Are We Revisiting 1973?

September 17, 3019 

* It’s all about the dollar again this week… 

* Is the Fed about to disappoint the markets? 

Good Day… And a Tom Terrific Tuesday to you! My beloved Cardinals got back on the winning side last night, but the problem remains the same… They don’t hit very much! 12 games to go in the regulars season… And The Cards have only a 2 game lead on the Cubs… with 7 of our last 12 games VS the Cubs, it’ll be a showdown at OK Corral! I promise that today’s letter won’t be as long as yesterday’s, as I had woken up around 4 am, took my chemo, as usual, and instead of going back to sleep for a couple of hours, found I couldn’t sleep, so I went downstairs to write… And write I did, my poor fat fingers were plum tired! HA! Golden Earring greets me this morning with their song: Radar Love… Which happened to be one of the best driving songs there is! But if it come on, while driving, make sure you set the cruise, otherwise you might find yourself going way too fast!

The currencies didn’t have a very good day VS the dollar yesterday, and neither did Gold, as it couldn’t hold the $1,500 figure once again…  We started the day with Gold up $20, then it slipped to $16 while I was writing, and then to end the day it held only a $10 gain…  Back and forth, back and forth, Gold goes… The price manipulators are feeling the heat these days with more charges being brought on JPMorgan traders for price fixing and manipulation, more on that in the FWIW section today, but that’s not stopping them from their brazen attacks on Gold & Silver on a daily basis… I love seeing the stories being printed about price fixing and manipulation being handled by the courts… But as I told a dear reader who emailed me: “These findings and fines on the price manipulators aren’t going to stop them… Not until somebody goes to jail, will a dirty trader think twice about what he’s about to do…”

Throw them all in Jail, as far as I’m concerned! I would be a very mean judge, folks… You did the savers wrong? Go to jail!, you lied to investors?, Go to Jail, you tried to make other people look bad, for your own leverage? Go to jail! I’m telling you, the Gov’t would have to build new jails, because these guys wouldn’t be going to The Hilton! No about 50 years of hard labor will make them think twice about all the money they cost investors over the years!

OK… I’m back now… sorry, but got all up in my craw, about these price manipulators! Again, I have a good article on the latest developments for you in the FWIW section today, so don’t skip through it! That is unless you’re one of those naysayers that still say there’s no price manipulation going on in the metals…

Recall yesterday, I said that there were reports that the Saudi’s had asked the U.S. for some of their Oil reserves to make deliveries after their Oil supply took a hit late last week by drone attacks. Well, President Trump has allowed the Saudis to tap the reserves, to even out the price of Oil, but instead, the price of Oil continued to rise throughout the day. The dollar got it’s wings from this announcement that the Saudis would have to buy U.S. Oil… And that’s what sent the currencies to the woodshed yesterday…

The only Petrol Currency to keep the Oil Price jump rally for its respective currency is the Russian ruble…  The ruble went below the 64 figure last night. Again, this is still a far way from the 35 it used to trade with, but baby steps are what’s called for… I’m just saying… 

I read an article from a guy last week who wasn’t as big of a fan of Elvira Nabiullina, the CBR’s Gov. His biggest complaint was that she was keeping rates too high, and holding back the economy… Even though she’s been behind all the rate cuts that took rates from 10%, down to 5%… (retail rates) He just wasn’t happy with her… I quickly deleted the article, and thought, well to each their own opinion, but I would much rather have a Central Bank that didn’t debase their currency with rates cuts that go to zero!

Yesterday, I gave my usual epistle on the euro being the offset currency to the dollar… And a recent report from the BIS (Bank for International Settlements) (you know the guys that do all the Gold swaps that hurt Gold’s price too!) , and the euro remains the number 2 traded currency, with the dollar holding on most of the percentage numbers… The yen came in 3rd… But I’ll give you a gold star if you can tell who came in 10th place! Give up? It’s kiwi… WOW! I said when I read the report… Little old New Zealand, playing on the same field as the BIG Boys in the world! And then I thought, it’s too bad that kiwi doesn’t have a strong & prudent Central Bank like it used to have… Those days are long gone, along with every other Central Bank in the world, except…. The CBR… Central Bank of Russia… And I’m just saying…

In the foreign markets… The economic data continues to dribble in a piece here and a piece there, but we will see the latest Confidence reports from the think tank ZEW today, and in New Zealand, later they will print their Current Account Balance… Should be good!

