Chuck Butler’s A Pfennig For Your Thoughts

July 6, 2017

  • Dollar strength fades…
  • Factory Orders’ print is awful!
  • Fed Heads disagreeing?
  • Gold sees 2 days of gains!

Good day… And a Tub Thumpin’ Thursday to you! This week is so strange, as it feels like there were two Mondays! It’s an infusion Thursday for me, so I won’t be doing any Tub Thumpin’, so I leave it all up to you!  I feel like I repeat myself every other Thursday, so forgive me for that! The Moody Blues greet me this morning with their song: New Horizons, from one of my all-time fave albums: Seventh Sojourn..

The “dollar day” on Monday, that spilled into Tuesday, with thinned out volume, due to the U.S. Holiday, began to give back some ground it took in trading yesterday and overnight. The Dollar Index has dropped again, and looks like it will head south of 96 soon. The U.S. received some more very ugly economic data, and the Fed Heads can’t seem to agree on when to start their unwinding of the balance sheet.  Those two things look to be the culprits undermining the dollar’s strength today.

Gold has seen two consecutive days of $3 gains, which I’ll take given the shiny metal has not been able to find a bid in the past 10 days.  I read where UBS (Union Bank of Switzerland) wealth advisors are telling their clients to buy Gold around this area ($1,200) because they like the idea of the insurance that Gold provides an investment portfolio. Hey! I don’t make this stuff up folks.. Check out the article I saw here:

And the price of Oil saw some slippage yesterday, but then recovered some of the slippage when the supplies data showed that Oil & Gas supplies had fallen in the past week…  The U.S. Strategic Crude stockpiles have fallen to the lowest level in 12 years, and the White House has pledged to sell more…  So, the price of Oil has the old give and take going for it right now…  You see, the U.S. shale producers are doing their best to keep the supplies at high levels… So, you have high production, VS the selling of the supplies…  And the price of Oil appears stuck in the mud with that scenario going on.

That means the Petrol Currencies are also stuck in the mud…  UGH! But the Petrol Currencies that have other things going on to support their respective currency’s value, are doing just fine… That list is short, but includes the Canadian loonie, and Norwegian krone..

The euro, which saw the brunt of the dollar’s strength in a bad way, that is, has strapped on its boots and is picking itself off the floor. The Big Dog, euro, is sneaking up on the 1.14 level again this morning, and if we see more weak data from the U.S., which in my humble, country boy, opinion, is a given, then we’ll see more dollar selling..

Aussie and N. Zealand’s currencies have also picked up the pieces (great song by the Average White Band) and returned to the rally tracks this morning. But currencies like the Mexican peso, Indian rupee, Brazilian real and Russian ruble, can’t find their way to the rally tracks.  So, we have a mixed-bag-o-currencies today, but for the most part, the dollar is getting sold…

As I said above, a reason for the dollar weakness this morning is the news that came from the Fed’s FOMC Meeting Minutes where it was revealed that the Fed Heads are deeply divided in when to start their unwinding of the balance sheet. The Fed has said that it wants to begin the balance sheet plan this year. The minutes of the June meeting said several officials wanted to start “within a couple of months,” while others favored waiting, suggesting that officials are debating whether to begin in September or wait until December.

I’m not a fan of reducing the balance sheet right now, for when they reduce the balance sheet it will be like hiking rates, and we don’t need additional rate hikes at this time, when the economy is weakening like it is doing right now!

Last year, I explained to you, dear reader, how the Fed works, these days, with the decisions being ironed out before the meeting so that it appears that there is no dissension going on… Fed Chair, Yellen, Fed Vice Chair, Fischer, NY Fed President, Dudley, and Fed Gov. Brainard, form the nucleus of the decision makers… Once they agree, they then make certain the rest of the Fed voting governors are in line with the decision…

Knowing this scenario exists, I found it interesting that there was a a division of opinions on when the unwinding of the balance sheet would begin…  At the last meeting where the Fed hiked rates, there was one voting member that voted against the rate hike. Neil Kashkari, Fed Minneapolis President..  We need more Fed Governors like this guy, folks… One that would stand up to the “decision making nucleus” at the Fed…  It used to be Richard Fischer of the Dallas Fed, but he retired from the Fed a few years ago… Then it appeared that Fed member, Rosengren, was going to be the flag bearer for questioning the “decision making nucleus”, but that didn’t last long either…

OK, I didn’t mean for this to become just a letter about the goings on at the Fed! Besides if I talk about the Fed too much I begin to break out in a rash! HA! So, let’s switch over to the other reason for the dollar weakness this morning, which would be the awful print of Factory Orders for May.

Yesterday, The U.S. Data Cupboard had the May Factory Orders print for us yesterday, and like I said it would print, the print showed a decline of -0.8%, and April’s negative print was revised downward from -0.2% to -0.3%… I also saw a report that showed Consumer spending on long-lasting durable goods dropped at a 1.6% annual pace in the first quarter, the weakest showing since the second quarter of 2011.

Today’s Data Cupboard has the Trade Deficit for May, which will be around $46 Billion, The ADP Employment Report, which is supposed to be the appetizer for tomorrow’s Jobs Jamboree, but never really turns out like that, because of the games that the BLS plays with the Jobs numbers. And of course as on every Tub Thumpin’ Thursday, we see the Weekly Initial Claims data…

I don’t see the dollar getting love from any of this data today, so the currencies should be able to add to their gains from yesterday and overnight. Tomorrow is the Jobs jamboree, and longtime readers know that I just don’t care about the BLS Jobs report any longer, because of the hedonic adjustments, and the way the markets take the report, hook, line and sinker, and then when the revisions are made later down the line, no adjustment is made…  So, I don’t care any longer, but the markets do, so I have to report on it, and right now the so-called experts are calling for job creation of 177,000 for June…  No great shakes, no reason to believe that wage inflation is going anywhere either!

Well, have you noticed the rise in the yield on the 10-year Treasury bond in recent days? I highlighted it last week, pointing out that the yield has risen by 22 Basis Points…  Well, the worst of the move higher in yield seems have been put behind us… This bond selloff seems to be overdone in my opinion… Now, I’m not saying that yields should drop to the 2.15% area again right away, but bond yields shouldn’t be rising this quickly either! Things in the U.S. are not moving in the right direction, and that’s always the things that moves bond yields lower… Remember, yield and price on bonds move opposite of each other… So, when the yield goes down, the bond price goes up, thus signaling a bond rally…

To recap…  The dollar days on Monday and Tuesday have come to an end, and the currencies, for the most part, are gaining back some lost ground. The Big Dog euro, is sneaking up on the 1.14 level once again. The price of Oil saw some slippage, but gained some of the slippage back, when it was revealed that U.S. Supplies of Oil & Gas have dropped to 2011 levels. Gold was allowed to gain $3 again yesterday, thus marking two consecutive days of $3 gains. Chuck points out that UBS wealth advisors are recommending to their clients to buy Gold for insurance…

For What It’s Worth… Well, thanks to Ed Steer, and his letter because that’s where I found this… And since I’ve made such a big thing out of the “Consumer having tapped out” this article on Zero Hedge makes a lot of sense to print…  You can find it all here:

Or, here’s your snippet: ”

First it was auto the auto parts suppliers getting hammered after O’Reilly Auto announced unexpectedly poor results (duly blamed on “mild weather” and weaker than expected Hispanic spending) and tumbling the most in 5 years, and then it was the retail REITs turn, after channel checks at Prodco Retail Traffic Analytics revealed that the US consumer continued to hibernate into the July 4th weekend with North American store traffic 8.1% lower in the week leading up to the July 4 holiday weekend, a steeper drop than the year-to-date trend of down “only” 6.6%. In the week ending July 1, with footfall at luxury retailers down 9.7%, and 8.3% weaker at apparel stores, Bloomberg reported.

The justifications for the abysmal results were legion: retail Q2 sales results may be impaired by weak traffic, as consumers still prefer digital, and they swap shopping for travel, dining out, or outdoor recreation. Shopping less in-store continues to hurt retailers’ ability to prompt unplanned purchases.

The companies impacted the most included retailers such as Abercrombie & Fitch, Macy’s, J.C. Penney, Tailored Brands and Nordstrom reported declines in traffic and same-store sales. And since they’re among the tenants of REITs Kimco and General Growth, the the S&P 1500 retail REITs index fell as much as 2.8%, the most intraday in two months, with all 24 members declining.
Based on the above, it appears that 2Q retail sales will once again be hurt by overall weak spending even as Amazon continues to wreak havoc among the traditional retail sector.
Abercrombie & Fitch, Macy’s, J.C. Penney, Tailored Brands and Nordstrom all reported declines in traffic and same-store sales.

And while many would be first to blame the (near) monopolistic dominance of Amazon in the online retail space, reading between the lines confirms that U.S. households are aggressively shrinking their overall spending basket, as store checks by Retail Metrics throughout the month found continued soft traffic, although the May retail deterioration appears to have stabilized at a low level. This, despite elevated promotional levels at both specialty apparel retailers, and department stores.”

Chuck again… I was having a discussion with a couple of ladies the other day, and they insisted that it’s all Amazon’s fault for the all the retails store closings, and I attempted to correct them and say that some of it’s Amazon, but the real culprit is a U.S. Consumer that has tapped out..  They wouldn’t listen to me though… UGH!

Currencies today 7/6/17… American Style: A$ .7596, kiwi .7268, C$ .7733, euro 1.1381, sterling 1.2950, Swiss $.9651, … European Style: rand 13.4732, krone 8.3719, SEK 8.4624, HUF 272.15, zloty 3.7369, koruna 22.9845, RUB 59.81, yen 113.34, sing 1.3833, HKD 7.8104, INR 64.81, China 6.7991, peso 18.33, BRL 3.3003, Dollar Index 96.09, Oil $45.88, 10-year 2.37%, Silver $15.97, Platinum $905.91, Palladium $843.97, and Gold… $1,223.00

That’s it for today..  I saw the sleep doc yesterday, and he showed me the difference in my sleep from before the CPAP to now about 6 weeks after the CPAP, and I was amazed at the change! WOW I told him even though I’m back on my chemo treatments, I don’t feel the need to take an afternoon nap any longer! Off to the infusion center now, I have to go quickly… YIKES I forgot the time!  The great Johnny Rivers takes us to the finish line today with his song: Summer Rain…  And with that, I hope you have a Tub Thumpin’ Thursday and Be Good To Yourself!


Chuck Butler


Starting Over…

Chuck Butler’s A Pfennig For Your Thoughts

July 5, 2017

  • Dollar crushes everything on Monday!
  • N. Korea fires a successful ICBM!
  • Russia & China get real friendly…
  • It’s a Jobs Jamboree week!

Good day… And a Wonderful Wednesday to you! As Gomer Pyle used to say… Surprise, Surprise, Surprise! I know I said I wouldn’t be writing today, but… A change in plans, and here I am at my writing desk this morning! Boy, I’ve received a lot of unsubscribe emails in the past week, since I returned to the email version… I wonder what I did or said that has caused that? Oh well, I can only do what I can do… As Popeye said, “I am what I am, and that’s all that I am!” The Buckinghams greet me this morning with their song: Don’t You Care…

Well, the dollar day on Monday really took some mighty swings at the currencies and metals… But then I told you that we would probably see that happen, given that the ISM (manufacturing Index) was going to show a rise in the index number that would further fuel the dollar’s gains on the day…  But that could all begin get to reversed today, as we have another round of negative economic data scheduled for the U.S. today. And, the Fed’s FOMC Meeting Minutes print this afternoon…  More on that in the Data Cupboard roundup later..

