Author: admin

February 19, 2019

* December Retail Sales print negative… 

* Currencies rally on the bad data in the U.S. … 

Good Day… And a Tom Terrific Tuesday to you! What a great weekend here in S. Florida, weather-wise, and perfect for a 4 day weekend for yours truly! There were tons of data releases on last Friday, so we’ve got to talk about those, the National Emergency , and more bricks in the wall… All that and more in today’s Pfennig! Our Blues are really playing some very good hockey these days, having won 9 in a row, and haven’t lost in February, so far! I’m thinking that it could be a case of getting hot, too early, and I sure hope I’m wrong, but the playoffs don’t start until the second week of April… I’m just saying… Not that I’m complaining about their winning streak! Bob Marley greets me this morning with his song: Three Little Birds…. People don’t worry, about a thing, cause every-little-thing is gonna be alright…

Sounds like some of the economists, that keep saying that debt doesn’t matter… Last week, the President announced a National Emergency as the border situation got worse. I’m wondering what happened to calling a National Emergency on the debt… We have reached $22 Trillion and it took only 10 months to gain the last $1 Trillion… And if you ask me… we have 2 National Emergencies… But since Trump has added to the debt party, he can’t be excluded from the former presidents that added to the debt in a Big Way, and failed to call if a National Emergency… That’s all I have to say about that today, for I’ve been beating the drum, and calling out the National Debt as a problem for a long time… Oh, and now there are something like 16 states trying to block the President’s National Emergency… Didn’t I tell you a couple of months ago, that nothing was going to get done in the next two years? I’m just saying…

The currencies on Friday, held on to the moves they had made on Thursday, and with the U.S. out yesterday, the currency market was thinly traded, with little movement. So, the majority of the move by the currencies against the dollar, came on Thursday, the day that December Retail Sales finally saw the light of day, and they were as bad as the BHI had indicated they would be, with Core Retail Sales down -1.8%….. In December… in the month that we shop till we drop… Retail Sales were a negative -1.8%… When you add in car sales they got better, but not by much, falling -1.2%…

All in all, it’s just another brick in the wall…

And to add insult to injury for the dollar bugs….. Our friends at OPEC (NOT!) have cut production of Oil again, and those curbs on production, has pushed the price of Oil above $56…

So, there’s been a ton of data in the past few days, And we’ve added quite a few bricks to the wall of bricks that represent economic data reports that are pointing to a recession in the future… We might as well go through them… First of all on Thursday, PPI (wholesale inflation) printed for January was -0.1%… So, no increase of inflation in the pipeline, which should be on the Fed Head’s minds as they prepare to shut down the rate hikes next month…

On Friday, it was more of the same, and more bricks in the wall… Industrial Production in January printed negative -0.6%… The decline was driven by an 8.8 percent decline in motor vehicles and parts, with assemblies falling from the best pace in more than two years to the weakest reading since May. The year has started out in the red as far as economic data is concerned and the markets are beginning to notice… (a note to them from me… Hi guys, glad you could join in the discussion)

For all those that keep saying this is nothing, it’s going to get better, and this is the best time…I have this to say… What we have here is a failure to understand… To not see the trees in the forest, and to have drank the Kool-Aid…

Gold had a good day on Friday gaining more than $9, and yesterday even without the price manipulators at their desks, Gold gained $3 more dollars on the day…  And is up another $3 in the early trading this morning…

Speaking of Gold… Last week I highlighted an article in which metals company, Johnson-Matthey commented on the supply and demand of Platinum and Palladium as being the reason they’ve done well…. I then received an email from a dear reader asking to ask Johnson – Matthey to also comment on Gold & Silver… Well, I guess if I had their email address I would… But to put it to the test on the number of short trades on the books, Silver continues to be the number 1 metal that has the most short sales, so much so, that it would take 185 days of Silver production to match the number of ounces of Silver that have been sold short…

Palladium continues to soar higher and higher each day… Friday, it was up $25 and yesterday it was up $24, and is working up a sweat in the early morning trading today… Heavens to Betsy, what on earth has gotten into Palladium traders?  Palladium has outperformed everything in the past two years… Everything! stocks, bonds, commodities, other precious metals, cryptocurrencies, and whatever investment invention that the propeller heads have come up with now…  I guess, I should have listened to myself, when I wrote about how I agreed with a metals company CEO, who said that Palladium was going to bypass Platinum… It has done that, and much, much more!

Well, the U.S. / China trade talks continue past last Friday’s original deadline, as an extension was granted, and there were “leaks” from the negotiators, that things were going smoothly..  Hmmm… I’d say hogwash! If things were so hunky dory, why did you need an extension of time?  All these bad economic reports from January and late last year, are showing that I was correct in saying that the Trade War would hurt both countries, the U.S. and China…  

And over in the U.K. BREXIT talks continued, but there’s nothing here to report, as I doubt little progress has been make… This is going nowhere folks, and pretty soon, there will be calls to end it all, and go back to the way things were before the BREXIT vote… At least that’s how I see it happening… 

But, pound sterling is held hostage to the BREXIT happenings, so if I see the whole thing collapsing, then I would steer clear of pound sterling, but that’s just me… 

I had a dear reader ask me to talk about the Singapore dollar (S$), so I would be happy to do so, as I’ve not mentioned it in a long time… My bad, I guess…  As I’ve talked about in the past, the S$, moves in tandem with the Chinese renminbi, as the two respective countries compete for exports, and neither country can afford to allow their currency to get out of whack with the other…   

Keeping that thought in mind… The Chinese renminbi has actually been better in recent weeks, which means the S$ is also performing better VS the dollar…  I’ve talked about this in the past, but for new readers… In Singapore they do something that I believe all countries should adopt… Their Monetary Authority of Singapore (MAS) uses a band that the currency trades in that’s tied to inflation… The only move the currency’s trading  range in the band if inflation moves…    They use the currency’s strength to fight inflations, an not willy nilly interest rate moves! 

There’s not much in the U.S. Data Cupboard today, except for the Fed’s Meeting Minutes (FMM) from their last meeting that will print this afternoon…  In December, the Fed hiked rates, and ever since they talk as if they were sorry they did so… And the Data reports from the last quarter of 2018, and into 2019, have reflected that there is a problem, Houston…  So, it will be interesting to see if the Fed Heads were talking about these problems last month when they hiked rates, or if they were still looking at the economy though rose colored glasses…  I’m thinking that they still ahd their fashionable rose colored glasses on in December, and the FMM will show that to be the case…  

• To Recap…  The currencies rebounded last Thursday, and have been trading in a tight range since, as the markets have been thinly traded since… But all that changes today, and the only piece of data today is the Fed’s Meeting Minutes.  Last week, December Retail Sales were negative -1.8%… Yes, that’s in December…  That’s not a good thing folks, and Industrial Production fell out of bed in January!  Our wall of bricks that represent bad economic data reports, received quite a few bricks in the past week…  

For What It’s Worth…   I received this email from the GATA folks over the weekend, and then Ed Steer highlighted it, so the double shot of this report was enough for me to make it my FWIW article today. It’s about how since Glass Stegal was abolished, Banks are falling by the wayside, and can be found here: http://wallstreetonparade.com/2019/02/4823-u-s-banks-have-disappeared-since-1999/

Or, here’s your snippet: “At the end of 1999, the year that President Bill Clinton and his Treasury Secretary Robert Rubin brokered the deal to repeal the Glass-Steagall Act of 1933 and allow the casino investment banks on Wall Street to gobble up deposit-taking banks, there were 10,220 federally insured banks and savings institutions in the United States. Today, that number stands at 5,397, a decline of 47 percent according to the Federal Deposit Insurance Corporation (FDIC). What exactly happened to those disappeared banks?

We examined FDIC data to see if the sharp falloff in bank numbers was from failures or mergers. We found that the vast majority of the decline resulted from banks being absorbed in mergers. By the end of 2005, six years after the repeal of Glass-Steagall, the U.S. still had 8,832 federally insured banking institutions. But in just that year alone, 315 banks were lost to mergers. By 2010, the number of U.S. banking institutions had dropped to 7,657 with 197 institutions absorbed that year through mergers. In years 2015, 2016 and 2017, there were a total of 786 federally insured banking institutions absorbed through mergers.

The loss of competition in banking services has unleashed an unprecedented concentration of the life savings of Americans being held as deposits at a handful of behemoth Wall Street banks which simultaneously engage in high risk securities and derivatives trading – the very combination that led to the epic Wall Street banking collapses in 2008 and the 1930s.”

Chuck Again….  Well, let’s see… I’ve worked at 4 banks in my life and none of the 4 are still in business…  Maybe I was to blame? HA! As if…  I know the last place I worked, I was responsible for keeping the lights on in 2008…  But that’s all in the past…  in other words, nobody remembers, or cares… 

Currencies today 2/19/19 American Style: A$.7117, kiwi .6826, C$ .7550, euro 1.1310, sterling 1.2932, Swiss $.9960, European Style: rand 14.1573, krone 8.6152, SEK 9.3627, forint 281.50, zloty 3.8300, koruna 22.7467, RUB 66.20, yen 110.80, sing 1.3563, HKD 7.8485, INR 71.40, China 6.7638, peso 19.25, BRL 3.7161, Dollar Index 96.88, Oil $56.13, 10-year 2.66%, Silver $15.83, Platinum $811.81, Palladium $1,483.46, and Gold… $1,330.19

That’s it for today…  Just watched the sunrise over the ocean with a cloudless sky… simply beautiful…  We’re in our new digs here, but the window coverings haven’t arrived yet, so the sun shines through…   I’m going to head over to Roger Dean stadium today, to watch some spring training drills by my beloved Cardinals… You would be surprised to see how many people will be there… I guess there are more baseball nuts like me around!  Dave Loggins takes us to the finish line today with his 70’s song: Please Come To Boston…   I hope you have a Tom Terrific Tuesday, and continue to Be Good To Yourself!

Chuck Butler

February 14, 2019

* Currencies get sold on Wednesday… 

* Gold can’t find a bid, but Palladium keeps going higher… 

Good Day… And a Tub Thumpin’ Thursday to you! And Happy Valentine’s Day to all of you in love with someone! Oh, why limit that, Chuck? Happy Valentine’s Day to everyone… I certainly don’t want to leave out any Charlie Browns….  I doubt that the  “can’t hurt anyone feelings” schools don’t have Valentine’s Day parties any longer, where Valentine cards are exchanged, and you always saved the best and sappiest card in the ones you bought to give out, for your favorite girl… or boy…  You always sat with anticipation, and hope that you were going to get 1. a lot of cards, and 2. that one of them would be from your secret sweetheart…  Great memories there, that kids today, no longer get to experience… That’s a shame…  The Rev. Al Green greets me this morning with this song: Love and Happiness… 

Well… It appears that we’re back to the trading pattern that gives us one day up and the next day down… I can’t stand this volatility, there’s no direction, no trend, no sense in the currency markets and metals…  Monday was the dollar’s day to dance, Tuesday belonged to the currencies, and Wednesday went back to the dollar… That would mean today, the currencies should rebound… I’m not seeing that just yet, but there’s always the December Retail Sales data to shoot holes in the dollar later this morning… 

I’m surprised, no wait, no you’re not Chuck, this is typical for the major media these days… What I’m talking about is the fact that the U.S. national Debt is now above $22 Trillion… And nary a word on TV cable news about it… Have they all been given the “shh sign”?  It certainly appears that way, to me…  But not to worry, you always have little old me to remind everyone the national debt figures! And we, as a country, have now gone over $22 Trillion, in just about 10 months time, we went from $21 to $22 Trillion… UGH!  

Since I’m going down this road I might as well keep going, right?  OK, well, yesterday, I told you about the Brick in the Wall stuff I’m watching… And I have another brick in the wall of data reports that spell recession, to add to to the wall today… Check this out… 

According to a new report from the Federal Reserve Bank of New York, more than 7 million Americans have reached serious delinquency status on their auto loans, meaning they’re at least 90 days behind on payments.

All in all, it’s just another brick in the wall…    Yes, and guess who the majority of these delinquent folks are? They’re the under 30 crowd that bought their beemer or Audi, or Infinity car with bad credit, which made their auto loan, “subprime”, and longtime readers will recall me talking about this in the past and how I thought this was going to end up in tears, and look where we’re going now… We’re heading to the crying room… 

Again, nary a word of this coming disaster on the cable TV news…  I shake my head in disgust…  One has to scour their sources to find these pieces of news that tell a story about the economy, and I don’t mind doing it, in fact I love doing it, but… would like for everyone that doesn’t read the Pfennig to have access to these items, so they can make informed decisions about investing…  That… or, get them to sign up for the Pfennig!  HA! 

There’s not much going on abroad in the data print section… The Eurozone did print 4th QTR GDP this morning… Wait, What? they’re just not printing 2018 4th QTR GDP? That sure seems to me to be very backward looking…  Anyway, it was not anything to write home about, nor was it earth shattering the other way either… Eurozone 4th QTR GDP on a year on year basis was up 1.2%, same as the 3rd QTR in 2018… So, no sing of a pending recession there, at that time… But things for the Eurozone sure have changed in the 6 weeks since the end of the year… At least that’s how the dollar bugs would have you see it… For me, I’m still on the fence, and agree that things are looking weaker in the Eurozone, but it could just be a beginning of the year slowdown, and not a trending recession, but then it might not be either…

So, more time and data is required before we make the call here…  But remember what I’ve always told you… That the euro is the offset currency to the dollar… And IF a weak dollar trend begins in earnest, the Eurozone’s data won’t bother the euro, as it will be the main beneficiary of the dollar weakness…  

Of course, the euro could find more room to rally VS the dollar if the Eurozone economy isn’t in a recession too!   During the last weak dollar trend, I recall talking to my former colleague, Chris Gaffney, and talking about how the Eurozone economy was growing, and now I was able to give additional reasons to buy euros, and not just because the U.S. was doing badly…  

Gold couldn’t find a bid yesterday, and fell $4 and change on the day…  I keep looking at the price of Palladium in wonderment… Palladium, which is used in the making of catalytic converters for gas powered automobiles, is trading above $1,400 an ounce, and I keep saying, “this can’t continue, this can’t continue” and yet it does…  I just think that given the rot on the U.S. economic vine, that the coming recession could knock the stuffing out of Palladium… But that doesn’t mean it should be ignored now, eh? 

And everyday, I get ready to record the prices for the currency roundup and get to Silver and automatically write down $15 and then look to see the change…  I’ve grown very impatient with the Silver’s ability to rally given the shortages that I’ve been talking about…    I was reading an interview on silverseek.com , with Silver guru, Ted Butler (no relation I know of)  and he had this to say… “Silver has never been more necessary. It is a vital component of just about every modern product. Production of silver has been flat for years. Quite simply, there will not be enough silver to go around and price rationing will be required.”

OK… I agree, but when’s “sooner” going to be? 

As previously stated, the U.S. Data Cupboard will finally have the December Retail Sales this morning, and given that December’s Retail Sales should be stronger than Charles Atlas, (remember him?) I’ve told you already this week, earlier, that the BHI (Butler Household Index) indicated to me that this will NOT be the strong Retail Sales report the market was anticipating a month ago, when it should have printed originally… 

Yesterday… The Data Cupboard had the stupid CPI, which showed no increase to inflation…  Now, if the Fed Heads watch this data, and I doubt they do, given the way it’s been hedonically adjusted for over 30 years, they would certainly entertain the idea of no more rate hikes are needed… 

I really don’t have much else to talk about, this morning…  I’m all twisted and turned on everything that’s going on here in the U.S.  So, I’d rather not go down one of those rabbit holes this morning… It’s Valentine’s Day, we’re all supposed to be feeling amorous, not shooting holes in thoughts and ideals!  But wait, wasn’t there major shooting of holes in the St. Valentine’s Day massacre?  So, I guess those guys weren’t feeling so “amorous” eh? HA!

To recap…  It’s one day up the next day down for the currencies these days, which would have them rebounding today, but no sign of that just yet this morning…  Retail Sales from December finally gets printed today, and could push the dollar down, if all things are created equal, that is…  Gold couldn’t find a bid yesterday, but Palladium continues to gain in price, and Chuck is getting quite impatient with Silver…  

For What It’s Worth…  Since I mentioned it earlier, I though that this article on Reuters.com was quite apropos. It’s about Palladium’s rise, and can be found here:  https://www.reuters.com/article/platinum-palladium-johnson-matthey/update-1-palladium-supply-shortfall-will-worsen-this-year-johnson-matthey-idUSL5N2084XX

Or, here’s your snippet: “A deficit in the palladium market that has driven prices of the autocatalyst metal to record highs will widen dramatically this year, specialist materials company Johnson Matthey said in a report on Wednesday.

The company, a leading auto catalyst manufacturer, said the shortfall in the roughly 10 million ounce-a-year palladium market narrowed in 2018 to 29,000 ounces from 787,000 ounces in 2017, its widest in three years.
But it said stricter emissions standards would increase demand for palladium for catalytic converters, and despite an increase in recycling, supply would struggle to keep up.

The rate of growth in secondary supplies is likely to be lower than in 2018, while primary shipments (of newly mined metal) are expected to be flat,” the report said.

Palladium-backed exchange-traded funds (ETFs) would no longer be able to bridge the gap between supply and demand by returning metal to the market, it added.

ETF holdings have fallen to around 750,000 ounces from more than 2.5 million ounces in 2015.

Palladium prices have surged by around 70 percent in the last six months to record highs above $1,400 an ounce, while platinum, once the most expensive of the major precious metals, is stuck near 10-year lows around $800 an ounce.
For platinum, Johnson Matthey said the roughly 8 million ounce-a-year market was oversupplied by 498,000 ounces last year, up from 176,000 ounces in 2017, and another surplus was expected this year. “

Chuck Again…  It’s all very interesting folks… the rise of Palladium, which longtime readers will recall me talking about over a year ago, that a mining president said that 2018 was going to be the year the Palladium passed up Platinum, and he was bang on… 

Currencies today 2/14/19: American Style: A$.7105, kiwi .6833, C$ .7540, euro 1.1275, sterling 1.2838, Swiss $1.0088, European Style: rand 14.1020, krone 8.6498, SEK 9.2700, forint 282.60, zloty 3.8443, koruna 22.8640, RUB 65.88, yen 111.05, sing 1.3582, HKD 7.8479, INR 71.07, China 6.7585, peso 19.41, BRL 3.7266, Dollar Index 97.13, Oil $54.40, 10-year 2.69%, Silver $15.58, Platinum $785.68, Palladium $1,408.18, and Gold… $1,306.00

That’s it for today, and tomorrow, and Monday, which is the President’s Day holiday! A 4-day weekend for yours truly, and after this past week, one that is well deserved, if I may say so myself! HA!  Well, did you do good with your Valentine’s Day gift for your loved one?  I have been instructed that I should not waste money on cards, flowers, candy, and a whole list of other things… So, a kiss is all I have to offer today…  I hope you do better than that!   HA!   I smell bacon being cooked, I guess I’m getting a big breakfast for Valentine’s Day! YAHOO!  The first day of Spring Training was shortened by the rain that fell here all day yesterday… Beginning tomorrow, we should be back to normal, sunny and 80, each day… Uriah Heep takes us to the finish line today with their classic rock song: July Morning…  I used to have an 8-track player in my car, and had an 8-track recording of Uriah Heep Live, and I along with my good friend, Preston, would play that at high volumes over and over again…   I hope you have a Tub Thumpin’ Thursday, Fantastico Friday, Marvelous Monday, and an amorous Valentine’s Day… And remember to Be Good To Yourself!

Chuck Butler

 

 

 

February 13, 2019 

* Trade talks at an impasse… again!

* RBNZ & Riksbank don’t follow the Fed’s script… 

 

Good Day… And a Wonderful Wednesday to you! Another beautiful day here yesterday, saw me outside reading a new (for me) Jack Reacher book… Harry Bosch, Alex Cross, and other similar books all keep my attention longer… But I in no means is someone that says, “the book was so good I couldn’t put it down to go to sleep”! For me… When it’s time to go to sleep, it’s time, period! The currencies rebounded yesterday, as I was beginning to think that their rebound of two weeks ago, was going to be another of those false dawns we’ve seen in the past year… So, that and a few more things are what’s on today’s docket… The Atlanta Rhythm Section (ARS) greets me this morning with their song: Imaginary Lover…

OK… I’m still seething about the new Green Deal that the socialists are trying to get people to like…. It’s all a bunch of nonsense to me, with no ability to pay for any of it, and things stated that a 5th grade math wiz would be able to point out as ridiculous… And that’s all I’m going to say about that today… Like I said, no politics, except when it comes to the idea that this country would be better off as a socialist country, I just wont’ let that slide…

And it IS my letter, with no upper management interference in what I say, so hopefully you don’t get so upset with me that you unsubscribe… For if you did, you would rue the day, you did so, because then, who’s going to tell you, for free, the truth, and all the other stuff I tell you?

Well, like I said in the opening the currencies, led by the Big Dog euro, rebounded yesterday, and through the overnight markets… The euro bounced off the matt, and got back up swinging left hooks, and uppercuts to the dollar bugs… Soon the dollar bugs were retreating to their homes in the wall boards…

Somebody asked me why I use the term dollar bugs, and instead of dollar bulls, and I replied, well, they call people like me “Gold bugs”… So I just return the favor!

So, what led the way for a currency rebound… Well this was in Reuters.com last night, “The dollar edged lower against its peers on Wednesday, as rising expectations of a breakthrough in the trade impasse between United States and China led investors to put money into the euro and Asian currencies.”

Oh, no… another trade talk impasse? Just when everyone thought these talks were going to come out like seashells and balloons… They don’t, and everyone goes home with their collective tails between their legs….

And here’s another thing that was going around the internet yesterday, and it rang so true to what I was saying yesterday morning about the new “Tentattive deal to avert a Gov’t shutdown”… President Trump doesn’t like it… Even though some in the conservative party are asking him to reconsider, he’s sticking to his guns… so far… and that led many traders to believe a Gov’t shutdown will happen this Friday…

However, the reports this morning is that Trump is “coming around” to the tentative agreement… 

So, the old one-two, to the body and then the chin of the dollar yesterday… Just to show in broadstrokes if you will the hit the dollar took yesterday… The dollar index yesterday morning was 97.05, and by the end of the day it was 96.65… Now, the question is whether or not the currencies can more forward from here… I think they can, I think they can, I think they can…… Or better said, I think they should, I think they should, I think they should…

Well, we’ve had two Central Bank meetings since yesterday… First, overnight, the Reserve Bank of New Zealand (RBNZ) left rates unchanged, and did the Riksbank of Sweden this morning… But both had a different tone to them than what we’ve hear lately, from the likes of the Fed, and the Reserve Bank of Australia(RBA)…   both the RBNZ and Riksbank weren’t exactly bubbly about their respective economies outlooks, but, as one observer pointed out, they certainly didn’t share the Fed’s pivot from the last two weeks….  So, both currencies have joined the euro in the rebound VS the dollar. 

Do you know Pink Floyd’s song: Another Brick In The Wall? Who would have thought I could take a song released in 1979, and probably played on all FM radios over and over again in the early 80’s, and make it work with economic data? Well, I did… And for all of you who don’t have any idea of what I’m referring to… Think of it as a wall that’s being built with all the data prints that show were heading to a recession… And with each one, you sing… All, in all, it’s just another brick in the wall…

Well, one of my other fave economists was on twitter last night… Danielle Di Martino Booth, had this to say… “Those that Expect a Better Economy is down to 6% from 16%. It was 34% six months ago. There were also notable declines in those that Expect Higher Sales and it’s a Good Time to Expand.” – Danielle Di Martino Booth on Twitter

Chuck again… Just another brick in the wall… The wall that’s being built of bad economic data that’s pointing us to a recession… All in all it’s just another brick in the wall…

OK… The U.S. Data Cupboard come back today with the stupid Consumer Price Index (CPI)…  I don’t like this data because it’s been so hedonically adjusted for more than 30 years now that it does not resemble the old staid basket of goods one iota any longer! But… It’s data… and it’s going to print today, and getting data prints out has been like pulling teeth with a pair of tweezers! So, I’ll take it, but, am far more interested in tomorrow’s print of December Retail Sales, of which I’ve already told you what the BHI indicated to me! 

And finally… Gold…  There just doesn’t seem to be a whole of interest in the shiny metal these days… The number of contracts traded each day have dropped to around 135-150,000, and the moves are small in Gold. Yesterday, for instance Gold was only able to eke out a gain of $2.60, and this morning it’s basically flat…  

There was news last night that China got back into the Gold buying saddle…  The reports are that China added 11.8 Tonnes of physical Gold in January, to their reserves…  Between China and Russia, they certainly seem to be on a mission from God, to corner the physical Gold market…  This January purchase followed December’s purchase of more than 10 Tonnes of Physical Gold…  So, it’s not just a one and done deal, here folks… 

To recap… The currencies bounced back yesterday, led by the euro, and news that the China / U.S. trade talks were at an impasse, and news that President Trump wasn’t happy with the tentative deal to avert a shutdown…  He’s since said to be “coming around” to the deal, but for now, it’s a no-go in my opinion.   The RBNZ and Riksbank both left their rates unchanged, but both were not gloom and doom in their statements, and that has boosted these two currencies this morning.   And China is back to buying boat loads of physical Gold…. I’m just saying… 

For What It’s Worth…  Well, we finally topped $22 Trillion in national debt yesterday…  That only took about 10 months…  So, later this year before we turn the page on 2019, we should be looking at $23 Trillion… UGH!  This article was sent to me by longtime reader, Bob… who I thank very much… and can be found here: https://www.usatoday.com/story/news/politics/2019/02/12/national-debt-tops-22-trillion-first-time-ever/2849978002/

Or, here’s your snippet: “The national debt surpassed $22 trillion for the first time on Tuesday, a milestone that experts warned is further proof the country is on an unsustainable financial path that could jeopardize the economic security of every American.

The Treasury Department reported the debt hit $22.012 trillion, a jump of more than $30 billion in just this month.

The national debt has been rising at a faster rate following the passage of President Donald Trump’s $1.5 trillion tax-cut package a little more than a year ago and as the result of congressional efforts to increase spending on domestic and military programs. The nation has added more than $1 trillion in debt in the last 11 months alone.

“Reaching this unfortunate milestone so rapidly is the latest sign that our fiscal situation is not only unsustainable but accelerating,” said Michael A. Peterson, chief executive officer of the Peter G. Peterson Foundation, a nonpartisan organization working to address the country’s long-term fiscal challenges.

For Americans, the growing debt should be a concern, experts said, because over time it can push up interest rates for consumers and businesses. The higher rates can ripple through the economy, nudging up rates for mortgages, corporate bonds and other types of consumer and business loans.”

Chuck Again…  I feel like this is a Chinese water torture folks… Watching the debt rise again and again… in 2010, the debt was $10 Trillion and I thought that was bad!  Look where we’ve gone in 8+ years…  Unbelievable, and unsustainable in the long run, folks…  Got Gold?

Currencies today 2/13/19 American Style: A$.7118, kiwi .6823, C$ .7560, euro 1.1330, sterling 1.2958, Swiss $1.0044, European Style: rand 13.8585, krone 8.6155, SEK 9.1830, forint 280.65, zloty 3.8190, koruna 22.7955, RUB 65.72, yen 110.60, sing 1.3558, HKD 7.8482, INR 70.80, China 6.7774, peso 19.30, BRL 3.7356, Dollar Index 96.81, Oil $53.72, 10-year 2.68%, Silver $15.69, Platinum $791.30, Palladium $1,410.77, and Gold… $1,311.05

That’s it for today, except to say a Great Big Happy Birthday to my very good friend Duane!  I’ll be seeing him at the end of next week, so I’ll save my singing Happy Birthday to him for when he arrives!  But until then, Happy Birthday!  Our Blues won again last night for 6 in a row… Duane is a huge Blues fan, so they won for his birthday!  And my beloved Missouri Tigers won a basketball game last night VS Arkansas! WOW!  Thanks to all who’ve sent remedies for the gout to me… I couldn’t begin to use all them! I just know that the gout is freakin’ painful! And I’m glad that has subsided…  Tyrone Davis takes us to the finish line today with his song: Can I Change My Mind…  Don’t know that one? YouTube it or Google it… I hope you have a Wonderful Wednesday, and remember to Be Good To Yourself!

Chuck Butler

 

 

 

February 12, 2019 

* The dollar climbs to a two-month high… 

* Pitchers & Catchers report today! 

Good Day… And a Tom Terrific Tuesday to you! Another day on steroids and I’m almost out of the woods with regards to pain in my left elbow from the gout. Only two more to go, and then I should be pain free, which would be a good thing, because the steroids will have run out! I really thought I would stir up a hornet’s nest yesterday with my rant on the socialists growing in this country… But, so far, so good in the Pfennig Replies box. I did have multiple back and forth emails with my former boss from Mark Twain Bank Days, Ed Bonawitz, who wanted to impart some of his thoughts on me… I returned the favor to him! Big Head Todd and the Monsters greet me this morning with their song: Tomorrow Never Comes…

Well, news last night that the U.S. lawmakers might be able to avert another Gov’t shutdown, had the overnight markets all excited as school girls, when the idol comes to town! The dollar bugs continued to come out of the wall boards, and buy dollars, and what looked to be a good run in the coming for the euro just two weeks ago, when it was trading over 1.15, has gone bad, and the euro is now trading below 1.13! And all the other currencies are following the Big Dog down the slippery slope having traded places with the dollar, that was on the slippery slope just two weeks ago!

And now yesterday, the International Monetary Fund (MF) had decided that their outlook for Global Growth needed to be brought backwards, for these reasons: trade tensions and tariff escalations, financial tightening, uncertainty related to (the) Brexit outcome and spillover impact and an accelerated slowdown of the Chinese economy… Now let me see how many of these I’ve talked about already for months now…

1. Readers of the Aden Research that were Dow Theory Letters subscribers saw my cartoon about tariffs months ago, and what I thought they would end up doing to the U.S. economy… And of course, I told you dear Pfennig readers so many times, I’ve sounded like a broken record!
2. I’ve been warning about the BREXIT stuff for months now…
3. Fed rate hikes have been a target of mine since the first one that came down the pike 3 years ago…
4. And a Chinese slowdown… Well, if trade tariffs were going to hurt the U.S. economy, they sure were going to do the same for the Chinese economy… This is a case of what’s good for the goose is good for the gander, folks…

So, all 4 boxes have been checked, Chuck… Looks like you were months ahead of all those highly paid economists at the IMF! Well, I would pat myself on the back, but I don’t want my gout getting inflamed again!

About 10 days ago, I talked about how it appeared but it wasn’t certain that the Eurozone economy was heading back to recession, and that the Chinese economy was too, and that those two would drag the U.S. economy into a recession faster than most think it will hit the U.S.

I do believe however, that we’ve seen the last of the Fed rate hikes for now… There won’t be one in March, and it’s my belief that Fed Chairman Powell, is ruing they day that he hiked rates in December… One of my fave economists, David Rosenberg, had this to say on his Twitter page last night… “Pundits are comparing today to 1998. Greenspan cut rates aggressively in the summer and fall that year. Powell has done what exactly except admit verbally he made a mistake last December?” – David Rosenberg on Twitter…

And I also believe that it would be prudent thing to do for Powell and the other Fed heads to stop, hey, what’s that sound, everybody knows what’s going down… For What It’s Worth – Buffalo Springfield…

Well, all this talk about this stuff sure puts a guy in a gloomy mood… But I won’t let it get me down, it’s only castles burning, and besides… Pitchers and Catchers report to Spring Training today! YAHOO! I read where the entire projected infield have already been in camp and practicing, which I would think was a prudent thing to do, given the Cardinals led the league in errors last year! And that’s NOT Cardinals baseball, folks… My spring training tickets are one row and aisle away from the President and GM’s seats… And I let them know last year that I wasn’t happy with the defensive play, and that was in Spring Training! They acted like they didn’t hear me, but… as my wife says, I have a voice that carries and probably the left fielder bleachers heard me!

One time, I had to give a presentation without a microphone, as it had gone on the fritz… I spoke to a room of 250 without going hoarse!

Ok, back to regular programming… Gold didn’t lose any more ground yesterday after losing $9 in the early morning trading,  and did manage to come back to close down $6 on the day… and this morning Gold has just about gained back that $6 loss with a more than $5 gain in the early trading… Up one day, down the next, this is driving me to my wit’s end!

Here’s some good news for Gold though… The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) today re-introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.
The Monetary Metals Tax Neutrality Act (H.R. 1089) backed by the Sound Money Defense League and free-market activists – would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.
“My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and are legal tender,” Rep. Mooney said.”

I pulled that from LinkedIn last night… and now it’s all over the internet… so have fun with that Mr. Mooney… Let’s see if the hamburger that’s been thrown at the wall, ends up sticking to it! Yes, that good old Constitution… I guess somebody in D.C. still reads it, and knows what it says! HA! I still keep my portable Constitution with me that  was given to me by the good folks at Hillsdale College, where the Constitution is still taught!

Ok… more to talk about here… It’s not all gloom and doom for every currency as the dollar bugs have their way with the euro and others… The Russian ruble has gained more than 3% VS the dollar this year so far… That’s only 6 weeks into the new year, so if we do some algebra, that would mean the ruble would be up more than 25% in a year! Well, calm down here Chuck! Currencies don’t normally move in a linear fashion… So, let’s just stick to the ruble is up so far this year, and things are looking good for this to continue…

OK, before we head off into the sunrise…  The tentative deal to avert a Gov’t Shutdown is NOT the deal that the President wanted to see, so this is going to be sticky folks… and for that I can’t believe the dollar bugs are so excited about it…  What happens if the President sticks to his guns and says no to the deal?  All this excitement turns to disappointment, and well, I would think that all this dollar buying that has brought the dollar to a two-month high, would be reversed…  Just a thought from the cheap seats… 

The Data Cupboards around the world are busy with all kinds of non important data prints…  But there is an ECOFIN meeting in the Eurozone today,  I don’t expect any grenades from left field here… but thought I would mention that it’s going on…  

Here in the U.S. the Data Cupboard is back on board today, after yesterday’s vacation. But the only thing I see for us today that would move markets is a speech by Fed Chairman Jerome Powell, which will be gone through with a fine tooth comb to see if he still shows and says dovish things… 

To Recap…  The dollar bugs are as excited as school girls when the teen idol comes to town, as there is a report that there could be a tentative deal to avert a government shutdown… It’s not the deal that the President wanted, so this is going to be interesting folks… hold onto your hats!  In the meantime the dollar bugs are buying dollars by the truck load, and the dollar is at a two-month high…   The IMF downgrades its global growth outlook, and Gold goes up one day down another… 

For What It’s Worth… I’ve been following this trial regarding price fixing in Gold, and the GATA folks sent me a note last night telling me that Deutsche Bank had been told to pay $60 Million to settle the price fixing case… You can read it all here : https://www.reuters.com/article/us-deutsche-bank-settlement-gold-idUSKBN13R2N1

Or, here’s your snippet: “Deutsche Bank AG has agreed to pay $60 million to settle private U.S. antitrust litigation by traders and other investors who accused the German bank of conspiring to manipulate gold prices at their expense.

Deutsche Bank denied wrongdoing. The bank in October agreed to pay $38 million to settle similar litigation over alleged silver price manipulation.
Amanda Williams, a spokeswoman for the bank, declined to comment. Lawyers for the plaintiffs did not immediately respond to requests for comment.

The case is one of many in the Manhattan court in which investors accused banks of conspiring to rig rates and prices in financial and commodities markets.

Chuck again… Well, as I’ve always said, these fines are nice, but they are just looked at as a “cost of business” for the firm paying the fine… Nothing will ever change, until people start getting sent to jail for these crimes!

Currencies today 2/12/19 American Style: A$.7087, kiwi .6735, C$ .7557, euro 1.1276, sterling 1.2853, Swiss $1.0088, European Style: rand 13.7783, krone 8.6872, SEK 9.2716, forint 282.06, zloty 3.8370, koruna 22.9222, RUB 65.64, yen 110.55, sing 1.3575, HKD 7.8480, INR 70.70, China 6.7764, peso 19.26, BRL 3.7363, Dollar Index 97.05, Oil $53.26, 1o-year 2.68%, Silver $15.82, Platinum $790.38, Palladium $1,391.07, and Gold… $1,313.53

That’s it for today…  well, today is Lincoln’s Birthday… And it was also the birthday of my oldest sister, Brenda, who passed away way too young from cancer. I think of Brenda a lot especially when February comes along… Or when I hear a song that used to play when she was teaching me to slow dance…  OK, Pitchers and Catchers report today…  And by Friday the whole squad will be in camp! YAHOO!  Our Blues play the Devils tonight in St. Louis and attempt to keep their winning streak going…  OK… Foghat takes us to the finish ling today with their classic rock song: Slow Ride…   I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself! 

Chuck Butler

 

 

 

February 11, 2019 

* Dollar continues to hammer the currencies…

* Will Gold’s Maginot line of $1,350 be taken out soon? 

Good Day… And a Marvelous Monday to you! I can tell you right now that I’m looking forward to this coming weekend, when it’ll be another 4-day weekend for yours truly… And that would mean that it would only be one more week till my spring training buddies arrive and we start attending baseball games! The month of January always seemed to be the longest month to me, and the month of February always seems to fly by, which is good, because March follows! I’m really in a foul mood this morning though, having gone through the latest report from the socialists… And no I’m not talking about the Russians, or the Chinese, or even Greece… I’m talking about here in these United States of America… Now, longtime readers know I don’t like to talk politics here, so before I go further down that rabbit hole, let me just repeat something that I used to have on a presentation slide… It’s a Quote from Margaret Thatcher, who said, “The problem with socialism, is that eventually you run out of other people’s money”… There, that’s as far as I’ll go down that rabbit hole, but you should have heard me on the Juno Beach patio yesterday! 10cc greets me today wit their song: The Things We Do For Love… Like walking in the rain and the snow when there’s nowhere to go, and you feel like a part of you is dying…

OK… Well, I sure love my steaks… And peaceful settings… But that’s not what You came to read about in this letter today… So, we’ll talk about the currency markets, economies, and some other things as we go through today’s letter… Ready? Let’s go!

On Friday, last week, we had no data prints on the docket, but the dollar buying that began on Wednesday last week continued through to the weekend…  And continued to continue through the overnight trading too, bringing the currencies down even further VS the dollar… You know, what? I see where the dollar bugs are thinking that this is the right thing to do, because, it sure looks to me, as I stated last week, that the Eurozone is heading to a recession, and China is heading to a recession… And then along came Mary… I mean along came Australia, who had their Central Bank come out and lower the growth forecast, and then talk about the possible need for a rate cut…  

What we have here is a case of not being able to look at oneself in the mirror… The dollar bugs can’t bring themselves to look in the mirror, and everyone else’s problems get the spotlight, but theirs do not… I’m just saying… 

There’s one economy in the world right now, that is kicking tail and taking names later, and it’s Russia… Tass reported this past weekend that the ratings agency Moody’s has upgraded Russia’s Global rating and placed their economic outlook at “stable”… The Russian ruble rallied on the news, but is still being handled with kid gloves, if you will, by traders and investors, hedge funds, etc. These guys can’t seem to figure out how Russia is doing this with the economic sanctions still in place on their economy. I think these guys all think that Russia is doing it with smoke and mirrors…

When the smoke and mirrors are what’s in play here in the U.S. Just one economic report after another, save for the trumped up jobs report, is pointing toward a recession here in the U.S. And when this one comes, it will have pent up frustrations of not being able to run the course and clean out the excesses of previous recessions… So, the Fed had better act quickly, or they will be behind the recession 8-ball, and if that happens, everyone will be waiting for the Fed to “Scratch”, and lose the game, for as I’ve told you before, historically, at the start of a recession interest rates on average have been above 6%, and the total rate cuts administered during a recession have averaged 400 Basis Points or 4%… And where are rates right here, right now, as Jesus Jones sang in the 90’s? Well, by Joe they’re at 250 Basis Points or 2.5%… There sure won’t be enough rate to cut to stop the recession in its tracks, now will there?

That’s when, I believe we’ll see another round of Quantitative Easing, (QE), and or negative deposit rates… I told you last week that the Fed propeller heads had come up with a report that said that if the U.S. had opted for negative interest rates in 2009, instead of QE, that the economy would be further long in the growth cycle… Of, course being the smart Alec that I am… Yes, negative despost rates have done wonders for Japan, Sweden, the Eurozone, and Switzerland, haven’t they?

So, it would be a case of: What fails there, can’t possibly fail here, because we’ll do it better… Now where have I heard that line before… You that’s right, never mind…

This week we will see a lot of small economic reports, both here in the U.S. and abroad… With the Reserve Bank of New Zealand (RBNZ) meeting on Wednesday probably the biggest item on the docket this week, abroad, that is… Here in the U.S., we’ll finally get to see the color of December Retail Sales! This report was delayed because of the Gov’t shutdown, but then once the shutdown was over, it was delayed more… And last week, I mentioned or questioned, if you will, what the report was going to show us, and if the Gov’t was attempting to put it out under the cover of darkness because it was so bad? We’ll finally get to see this report on Thursday this week, and I’m betting a dollar to a Krispy Kreme, that the report will be awful… show no growth in the month that houses the Christmas shopping season, and when they take out auto sales, it will be negative…

I can’t wait to hear what the Spin Doctors, and not the ones that sang Two Princes, spin this report to the public, because they’ll have some explanin’ to do Lucy!

Ok.. The BREXIT Negotiations are begun again… Back to the drawing board as they used to say… Then it was a “white board”, then it was a template on the computer screen… now it’s probably housed on somebody’s watch… This is Dick Tracy… I just don’t see how this is going to get done with the U.K. coming out smelling like roses… So, I would steer clear of pound sterling until we know just what’s the negotiators sleeves…

Gold was able to gain a bit on Friday, with a move higher by $4.20… I saw a line on Twitter yesterday that talked about how the Central Banks that have been buying Gold ahead of a Global shutdown, are looking pretty, while the Central Banks that have not been buying Gold, will be doing the crying… Well, it’s crying time again, you’re gonna leave me… I can see that far away look in your eyes…

And skipping backwards today, to Russia… I firmly believe that this is one of the reasons that they have been on the recovery tracks while everyone else is fumbling, bumbling, stumbling along… They increased their buying of Gold using foreign currencies that they took in that would normally have sat in their foreign exchange reserves…. So, while Rome burns, Russia, China Turkey, Brazil, India, all play the fiddle…

The GATA folks sent me a note last night from Swiss Gold guru, Egon Von Greyerz, who believes that what he calls the Maginot line of $1,350 that Gold has been held under for 5.5 years, will be taken out soon… Well, soon doesn’t mean today, because in the early morning trading Gold is getting sold  and is down $9…    

Greyerz believes that, “the West is almost out of metal, having sent much of it to Asia, and Greyerz predicts that $1,350 will be penetrated soon, upending the financial system.”   

Chuck again… I have to think that he’s correct, but then I’ve been saying this since the end of spring last year… UGH!  

Can you tell I’m hopping mad this morning, or just more upbeat than I was Wednesday and Thursday last week? I’ve had the gout before in my big toe joint… Very painful and lasts about 10 days, steroids can shorten that time… But last week, I began noticing swelling in my left elbow and soon after, sharp piercing pain shooting in my elbow when I tried to move my arm… I finally broke down on Friday and went to see a doctor about it, and they confirmed it to be gout in my left elbow… Hello, am I on the air? Ok, I’m a first time caller, and want to say that gout in the elbow was the first I had heard of that, I’ll hang up and listen to your answer… Yes, it’s very common…

The U.S. Data Cupboard is empty again today, no data reports, even small ones are on the docket today, bu when we come back to the Cupboard tomorrow, things will be different…  You know, I used to say that when there was no data that it would probably be bad for the dollar, but these days with one data report after another pointing to a recession, the days without data are good for the dollar, because the rot on the economy’s vine isn’t being expose for everyone to see… 

Oh, and the elephant in the room this morning is the return of the Gov’t shutdown that doesn’t appear to be going in a direction that would lead one to believe that it could be averted… UGH! 

To Recap…  The dollar bugs have the conn and don’t want to look in the mirror… Russia’s credit rating was upgraded by Moody’s along with their economic outlook…  Is Russia doing this with smoke and mirrors? Chuck doesn’t think so, but apparently the rest of the world’s investors do…  The economic data prints here and abroad pick up steam this week, with the RBNZ rate decision on Wednesday a highlight for sure, along with the double-delayed December Retail Sales here in the U.S. 

For What It’s Worth…  Well…  Debt is everywhere folks… Gov’t, Corp and individual debt levels are unprecedented, but don’t just take my word for it… The folks at zerohedge.com Did a great job of explaining it all,  with graphs and everything and that can be found here: https://www.zerohedge.com/news/2019-02-10/debt-trifecta-all-time-highs-billionaires-panic

Or, here’s your snippet, sans graphs!: “The “trifecta” of national, corporate, and consumer debt has reached all-time highs, and could prove to be catastrophic if a recession hits.  

In just the short decade since 2008, the debt has jumped from $10.6 trillion to $22 trillion. It also comes with a deficit that’s currently over $1 trillion currently. The interest payments alone may be forming a “black hole” from which the U.S. may never escape.

These facts alone should raise concern in any interested observer.  

The total amount of corporate debt has never stopped rising since 1950. Corporations have taken on a record level of debt since 2007. One of the main problems with this type of debt, aside from getting repaid, is that some corporations are using it to buy back shares of stock. Instead of this “sleight of hand,” you’d think that they should be using it to fund growth and create jobs.

But one thing is certain, the piper will need to be paid at some point. When that happens, who knows what can happen to the economy.

 Total consumer debt is near $4 trillion, and has been rising steadily since 1975. But it has risen a staggering 47%since 2008, and shows no signs of stopping. “

Chuck again, and the one thing that is like kryptonite to large debt loads is rising interest rates, which is exactly the scenario that has been in place for the last 3 years, albeit a very slow Chinese water torture drip-like… None of this is going to end up with Sunshine, lollipops and rainbows, folks… I’m just saying… Got Gold? 

Currencies today 2/11/19 American Style: A$ .7085, kiwi .6750, C$ .7534, euro 1.1310, sterling 1.2927, Swiss $.9973, European Style: rand 13.7917, krone 8.6818, SEK 9.2686, forint 2822.64, zloty 3.8175, koruna 22.8306, RUB 65.41, yen 110.18, sing 1.3582, HKD 7.8476, INR 71.12, China 6.7431, peso 19.12, BRL 3.7272, Dollar Index 96.79, Oil $52.28, 10-year 2.64%, Silver $15.73, Platinum $792.20, Palladium $1,395.10, and Gold,,, $1,307.48

That’s it for today…  A little longer than usual but that’s OK…  Not a good weekend on the hardwood floors for both Mizzou and St.Louis U this past weekend… UGH! I mentioned last week that our Blues had seemed to have found something… And they won their 5th consecutive game over the weekend with back to back wins over Nashville… Skate boys, skate!  A beautiful weekend, weather-wise here…  I had better button this up here as I’ve talked way too much today!  The Eagles take us to the finish line today with their version of the song: Seven Bridges Road…   And with that, I hope you have a Marvelous Monday, and continue to Be Good To Yourself!

Chuck Butler

February 7, 2019

* Dollar buying continues

* Chuck sees a Global Recession on the horizon… 

Good Day…  and a tub Thumpin’ Thursday to you! I doubt I’ll do any Tub Thumpin’ today, as I’m still under the weather, and not sleeping much. But one never knows, I could have a miraculous recovery today! Yeah, that’s the ticket!  The day after the SOTU brought more dollar buying yesterday, for reasons beyond me..  Buddy Miles greets me this morning with his song: Them Changes… 

The dollar continues to recover from last week’s selloff, that came as a result of Fed Chairman Jerome Powell’s about face on rate hikes and balance sheet unwinding, and this week, all that has been forgotten, apparently… We have had some developments overseas in the overnight markets, but they pale in comparison to the about face by Powell, last week…  So, in my humble opinion, this dollar buying is unwarranted, and based on the events of last week, the dollar buying should be dollar selling…  Fickle traders… 

OK… Front and Center on the overseas developments, saw the Reserve Bank of India (RBI) cut rates in a surprise move overnight…  The Indian economy has been teetering for weeks now, and even though the rate cut was surprising, it was not unwanted…   

In the Eurozone overnight, the European Commission cut their growth forecast after Industrial Production in Germany, the Eurozone’s largest economy, was weaker for a fourth consecutive month…  The Commission believes that Global trade tensions and growing public debt are causing a slowdown in Germany, complicating the European Central Bank’s (ECB) plans for an interest rate hike this year.  Yes, they believe that this slowing of the economy in Germany is going to put the kyboshes on the ECB’s plans to bring their monetary policy out of the stimulus business… 

One can imagine that the euro isn’t performing very well, when you have statement like that coming out and filtering through traders’ collective minds…   The Ausie dollar (A$) fell sharply on Wednesday after the Reserve Bank of Australia (RBA)  opened the door to a possible rate cut as it acknowledged growing economic risks.

So, the news from outside of the U.S. is that of weakness… India cuts rates, the European Commission cuts their growth forecast,  The RBA talks about weakness, and then add those things to the about face of the Fed last week on rate hikes, and what we have here folks, is a Global recession in the making… 

I read on Reuters this morning that a recent poll of 70 currency strategists revealed that most of them believe the dollar will give back its gains of 2018 this year…  Well, if that’s the case, why then are they buying dollars now?  Fickle traders… 

With a Global recession on the horizon, along with lower rates here in the U.S.  what asset should be viewed as “worthy”?   That’s right, if you guessed Gold, then you get a happy face sticker!  The Central Banks around the world that have been buying Gold in recent years in preparation for this Global recession, are sitting pretty…  And Central Banks that haven’t been buying Gold, well… they’re going to have some problems… At least that’s how I see it playing out, and in my opinion, I could be wrong…  But I doubt it

Gold is up a couple of shekels this morning, after losing $8.60 yesterday…  Gold held just above the $1,300 level basically because of the problems with Global Growth I just talked about, and let’s lose focus here… There’s going to be another Gov’t. Shutdown here in the U.S. soon…  And when it does come, I’m of the opinion that a National Emergency will be proclaimed, and then the you know what hits the fan for the dollar, and Gold should be the benefactor…    

I received an email from a dear reader a day or two ago, asking me about Silver, and was I as bullish on Silver as I am Gold?  Well, of course I am! As I’ve said a few times in the past… When I talk about Gold, you can insert Silver there too, but Gold gets all the hype and headlines, so I don’t have to say Gold & Silver every time I talk about metals…  

I don’t think I gave the thought of a Global Recession enough spotlight this morning, folks… This looks to be quite real, and the RBA talk is very important, as I’ve said for a long time now Australia is the proxy for Global Growth, and if the RBA is not talking of rate hikes, and instead choosing to talk about a slowing economy and the possible need of a rate cut, then Global Growth is off the table, folks…   No Revival Tent goings on here, just country after country hunkering down, and heading for the storm cellar… 

I’ve to quit writing today… I’m getting really pessimistic about what’s going on… So, let’s just head to the Big Finish and get this out the door!

To recap…  The dollar buying continues, after a series of events overseas that has Chuck thinking that a Global Recession is in the cards.  A majority of currency strategists believe the dollar is in trouble for 2019, but right now, they’re buying dollars… Fickle Traders…   The RBI cuts rates overnight, and Gold lost $8.60 yesterday… 

For What It’s Worth…  Since I was talking about a Global Recession this morning, this article jumped out at me and said, “pick me, pick me!” And so I did… It’s about what’s going on with goods for sale… and it can be found here: https://www.zerohedge.com/news/2019-02-03/retail-apocalypse-isnt-over-its-actually-just-getting-started

Or, here’s your snippet: “Last year’s holiday sales season was one of the strongest in years. But unfortunately for America’s struggling retailers, many missed out on the sales bonanza as Amazon and other e-commerce platforms accrued nearly all of the sales growth while foot traffic at US malls was stagnant. Already, Kohl’s and Macy’s have helped crush the narrative of the strong consumer by slashing their earnings guidance, something that doesn’t bode well for Q4 GDP, thanks to what we warned would be an unsustainable inventory build up that has inflated growth numbers in recent quarters.

The retail space has already seen the first headline-grabbing retail bankruptcy of the year (see: Gymboree). And as Bloomberg warned in a story published this week, even after high-profile bankruptcies including Sears and Toys R’ Us, the “retail apocalypse” is far from over.

Though the Fed has capitulated to the whims of the market, retailers still make up about one-fifth of the universe of distresses borrowers. And on Friday, the head of the biggest mall owner in the US warned that more bankruptcies are coming this year. Economists are increasingly worried about a recession this year or next.

Simon Property Group CEO David Simon told investors on Friday during a conference call that there are chains that his company is “nervous” about. Anybody who has traveled to a US mall recently may have noticed this change: Where once there were shoppers, now they halls look disconcertingly empty.”

Chuck Again…  And I was saying the other day, that we still haven’t seen Retail Sales for December… Is it something that the powers that be don’t want us to see? 

Currencies today 2/7/19 American Style: A$.7101, kiwi .6752, C$ .7546, euro 1.1332, sterling 1.2905, Swiss $1.0023, European Style: rand 13.6190, krone 8.5862, SEK 9.2555, forint 281.81, zloty 3.7947, koruna 22.7705, RUB 65.70, yen 109.85, sing 1.3572, HKD 7.8455, INR 71.38, China 6.7431, peso 19.17, BRL 3.6843, Dollar Index 96.61, Oil $53.65, 10-year 2.67%, Silver $15.73, Platinum $805.34, Palladium $1,380.01, and Gold… $1,306.81

That’s it for today… And this week… I can’t begin to tell you how glad I am that today is Tub Thumpin’ Thursday!  I’m so tired… I feel like Big Lee Smith used to look like when he came out of the bullpen! HA!  I see a light at the end of the tunnel of our construction project… finally!  In 1989, my house was built in 3 months!  I’m just saying…  The coffee is brewing, and I can smell the coffee (I’m just saying! HA!)  Cat Stevens takes us to the finish line today with his song: Morning Has Broken…   I guess a good morning song, eh?    I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow… And continue to Be Good To Yourself!

Chuck Butler

 

 

February 6, 2019 

* Dollar buying continues 

* Time to buy a car?

Good day… And a Wonderful Wednesday to you!  An awful night for yours truly last night, so this is going to be short-n-sweet this morning, so I can attempt to get some sleep!  The President finally got to have his State of the Union Address last night, and he called for the two parties to work together for the country…  I thought to myself, yeah, that’s not going to happen… We’re in for gridlock and finger pointing, folks… Might as well get used to it… The Grassroots greet me this morning with their song: Let’s Live For Today…   A good idea, for today is promised, tomorrow is not… 

So, traders didn’t get what they were expecting from last night’s SOTU Address. We talked yesterday about how traders were expecting the President to announce a new Trade Agreement with China, and all they got was more talk about what the President wants to see in the Agreement.  But the dollar buying traders were doing in anticipation of the announcement that never came, didn’t stop… Yes, that’s right… Strange as it might seem, Traders kept buying dollars… 

The euro slipped back below 1.14, the Aussie dollar (A$) finally saw some selling on the news from the other day, and the price of Oil slipped by $2 in the past 24 hours… Only Gold was able to eke out a $2.90 gain on the day, but unfortunately, Gold has given it back in the early trading today… 

This dollar buying in spite of a report yesterday that showed more weakness in the economy. The ISM nonmanufacturing (Service sector) Index fell by 2 points in the past month.  You know… one doesn’t have to look to strenuously or long in time to find articles that are about how the economy is weakening with each passing day. Yesterday, it was in the WSJ, of all places!, that I found this little diddy: “ Car dealers are beginning 2019 with a heavier inventory of unsold vehicles on their lots, a situation that some analysts say will put pressure on them to cut factory output as U.S. auto sales are expected to cool this year.

There were 3.95 million vehicles on dealership lots at the end of January, a 4% increase from December and up nearly 3% from the prior-year January, according to data released Monday by WardsAuto.”

I would have to think that having all the supply would bring down prices on cars… But as my history with buying cars tells me… That never happens! You wait, and when you think the buyer has the conn, you’re shown that the dealer always has the conn… I’m just saying… 

… There was a discussion on Twitter yesterday, where someone highlighted a reported by the Fed Reserve that their economists believe that the economy would be better off at this point, IF they had implemented negative deposit rates, instead of Quantitative Easing…

I agree with one responder that said, “sure since negative rates have worked so well in Japan and Europe, why not spread the misery?” I laughed out loud! That guy sure sounds like me, I said, for I would probably said it laced with curse words on the Butler Patio! Negative Rates! What a crock! And that was the Fed’s own PHD economists with that statement…  Either QE or negative rates were not the way to move the economy from where we were in 2009 to today!  I shake my head in disgust at this thought of negative rates… And think…  Why come out with that now? Oh… I think I get it… They’re just greasing the tracks for what’s coming folks… Mark my words… 

Well, I promised at the top that this would short-n-sweet, so here we go on our way to the Big Finish… 

To Recap…  The dollar buying didn’t stop when traders didn’t get what they were looking for in the SOTU Address. The euro has fallen below 1.15, the A$ selling is playing catch up, and the price of Oil slipped $2. Only Gold was able to eke out a gain VS the dollar yesterday, and in the early morning trading today Gold has given back that gain. Chuck is sick, so the letter is short-n-sweet today… Think of it as a gift of time…  

For What It’s Worth…  Well, to make your time here with the Pfennig even shorter this morning, I don’t have a web site for you to visit… Instead the FWIW piece is from the GATA folks, and you have to be on their list to receive it, but I will post it in its entirety… It’s about a Congressman grilling the CFTC about Silver manipulation…  So, here you go… 

“Congressman Demands CFTC Explain Its Failure to Find Silver Market Manipulation Where Justice Department Did

WASHINGTON — A member of the U.S. House Financial Services Committee today pressed the Commodities Futures Trading Commission on its conspicuous failure to uncover the very silver market manipulation now being prosecuted by the U.S. Department of Justice.

In a probing letter dated today to CFTC Chairman J. Christopher Giancarlo, Rep. Alex X. Mooney, R-West Virginia, writes:
“The U.S. Justice Department obtained a guilty plea from a former commodities trader for JPMorganChase & Co. to charges of manipulating the gold and silver markets between 2009 and 2015, and its investigation into the actions of related parties is ongoing.

The period at issue substantially overlaps the time during which your commission was investigating complaints of manipulation of the silver market — 2008 to 2013. However, in 2013 the commission announced that it had closed its investigation without finding any wrongdoing.

“Why did the commission fail to find the wrongdoing the Justice Department has confirmed and continues to investigate? Also, will the commission now be re-opening its investigation into silver market manipulation and opening an investigation into gold market manipulation? If not, why not?”

Meanwhile, Rep. Mooney asks about the CFTC’s recent refusal to answer questions posed by a non-profit watchdog group called the Gold Anti-Trust Action Committee (GATA) that investigates government interventions in gold and silver markets:

Rep. Mooney’s letter seeks answers from the CFTC about its apparent reporting discrepancies, the unusual correlation between the Chinese yuan and the gold price, and whether the CFTC believes it has jurisdiction over gold market trading by the U.S. government or foreign governments.
“Congressman Mooney understands that a lack of transparency in the gold and silver markets not only undermines confidence, but also enables governments and powerful financial interests to manipulate currencies and asset prices to Americans’ great detriment,” said Jp Cortez, policy director for the Sound Money Defense League.

“Gold and silver are true money, and the CFTC has a responsibility to expose and punish those who seek to secretly manipulate its value.”

Chuck Again… These are the questions I kept asking former CFTC commissioner Bart Chilton, when he said that the CFTC couldn’t find any evidence of price manipulation… Yeah, right… And my first wife was a young Elizabeth Taylor, yeah, that’s the ticket! 

Currencies today 2/6/19 American Style: A$.7131, kiwi .6850, C$ .7575, euro 1.1385, sterling 1.2950, Swiss $1.0008, European Style: rand 13.4790, krone 8.5177, SEK 9.1562,  forint 279.82, zloty 3.7705, koruna 22.6381, RUB 65.54, yen 109.75, sing 1.3543, HKD 7.8460, INR 71.55, China 6.7431, peso 19.12, BRL 3.6688, Dollar Index 96.22, Oil $53.22, 10-year 2.69%, Silver $15.73, Platinum $816.42, Palladium $1,368.17, and Gold $1,312.15

That’s it for today… A mixed bag-o-results last night for my teams, as my Missouri Tigers lost their basketball game, but our Blues came on late to win… The Blues in recent games have shown some life for the first time this season… Could they be putting together a run?   What the hell is  Virginia thinking? I’m shaking my head in amazement that the fabric of this country is being thrown out with the bathwater… I’m just saying…  The Eagles take us to the finish line today with their song: On The Border. I hope you have a Wonderful Wednesday, and Be Good To Yourself!

Chuck Butler

 

February 5, 2019

* Currency rally falls flat, and dollar gets bought

* Largest Pension Fund loses boatloads of money… 

Good Day… And a Tom Terrific Tuesday to you! The day after the Super Bowl had people walking around like zombies, after staying up to watch that boring exhibition of pro football, that would have been much better represented had the Chiefs played the Saints! Even the half-time show was boring! (sorry Maroon 5 fans, it was boring!) Can you believe the singer wearing a fur coat is being blasted on social media for wearing a fur coat? I just don’t get where we as a country have gone down this rabbit hole of PC… I’m just saying… The great Otis Redding greets me this morning with his song: I’ve Been Loving You… Live from the Whiskey-a-G0-GO…

Well, the currencies tried to get back on the rally tracks on our Marvelous Monday, but just couldn’t get both feet o the train. And the problem I told you about in Australia is getting a lot of air play, but the Aussie dollar (A$) seems to shrug off this mess…  On top of all that… Remember me chastising the Reserve Bank of Australia (RBA) many times in the past couple of years for not hiking rates to put the kyboshes on the housing bubble there? Well, the housing bubble has found the pin in the room, and is being drawn to it…. Better watch out… If the bubble makes contact with the pin, I doubt the A$ will be able to shrug that event off… I’m just saying… 

The price of Oil couldn’t hold the $55 handle yesterday,  but it rebounded overnight to bring it back to the $55 handle… and Gold never recovered the early morning loss , of over $5,  to close down on the day. You know… My mind keeps flipping back to what I just talked about regarding the Aussie Housing Bubble… Why don’t Central Bankers read the Pfennig, and learn their mistakes before they become major financial blunders? I don’t make things up folks… Sure sometimes I project a conspiracy theory, but not about things like Housing Bubbles, and Central Banks that begin their rate hike cycle late in the expansionary cycle…

My good friend, the Retirementor, Dennis Miller, of: www.milleronthemoney.com asked me last week if I was up for an interview for his newsletter… After I finished, I had to say that I was not normally a gloom and doom guy… The problem with what I do, is that I tend to sound like a doom and gloom guy… Well, if Central Bankers weren’t  all dolts (Save for Elvira Nabuillina) I wouldn’t have to sound so gloom and doom! I could be spreading the word that Sunshine, Lollipops, and rainbows and the everything is what I feel when I write my letter…

OK… So, yesterday I was a little hard on the Beaver, (the BLS), but they deserved it, and that’s another thing that just gets my goat… Economic reports that you can’t trust… So, in my opinion, there ‘s not enough of the “business”  ( Eddie Haskel style) that can be given to the BLS… 

President Trump will finally give his State of the Union Address tonight, and from what I can see this morning, traders are thinking that this is going to be good for the dollar, visa-vi a new trade agreement with China will be announced during the address…  Now, someone in the White House had to “leak that info” other wise, who would think that this is going to happen tonight, when all reports are that the trade negotiations are not going well! 

I don’t know if pulling a rabbit (a new trade agreement with China) out of one’s hat at this point is going to save the economy, as it has slid too far down the slippery slope at this point. This morning, I was all prepared to talk about how the bond guys are on board with this sinking economy  as the yield on the 10-year Treasury had slipped yesterday to 2.69%, but that all changed in the overnight markets as the 10-year was sold off and the yield rose back to 2.73% this morning… 

I still believe that the bond guys are thinking like me with regards to the economy, but, the price action of the past 24 hours would tell me that they aren’t 100% on board with me…  There’s always a chance that there are actions that could be taken to save the economy from slip, sliding away, but those chances are slim… And as I like to say, “And Slim left town”… 

Longtime reader, Mickey, sent me a note yesterday, and basically said that if I had problems with the components of the Dollar Index, why didn’t I build a different Dollar Index with currencies that I felt were more representative of dollar moves?    WOW! That took me back to my days at my old place of business, when Frank Trotter and I would brain storm this exact same idea of a “new and improved Dollar Index”…  I can tell you that it’s not as easy as one would think it is…  And now that I’m retired… 

Well, I’ll let someone with time, energy, and a Bloomberg figure that one out! Until then, I’ll continue to say that with the euro having the largest weighting in the Dollar Index component, I’ll simply check on the euro to see how the dollar is faring…  And this morning the euro has slipped in value, so the dollar is stronger this morning. 

Japanese yen was trading with a 110 handle when I first turned on the computer this morning…  It was just a couple of weeks ago that traders were buying up yen by the truckload, and now, apparently, they are selling yen by that same truckload!  I cautioned you when the yen was being bought that it was NOT a safe haven, in my opinion… 

In the Eurozone, there were a few data prints this morning, with the spotlight on the Markit PMI, and Retail Sales, both of which printed stronger than expected, and VS the previous print. That should have been enough to push the euro higher this morning, but that hasn’t happened. It’s as if traders don’t believe the data outcomes…  Now, I have to ask this because Its clearly front and center on my mind…  They don’t trust Eurozone data prints, but they do trust U.S. data prints?  Really?  What on earth have these guys been smoking?  Well, as I’ve always said… It is what it is…  Let’s move along… 

As I told you yesterday, we will begin to see the delayed data prints from when the Gov’t was shut down last month. And yesterday we saw Nov. Factory Order, which were negative -.6%…  Weaker than expected for sure! Today, we’ll se current data from the Markit people on the services sector here in the U.S….  And the ISM nonmanufacturing (services) index will also print… One would think that… aw, never mind, nobody cares about when they print, Chuck! move along… 

To Recap…  The dollar staged a comeback once again yesterday, after the currencies attempted to rally, the word from a dinner meeting between the President and Fed Chairman, was that that Fed will remain autonomous , and that got the dollar bugs all excited once again.  In addition, the President will give his State of the Union Address tonight, and traders are thinking that he’ll have a rabbit to pull out of his hat by announcing a new trade deal with China…  I guess we’ll have to wait-n-see… 

For What It’s Worth…  I saw this mentioned on Twitter last night and knew right away that I had to look into it further… The largest Pension took an $136 Million hit… and it can be found here: https://www.zerohedge.com/news/2019-02-01/no-need-be-pessimistic-worlds-biggest-pension-fund-suffers-record-collapse-q4

Or, here’s your snippet: “The world’s largest pension fund – in the world’s most demographically-challenged nation – suffered a stunning record loss in the last quarter as its Abe-supporting domestic-stock-buying-spree crushed Japan’s Government Pension Investment Fund (GPIF).

Bloomberg reports that GPIF lost 9.1 percent, or ¥14.8 trillion ($136 billion), in the three months ended Dec. 31, it said in Tokyo on Friday. The decline in value and the rate of loss were the steepest based on comparable data back to April 2008. Domestic stocks were the fund’s worst performing investment, followed by foreign equities. Assets fell to 150.7 trillion yen at the end of December from a record ¥165.6 trillion in September.

While global central-bank-liquidity driven gains in global stocks helped the GPIF generate returns for the previous two fiscal years, December’s global rout underscored the risks facing the fund since it revamped strategy in 2014 to accumulate stocks and pare domestic bonds – something they vehemently deny is anything but prudent independent risk-managed behavior.

Bloomberg notes that the GPIF may have little choice but to invest in equities as fixed-income yields, especially those of Japanese government debt, are too low, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo.

“It makes sense for the GPIF to hold some risk assets in this environment because yields are low globally and bond investments don’t give good returns,” Fujiwara said. “Yet from a pensioner’s point of view, it takes too much risk on its investments.”

Chuck Again…  I can see it now… Pm Abe and Bank of Japan President, Kuroda pushing their nation’s “independent” pension fund administrators to keep buying the dip in domestic stocks…or else. 

Currencies today 2/5/19 American Style: A$.7245, kiwi .6892, C$ .7685, euro 1.1418, sterling 1.3011, Swiss $1.0011, European Style: rand 13.3838, krone 8.4668, SEK 9.1157, forint 278.04, zloty 3.7547, koruna 22.4928, RUB 65.56, yen 109.95, sing 1.3526, HKD 7.8445, INR 71.54, China 6.7431, peso 19.05, BRL 3.6637, Dollar Index 95.93, Oil $55.15, 10-year 2.73%, Silver $15.87, Platinum $821.57, Palladium $1,367.20, and Gold… $1,313.65

That’s it for today…  A much better night of sleep for yours truly last night…  I’ve been feeling very tired all the time lately, I believe it’s from an accumulation effect of the chemo I take every day…   I don’t like taking naps during a warm sunny days…  And when Spring Training games come there won’t be any daytime naps then!  We’re beginning to pack up stuff that we will be moving upstairs this coming week…  Good thing there’s an elevator! HA!  The sun is rising, which means it’s time to get this out the door…  My good friend, Rick, will be happy with this song… Modern English takes us to the finish line today with their song: I Melt With You… Now, got out and make this a Tom Terrific Tuesday, and Be Good To Yourself!

Chuck Butler

 

 

February 4, 2019

* BLS says 304,000 jobs created in Jan. Chuck says hogwash!

* Eurozone PPI weakens… What will the ECB do? 

 

Good Day… And a Marvelous Monday to you! The rain finally gave way to sunshine yesterday, and it brought everyone outside to bask in the warm sun. I watched the 1st half of last night’s Super Bowl at a friend’s condo upstairs, but then came back to my place to watch what I could before sleep entered into the equation. So, congratulations to the cheaters, I mean the Patriots who won their 6th Super Bowl. We’ve begun February, so welcome to February, the month that pitchers and catchers report, and I’ll be visited by my Spring Training Buddies to start the Spring Training games at the end of this month. That means I’ll be on vacation the last week of February… I know, I know, it used to always be around the 3rd week of March, but this is when it all works out and so I’ll be absent that week. The Beatles greet me this morning with their song: Michelle… My bell, those are words that go together well, my Michelle…

Well, the currency rally that was going on late last week, got stopped at the gate by a false Employment Report by the BLS… They claim that 304,000 jobs were added in January… However the Unemployment Rate rose to 4.00% from 3.86% the previous month. And despite 800,000 furloughed Gov’t employees that were without jobs in January… When things like this happen, I refer to John Williams, of Shadow Stats (www.shadowstats.com) And he explains things for us…

“Unaffected by the government shutdown, despite 800,000 workers furloughed or forced to work without timely pay, January Payrolls gained a headline 304,000 jobs. Yet, that was in the context of the initial 312,000 December jobs gain revising lower by 90,000, to 222,000.”

The Burning Platform (www.theburningplatform.com) had this to say, which I agree with wholeheartedly…. “There Are Lies, Damned Lies, Statistics and The Employment Report”

Oh, woe is me… the problem with all this is not so much that fact that the BLS lied to us, but that the markets bought the numbers and swallowed them hook, line and sinker! Shouldn’t someone with an ounce of brains say, What a minute here, these numbers don’t seem kosher? But nooooooo! They decided that they would buy what the BLS was selling them. Don’t worry they’ll figure out later that is was snake oil…

The Dollar Index, which I’ve explained through the years is not the  best example of how to value the dollar, because it is so heavily weighted with euros, has bounced around a bit lately, and is stronger this morning at 95.70, reflecting the weakness of the euro after Friday’s walk down “cheaters’ lane”…  

To Illustrate what I’m talking about, the Petrol Currencies, which aren’t a part of the components that make up the Dollar Index, are all on the rally tracks with the price of Oil above the $55 handle. The Russian ruble, Brazilian real, Canadian loonie, and Norwegian krone are all looking perky this morning… 

Gold however, is getting sold in the early morning trading, and is down $7.50, after losing $3.60 on Friday. That’s $11 in the past two days, after Gold had been on a good run to the upside… I would say that this is normal given the quickness with which Gold moved upward. But then NOTHING is normal about the price action in Gold these days…  And haven’t been since the fellow at the price manipulation controls woke up from his nap on September 8, 2011…  Because all’s fair in love and war, and price manipulation… I would have to say for those that don’t believe in that stuff that it was about the time the dollar was strongly entrenched in its current strong dollar trend, that began when the hidden debts of the Club Med countries were discovered. 

Normally I would say that this pull-back in the price of Gold would be an opportunity to buy at a cheaper level than last week… And I still want to say that, but who knows what the price manipulators are going to do next? 

Have you been keeping up with the news from a financial system review that’s been going on in Australia?  Well, it came to a head with a final report last week, with 76 regulation problems… But with no suggestion to beak up the powerful Aussie banks… This news brought some selling pressure to the Aussie dollar (A$)…  This is important stuff so I have highlighted an article on it in the FWIW section today… 

Earlier this morning, the Eurozone printed their latest PPI (wholesale inflation) and on a year on year basis it has slipped to 3.0% from 4.0% last January…  This is not good for consumer inflation that the European Central Bank (ECB) has held out to be the carrot on the string. The ECB wants inflation above 2% before they’ll move their deposit rates out of negative territory.  And this print explains the slippage in the euro from Friday… 

It appears that this week will be the week that the Gov’t uses to print all the delayed economic reports of the past month… For instance, today, we’ll finally see the Nov. Factory Orders… Seems like it’s really not useful at this point doesn’t it?  But it will print anyway, and when it does, I expect it to be negative. 

We’ve still never seen Retail Sales for December…  I wonder if there’s a problem with the data, in that, it stinks, and the Gov’t doesn’t want the public to know? I wouldn’t put it past the bean counters at the BLS and other Gov’t agencies that report on economic data.  You would think that the Gov’t would have had enough time to massage the data or just let it print, as the difference between humor and tragedy is time… 

To Recap…  the currency rally of last week came to an abrupt halt for most of the currencies on Friday, when the BLS printed what I consider to be a farce of a jobs report saying that 304,000 jobs were created in January. Recall that they said 312,000 were created in December, but quietly, under the cloak of darkness, they BLS “revised” December’s number by 88,000 jobs to the downside!  There are problems in Australia with their banks, and the way they do business, and that’s weighing on the A$, while the price of Oil ratchets higher and the Petrol Currencies get bought. 

For What It’s Worth… I gave you a teaser earlier in the letter…  And now here it is… An article about the Financial system review in Australia… And you can find it here: https://www.reuters.com/article/us-australia-banks-inquiry/australia-vows-to-clean-up-financial-sector-after-landmark-misconduct-inquiry-idUSKCN1PT099

Or, here’s your snippet: “A special government-appointed inquiry excoriated Australia’s financial sector for misconduct on Monday, referring two dozen cases to regulators for possible legal action but leaving the structure of the country’s powerful banks in place. 

Regulators will be subjected to a new oversight body and the financial industry’s pay will be overhauled to remove conflicts of interest, according to the recommendations of the so-called Royal Commission. But the recommendations stopped short of measures that would threaten the A$400 billion ($289 billion) industry’s dominant position.

The recommendations come after the public inquiry heard 11 months of shocking revelations of the financial industry’s wrongdoing, including that fees were charged to the accounts of dead people and that cash bribes were paid over the counter to win mortgage business, wiping A$60 billion from the country’s top finance stocks.

The conservative government, which was initially opposed to the setting up of the inquiry, promised it would act on all the 76 recommendations. ”

Chuck Again… When I read the part of charging fees to dead people, I thought of all the shenanigans that Wells Fargo has been involved with these past couple of years… They didn’t cause the dollar to get sold…. I’m just saying… 

Currencies today 2/4/19: American Style: A$.7226, kiwi .6890, C$ .7660, euro 1.1430, sterling 1.3055, Swiss $1.0026, European Style: rand 13.3750, krone 8.4622, SEK 9.0694, forint 277.39, zloty 3.7405, koruna 22.4705, RUB 65.44, yen 109.88, sing 1.3526, HKD 7.8465, INR 71.74, China 6.7432, peso 19.15, BRL 3.6575, Dollar Index 95.70, Oil $55.33, 10-year 2.69%, Silver $15.74, Platinum $818.88, Palladium $1,348.73, and Gold… $1,310.63

That’s it for today…  I kept wondering when my daily dose of chemo was going to catch up with me, and I wonder no more, as it hit me at 1 o’clock in the morning last night… UGH!  That was a nice run I had…  Oh well, it is what it is… I can’t complain, for it’s kept me alive!  so… pitchers and catchers report to spring training in about 20 days… I’m ready for some baseball!  I received a video of my darling granddaughter, Delaney Grace, singing the National Anthem. She had sent it to Roger Dean Stadium as an audition tape to sing at a Spring Training Game…  I was so happy to hear her hit every note and belt it out! Fingers crossed now…   Aerosmith takes us to the finish line today with their song : Dream On…   I hope you have a Marvelous Monday, and remember to Be Good To Yourself! 

Chuck Butler

 

 

January 31, 2019

* Currencies rally along with Gold & Silver!

* Chuck does lots of explainin’! 

Good Day… And a Tub Thumpin’ Thursday to you! Once again, in my new found better health, I’ll be doing some Tub Thumpin’ myself this afternoon… I hope you can too! We had a nice dinner, out, with our friends from down here last night… A grand time was had by all! I got home in time to watch my Mizzou Tigers on TV, lose yet another basketball game… Oh well, that’s my team, through thick and thin… And these past few years for basketball have been quite thin! Our Blues haven’t played since last weekend, and don’t play again until this coming weekend! Doucette greets me this morning playing his song: Mama Let Him Play…

Well, the Fed’s FOMC meeting yesterday came and went without a rate hike, and from what I heard from Fed Chairman, Jerome Powell, we might have to get used to these kinds of sans rate hikes meetings, and by 2020, he believes we’ll see a rate cut! Talk about tying the dollar to the railroad tracks… Ala Snidely Whiplash… And the beautiful Nell… And the currency traders saw the same thing I saw, and started selling dollars… for what good are they, if the Fed is going to stop hiking rates, and by next year, be cutting rates? Not very good, if you ask me!

The Fed Heads seem to be reading the Pfennig these days, for they are finally seeing the economy for what it is… But Powell wouldn’t go without mentioning that he still believes the economy is “somewhat strong”… Here’s a sample of what Jay had to say… “We are now facing a somewhat contradictory picture of generally strong U.S. macroeconomic performance alongside growing evidence of cross-currents. Common sense risk management suggests patiently waiting greater clarity.”

So, the currencies rallied and Gold added about $8 on the day… The euro is nearing 1.15 again, and the Aussie dollar (A$) soared above 72-cents on the day. Could this be the beginning of a long term run in the currencies VS the dollar? Well, if the next move by the Fed is a rate cut, then I would say chances are… cause I wear a silly grin, the moment you come into view… No wait! I apologize Johnny Mathis, but these chances are that the rate cut could very well spell out bad things ahead for the dollar…

If this plays out like I think, and so far, it’s been playing out just like I said it would, then we’ll see starts and stops in the currencies and metals, and eventually the dollar bugs will give up, and a full blow weak dollar trend could very well be the result… However, having said that, I must also admit that I’ve seen a couple of false dawns in the past, so I won’t exactly go out on a limb too far with this…

On a sidebar… late last week, LinkedIn sent out a 20 year work anniversary for me at EverBank… I thought I had changed my job on their site, but I guess I hadn’t put in an “end date”, for of course EverBank is no longer around, so it would be difficult for me to have celebrated 20 years there, and 2… I was shown the door 2 years ago! I’ve received quite a few congrats on your work anniversary notes, only to have to tell them the honest truth… Oh, and I’ve entered an “end date” now, so hopefully we don’t experience this next year with 21 year anniversary notices!

OK… Back to the markets… The Bond Boys think that there will be no more rate hikes, as the yield on the 10-year Treasury dropped to 2.66%… This has got to be helping mortgage rates drop, but at this point, the housing sector is circling the bowl once again… Will it get flushed down? Good Question, and one that I’m not ready to answer just yet… I’ll just say I’m warming up my singing voice!

I received a lot of notes in the Pfennig Replies box the past two days regarding my thought the other day that maybe, just maybe, cause you never know, the U.S.’s claim to have 8,100 tonnes of Gold, may be exaggerated… I had people telling me I was wrong, and that Ft Know held 100oz bars, of which you don’t see people walking around with those… Well, if I’m so wrong… Why won’t the “audit Ft. Know” go off smoothly? Why does it take months to get one’s safekept Gold back from the Fed, and when you do receive your Gold, the serial numbers on the bars don’t match those that were put into safekeeping all those years ago? I could sit here all day and come up with reasons why we need to audit Ft, Knox…

Remember Koos Jansen? I used to talk about him all the time, because he had his finger on the pulse of physical Gold in China… Well, I haven’t checked on Koos Jansen very often until this week, and wouldn’t you know it… www.bullionstar.com has an article printed by Koos, talking about the audits that have been performed at Ft Know… Let’s listen in…

“Among other problems, since inspections commenced at Fort Knox in 1974:
• Most physically verified and sealed vault compartments have been re-opened, for which the auditor can provide no valid explanation.
• Auditing personnel has proven to be utterly incompetent and did not follow the auditing policies and procedures.
• Repeatedly metal has been excluded from verifications.
• Many of the audit and assay documents have been destroyed.
• The US government goes to great lengths in withholding information and spreading false information.
In conclusion, the audits have been executed with an inadequate degree of integrity.

I don’t know about you, but I don’t get a warm and fuzzy when I read that! And therefore I’m still questioning whether or not the U.S. Gov’t has the physical Gold they say they do…

I also received a lot of email from readers that questioned idea that I put forth on the reason the Pacific Gas & Electric (PG&E) filed for bankruptcy, and therefore I need to explain… Yes, I knew that the PG&E had filed bankruptcy to protect them from all the lawsuits that will come their way as a result of the forest fires in California late last year.  The Point I was  trying to make is that they had $50 Billion in debt, that now under the Bankruptcy law, that they will now be excused from paying off…   I thought that this would hurt the economy of California, which is the in the top 5 of economies of the world! 

OK… too much explainin’ to do this morning Lucy! And no… You can’t go to the club! Waaaah….   Well… The U.S. Data Cupboard is still a big data vacuum , but with the Government employees going back to work this week, all those data prints that have been delayed will get printed… Tomorrow is supposed to be a Jobs Jamboree Friday… And yesterday, the ADP Employment Change report for January printed and was way down, from December, which was 263,000, and January was just 213,000…  

If the jobs numbers from January do get printed tomorrow, I would expect them to have fallen quite a bit from December’s blowout month of 312,000, which of course, included tons of temporary jobs for the Christmas season…  I’m thinking somewhere around 175,000… And the spin doctors will be out in force, talking about the bad weather keeping the number much lower…  

To Recap…  Well, the Fed’s FOMC meeting ended  with no rate hike and with a short speech by Fed Chairman Jerome Powell. And it was this short speech that got the dollar tied to the railroad tracks, ala Snidely Whiplash, while the currencies and metals ran over it…  Powell was talking about how the rate hikes might be on pause for a while and that he see the first rate cut in 2020… That’s right… it’s bang on what I’ve been talking about for some time, although, I said that by the end of 2018, the talk would be about reversing the rate hikes, so I was a month early… sue me! HAHAHAHAHAHA! 

For What It’s Worth… This is different today, in that it’s a video that I want you to watch, and not a website to visit to read an article… This video is from Mike Maloney, giving the reasons why we’re about to see QE4, and QE5… The only thing I would argue with him on, is the use of the term Quantitative Easing or QE… I was told a couple of years ago, that Congress told the Fed they didn’t care what they called it, but that they couldn’t use the term QE again…

And I might add, if the Fed has to resort to QE4 and QE5, out the window goes their remaining thread of credibility… For how does an economy that’s supposedly “strong and robust” go from that to needed money printing, bond buying, or demonetization of the debt? Again I hear Ross Perot in my head, saying… Do you hear that sucking sound? That’s the Fed’s credibility being sucked out the window of the Eccles Building!

Anyway… here’s the link where you can watch this presentation… please have your speakers on, and allot the time to view it… https://www.youtube.com/watch?v=U6fVLXALJPw

Chuck again… not that I went anywhere! But Mike Maloney is guy that people should listen to… He’s normally talking about Gold & Silver, so that’s why he tied this video to those assets…  But this talk of the economy needing more stimulus is old news on the Butler Patio… I’m just saying… 

Currencies today 1/31/19: American Style: A$.7275, kiwi .6912, C$ .7613, euro 1.1485, sterling 1.3138, Swiss $1.0072, European Style: rand 13.3005, krone 8.4092, SEK 9.0266, forint 275.12, zloty 3.7213, koruna 22.4242, RUB 65.86, yen 108.65, sing 1.3455, HKD 7.8466, INR 70.99, China 6.7138, peso 19.13, BRL 3.7108, Dollar Index 95.38, Oil $54.07, 10-year 2.66%, Silver $16.07, Platinum $820.56, Palladium $1,373.00, and Gold… $1,322.46

That’s it for today, and this week… The Artic Polar Vortex sure has a grip on the Midwest, where temps remain very low and dangerous, according the weather people…  In my old job, we had a foot bridge from the parking lot to the building, and it used to be so darn cold crossing that bridge this time of year… I can honestly say I don’t miss that one iota! It was another of those bad nights for my teams… I already talked about the Mizzou loss, but the St. Louis U. Billikens also lost last night. UGH!   So, this Sunday is the Super Bowl.. Who are you going to root for?  I despise both teams for different reasons, so I doubt I pay much attention to it at all… But I guess I despise the Patriots more than Rams…   I’ll watch it, for the commercials! HA!  Yes, that’s the ticket!  OK… Steely Dan takes us to the finish line today with the title song of my fave album from them… Aja…   A perfect morning song I must add…..  With that taken care of, it’s time to tell you that I hope you have a Tub Thumpin’ Thursday and Fantastico Friday tomorrow! And while having all that fun, please Be Good To Yourself! 

Chuck Butler