So, once again this week, we’re looking at it all being about the dollar… The Fed meets on Wednesday, and it’s all centered on where rates will go, and what the dollar bugs will do when the announcement is made… I said yesterday, that I’m not of the belief that the Fed will go back-to-back, belly-to-belly, with rate cuts… But then you never know, right? Jerome Powell’s press conference following the rate announcement will have the most attention paid to it, on the day…

The U.S. Data Cupboard today will have the August prints of Industrial Production and Capacity Utilization, both on my list of real economic data…  You may recall that July’s prints for these two were not good, with IP printing negative -0.2%, and CAPU falling…  The bear in me says that these two will remain disappointing at best… But I doubt the markets will pay much attention to them, as they are all grearing up for the Fed’s FOMC meeting tomorrow… 

Further on… I read where the GM employees are going on strike…  We have a spike in the price of Oil…   What is this 1973?  I laugh, because in 1973, I was starting out my career in the investment arena… Leisure suits, and bell bottoms were the rage, so, I’m hoping that the Oil price spike and the GM strike are the only two things that come back from the 70’s! HA! 

To recap… Gold rallied then got sold… the price of Oil rose some more… And the currencies lost ground to the dollar on the day… The President said the Saudis can tap the Oil reserves, and that got the dollar bugs all lathered up… And then there’s some other stuff that Chuck talked about today, but that’s the gist of today’s letter!

For What It’s Worth… OK, as promised here’s an article about 3 more JPMorgan metals traders being brought to court to face charges of price fixing and manipulation… And it can be found here:

Or, here’s your snippet: “Three JPMorgan Chase traders in gold and other precious metals have been charged with alleged market manipulation by the US Department of Justice.

The alleged conduct spanned eight years, the Justice Department said Monday.

The government charged Gregg Smith, an executive director, and Michael Nowak, a managing director and head of the bank’s global precious metals desk. Both were current employees as of Monday morning, government officials said.

The third person charged is Christopher Jordan, a former JPMorgan employee.

JPMorgan declined to comment on Monday. Instead it referred to a previous public filing in which it said it “is responding to and cooperating with these investigations.”

Between 2008 and 2016, Smith, Nowak and Jordan allegedly manipulated prices of gold, silver, platinum and palladium futures traded on the New York Mercantile Exchange and the CME Commodity Exchange.

“Smith, Nowak, Jordan, and their co-conspirators allegedly engaged in a complex scheme to trade precious metals in a way that negatively affected the natural balance of supply-and-demand,” William F. Sweeney Jr., FBI assistant director in charge of the FBI’s New York field office, said in a statement.

The government claims the defendants engaged in “widespread spoofing, market manipulation and fraud” by placing trade orders they planned to cancel before executing them, according to a Justice Department statement. The aim “was to trick” other traders into buying and selling futures contracts at prices and at times they wouldn’t have otherwise done, the Justice Department alleges.

“We will follow the facts wherever they lead, whether further up in the banks or to other institutions,” said Assistant Attorney General Brian A. Benczkowski in a call with reporters.

The US Commodity Futures Trading Commission also filed a civil enforcement action against Smith and Nowak on Monday.”

Chuck again… Yeah, of course they are innocent until proven guilty, but like I said, until someone goes to jail this will all continue…

Currencies today 9/17/19 American Style: A$ .6840, kiwi .6330, C$ .7542, euro 1.1023, sterling 1.2417, Swiss $1.0055, European Style: rand 14.7652, krone 8.9567, SEK 9.7075, forint 302.84, zloty 3.9375, koruna 23.4976, RUB 63.93, yen 108.12, sing 1.3760, HKD 7.8234, INR 71.72, China 7.0677, peso 19.48, BRL 4.0841, Dollar Index 98.59, Oil $62.05, 10-year 1.81%, Silver $17.88, Platinum $935.41, Palladium $1,596.57, and Gold… $1,504.37

That’s it for today… See? I can keep a promise to keep today’s letter shorter! Good luck to my darling granddaughter, Delaney Grace, who is in the final 7 in the audtions for Madeline, the play…  Daughter Dawn sent me a picture of her all dressed up for the school dance team last week… I can’t for the life of me believe that she’s in middle school !  I must be getting older than Methuselah! Can you believe that hockey has started their exhibition games schedule? Didn’t we just have a parade here for the Stanley Cup Champion Blues?  Or did I dream that?  HA!  Firefall takes us to the finish line today with their song: Just Remember I Love You…  Something that you should say to your loved ones every day!  I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler