in my opinion… College Football has everyone’s attention now, they should wait to start their basketball season until Thanksgiving… But nobody asked me…  Our Blues won last night at home to boot! Go Blues! A slow start by the Blues is getting turned around, slowly but surely… By the way, who’s Shirley? HAHAHA!  The band Yes, takes us to the finish line today with their song: Starship Trooper   I hope you have a Wonderful Wednesday, and keep Being Good To Yourself! 

Chuck Butler