The BIG News yesterday was that N. Korea has successfully fired off an intercontinental ballistic missile (ICBM), which means that they could reach the U.S…. The U.N. has banned these types of missile tests, but apparently N. Korea doesn’t think that applies to them. Now the question is: How will the U.S. react to this news?

My initial reaction to hearing that news, was “I bet Gold has finally turned the corner and begun to head higher”…  But I was wrong… (mark that down!)  Gold only gained $3.50 yesterday, and that’s only because “da boyz” as Ed Steer calls the short Gold paper traders, were on holiday…

In fact, Ed Steer ( had this to say about Gold trading… “There should be no doubt in anyone’s mind that a major bottom is being placed in gold and silver right now — and that’s especially true in silver. It’s still not known whether we’ve seen the last of the engineered price declines in these two precious metals, but if there is any room left to the downside, it would certainly be in gold.

With the bottom in, or mostly in, our eyes should now be focused on what happens during the inevitable rally that will follow. As Ted (Butler) said, how high we go.” – Ed Steer

Alrighty then… Well, like I said above, the currencies have lost that loving feeling that they had last week, and now have to generate the interest in them again. As I’ve said a couple of times now in the past couple of weeks…  We can expect to see days like we did on Monday as we go along, no currency trend is a ONE-WAY Street… And that’s an important thing to remember, as we go along.  So, let’s say you see a currency and want to buy it to further diversify your investment portfolio, but it’s going higher nearly every day, and you don’t want to buy into strength, (smart!) all you have to do is wait for a “dollar day” and then buy into weakness (smart again!)

The other BIG News this weekend came from the Russia/ China summit… And longtime reader, Bob, sent me a link to an article about the Chinese / Russian summit that was held last weekend, and from that meeting, President Putin and President Xi signed a Treaty of Friendliness and Cooperation between the two countries which will see further and deeper integration of Russia and China’s work towards mutual global problem solving.

President Putin later spoke of his optimism for what the One Belt–One Road Chinese economic, commercial and infrastructure project can offer for both countries. And President Xi spoke of the strategic partnership between the two countries as an “historic choice” .

Folks… I really do believe that China and Russia are looking to form an alliance that will scare the bejeebers out of anyone looking to mess with either one of them… Do you hear that Congress? Recall, you just put into place additional sanctions on Russia…

Now, if these two would gang up on N. Korea and have them shutdown their missile program that would work for me!

Speaking of China… I received a note from friend Sean Hyman on the 4th of July, and since Sean is a technical / charts guru, I thought I had better open that right away! And in his note, was a link to an article that talked about China opening up its bond market… Here’s the gist of what it said… “Access to the market will be restricted to “qualified investors” including central banks and sovereign wealth funds, but also commercial banks, insurers, brokerage firms and investment funds, according to the PBOC.

China’s debt market is the third largest in the world, with a cumulative value of about $10 trillion according to Bloomberg news agency.
However, this booming market has been virtually out of reach for foreign investors, who currently hold only a small portion of the bonds issued in China — less than 1.5 percent according to Bloomberg estimates.

China has moved gradually toward opening its capital markets.
In 2014, a trading link between the Hong Kong and Shanghai stock exchanges was introduced, and another was started in December 2016 between Hong Kong and Shenzhen, China’s other exchange.
The links give foreigners some access to China-listed shares, while also allowing Chinese firms to buy Hong Kong-traded stocks.

The bond move is the latest in a series of liberalization pledges from China, which has regularly been hit by complaints from foreign companies and trading partners about access to its markets.”

So.. How about that? Another step for the Chinese to gain a wider distribution of their currency… Folks, I’ve been writing about China’s progress in opening up their markets, gaining a wider distribution for their currency, and their massive accumulation of Gold for a long time now… I do believe that they are getting closer and closer to a float for their currency, backed by some percentage of Gold, and then the push to end the reserve currency status for the dollar really begins…

I don’t think I’ll go into individual currency performances this morning, because I told you the dollar took some mighty swings on Monday, all the currencies are much lower than they were last week, and leave it at that, besides you can check the currencies, metals, commodities out in the currency roundup in about 5 minutes of reading time!

The U.S. Data Cupboard is stocked with data prints this Holiday shortened week…  And it all comes together on Friday, as we will see what the BLS has up their sleeve when the Jobs Jamboree takes place.. Right now, the forecasts are showing that the so-called experts are calling for an increase in jobs for May of 177,000…  In one of my recent articles for the Dow Theory Letters website, I highlighted the fact that if we took out the hedonic adjustment of the Birth / Death Model from the surveys that are taken to determine the job growth/ loss each month, that we would be seeing some very ugly monthly jobs reports…  So, in essence, all the hullabaloo about jobs growth, is just that… because there’s really nothing behind all that hollering and dancing in the streets..

But that’s Friday… Today’s Data Cupboard has the May Factory Orders, which is what I consider to be a piece of what I call “real economic data”… And Factory Orders for May are expected to print even more negative than April’s negative -0.2%…  Durable & Capital Goods Orders, Factory Orders, Industrial Production, Capital Utilization, Retail Sales, the Labor Participation, and the ISM are “real economic data”… And like I said on Monday, the ISM is the only piece of “real economic data” that’s been a bright spot. So what’s up with that? How can manufacturing be a bright spot when Industrial Production and Factory Orders are in the red? Beats me, folks… Just another stranger than fiction item for us to deal with!

I told you Monday that I got a lot of response from my Tweet on Friday about the drop in Personal Spending…  And then I came across this that really helped me stick out my chest, and say… yes, I said that!

Have I told you lately, that I love you… No wait! Have I told you lately that… I truly enjoy the writings of Grant Williams and his Things That Go Hmmmm, letter that arrives in my email box every other Sunday? This past Sunday had a quote in it that I thought just supported what I’ve been telling you for some time now … That the U.S. Consumer has tapped out! This was taken from iNet and is investment analyst, Jim Chanos speaking on this very thing…

“(iNet Economics): We’re seeing weak consumer spending numbers in both auto and housing, which are big drivers of the economy. With unemployment so low and the expansion where it is, these figures should be better than they are. There are portents of even worse things when you look at state and federal tax receipts, which are down, and other leading indicators.

It could all just be a soft spot in an ongoing expansion — time will tell. But the narrative we were told is that animal spirits would take us to the next level of economic activity. That clearly is not happening in mid-2017. We’re 8 years into an economic expansion, and economists say that the modern U.S. economy has never gone more than 10 years without a recession. So as recoveries go we are well into it.

People have bought their cars and remodeled their houses and done a lot of things that one does in an economic recovery. I think incremental spending [spending based on increased disposable income] is going to be harder and harder to come by as time goes on.” – Jim Chanos

You tell ’em Jim! Because that’s what I’ve been doing for some time now! And the U.S. economic train chugs along to Recessionville…

To recap… Monday’s dollar days was very impressive and the dollar took some mighty swings at the currencies, metals, bonds and other commodities. Yesterday, while we shot of fireworks, N. Korea had  fireworks of their own as they successfully fired off a ICBM that could reach the U.S. Chuck thought that would be the thing to turn Gold around, but NOOOOOOO! Russia and China sign agreements to further trade and other things, and China opens up their bond market! Just another step to gaining a wider distribution of their currency folks…

For What It’s Worth…  On Monday I told you that the world’s debt was $217 Trillion, and today I’m going to tell you something else about that amount of debt… You can find it here in the RT:

Or, here’s your snippet: ”

Global debt levels have surged to a record $217 trillion in the first quarter of the year. This is 327 percent of the world’s annual economic output (GDP), reports the Institute of International Finance (IIF).

The surging debt was driven by emerging economies, which have increased borrowing by $3 trillion to $56 trillion. This amounts to 218 percent of their combined economic output, five percentage points greater year on year

The biggest contributor was China with $2 trillion. In June, the International Monetary Fund urged Beijing to tackle its ballooning debt, describing it as unusually high for a developing economy. Some estimates say China’s debt stands at 260 percent of its GDP.

Advanced economies have cut debt levels by $2 trillion over the past year. However, the US is approaching $20 trillion, almost 10 percent of global debt.

“Rising debt may I should say “is – and will continue to  create headwinds for long-term growth and eventually I should say “soon will” pose risks for financial stability,” the report said.”

Chuck again… I like how the report talked about China’s debt, and kind of flies over the U.S. Debt… Interesting don’t you think?

Currencies today 7/6/17… American Style: A$ .7590, kiwi .7265, C$ .7717, euro 1.1320, sterling 1.2910, Swiss $.9676, … European Style: rand 13.4420, krone 8.41, SEK 8.5140, forint 272.44, zloty 3.7508, koruna 23.0505, RUB 59.28, yen 113.65, sing 1.3834, HKD 7.8070, INR 64.82, China 6.7991, peso 18.32, BRL 3.3029, Dollar Index 96.44, Oil $46.21, 10-year 2.35%, Silver $15.91, Platinum $904.27, Palladium $847.24, and Gold… $1,218.40

That’s it for today… Well, a very nice weekend that spilled over to Monday, at Bull Shoals Lake in Northern Arkansas, came to an end yesterday. I was beat when I got home! Our 4th of July celebration was non-existent, as I worked on crossword puzzles… Are we really getting that old, I asked myself? My beloved Cardinals can’t seem to find a real winning streak, as they continue to blow games they should have won! UGH! Sorry about the tardiness of Monday’s letter… There are still some kinks we have to work out before this runs as smoothly as it did before… Foghat takes us to the finish line today with their song: Take It, Or Leave it… And with that I hope you have a Wonderful Wednesday, and Be Good To Yourself!

Chuck Butler



Pieces Of The Puzzle… Revealed!

Chuck Butler’s… A Pfennig For Your Thoughts

  • It’s a dollar day
  • Russia leaves Recessionville!
  • While the U.S. heads there!
  • Gold can’t seem to find a bid!

July 2, 2017….

Good day… And a Marvelous Monday to you! Welcome to July too! Pfennig Tradition is very clear on the first working day of July, and thanks to Uriah Heep, we start it like this… There I was, on a July morning… I was looking for love, with the strength of a new day dawning, and a beautiful sun… Well, it’s raining outside this morning, so I don’t think I’ll see a beautiful sun today, but yesterday and Saturday were simply beautiful! I’m coming to you live from Bull Shoals Lake, in Arkansas this morning. Oh, the places that the Pfennig has been written from through the years! Neil Young greets me this morning with his song from the album of the same name: Harvest…

Well, last week, we finished the first 6 months of the year, and the dollar had its worst 6-month start to a year since 2006! But, all the negative sentiment toward the dollar isn’t going to stop the dollar from having “days” of rebound… And that’s exactly what we have going on this morning. The Dollar Index has rebounded to back above 96 (last week it had fallen from a 97 handle to a 95 handle). Last night when I tested the WIFI here, at the host’s lake house, which by the way has a beautiful view of the lake, the euro was 1.1415, but this morning it is trading 1.1370-ish…

It’s a strange move given all the recent negative sentiment toward the dollar, folks, but these things happen, as the dollar bulls try to reverse the trend, and this won’t be the last time it happens, as the winds of change sweep across the dollar…  The currencies, minus the Petrol Currencies, are down today, and Gold is down again this morning, and  the U.S. Treasury 10-year yield has really begun to move higher and is 2.31% this morning…

But… the price of Oil is stronger and is trading with a $46 handle this morning, with all the talk this weekend going on about how the rout in the Oil price is over… I doubt that seriously, it may well be over for now, but unless the whole process of rising price brings on the shale producers, who then glut supplies, thus causing a dive in the Oil prices, has changed, then I don’t see how Oil gets out of this process…

As far as the Petrol Currencies that includes: Russian rubles, Norwegian krone, Canadian loonies, and Brazilian real, are concerned, they’re loving the mini-rally for the price of Oil… And this morning, the Russian ruble has taken its place as the lead dog of this group once again…

Speaking of Russia….

I can hear the people of Russia now… They’re saying… “sanctions, schmanctions!” Why? Well, it was reported on Friday that Russia’s economy grew 3.1% and their industrial growth was even better at 5.6%, I do believe that both of these were VS prints a year ago… take these two excellent prints, and add in the Industrial Production print that saw IP grow at 4.8% in May, and what you have are great indications that the Russian economy is surging out of their recession, with vigor! No dilly-dallying around here folks, get on the growth train and ride it our of recessionville… The Russian economy will be passing the U.S. economy going in opposite directions!

Speaking of the U.S. economy… If you joined me on Twitter last Friday, you already know this… Personal Spending dropped in May from 0.4% in April to 0.1% in May… The U.S. Consumer has tapped out! I’ll have more on the U.S. economy in a minute or two, but I just had to get that out there… If you missed class on Friday, and nowadays I can tell just how many of you do miss class on a particular day, I’m on Twitter now, and if you would like to receive periodic mid-day updates on things in the markets then go to Twitter, and find me at #ChuckOButlerJr…

Well, what about this dollar strength today? is it for real? Well, the answer to that question is a big fat yes, but for today only!  As I explained above, we’ll see these “dollar days” from time to time now that the overall sentiment toward the dollar has shifted over to the euro.  Wanna know why I believe the strong dollar trend is over?  Well, if you watch the dollar’s performance in the past few months, when  positive economic data prints, the dollar can’t seem to muster any positive traction, but when negative economic data prints, the dollar gets sold quickly…

For instance, today’s Data Cupboard has the June ISM (manufacturing Index) that is expected to rise, but the dollar has already seen a mini-rally overnight, so I doubt it gets much traction from that positive print… But, when we come back from our Independence Day Holiday, which falls on a Tuesday, and we get back on Wednesday, we’ll see May Factory Orders, and they will be even more negative than April’s -0.2% print! And I expect we’ll see the dollar get sold on that negative print!

The week culminates with the Jobs Jamboree on Friday… And here’s another piece of the strong dollar trend ending, puzzle…  Did you know that the dollar has slumped in 9 of the past 10 Jobs Jamboree’s even when there as a “better than expected print”…  I put that last part in prentices because, well, Longtime Readers know that I point out all BLS jobs reports as “questionable”…  But I think that’s an important piece of the puzzle folks… That the dollar can’t find any love even with data should send some love the dollar’s way…

I received some good traction from the Tweet I sent out on Friday, so keep them coming! But like I said, I won’t be sending Tweets out all the time, only when something happens mid-day that warrants a Tweet! And while I’m at it here… Tomorrow is a Holiday, so no Pfennig tomorrow… And Wednesday is also a travel day for me, back home, so no Pfennig on Wednesday either, but I’ll be back loaded for bear on Thursday! With Factory Orders printing on Wednesday, it might warrant a Tweet!

Well, Gold just can’t seem to find a bid these days, and I believe something “fishy” is going on… The overall sentiment toward the dollar has shifted, and when that happens Gold usually benefits. But not this time… You don’t think that the powers that be, know the U.S. economy is heading to Recessionville, and the dollar is about to go on a long trend of being weak again, so they want Gold to start from a lower base do you?

Nah, that couldn’t happen… wink, wink…  So,  Gold  closed Friday at $1,241.20 spot, down $4.20 from Thursday’s close. And the shiny metal is down about $7 in the early morning trading today… UGH!  I just keep saying to myself… “It’s the summer doldrums, Chuck.. The summer doldrums”…  And that take my mind off all the other dastardly things that pop into my head about what’s going on with Gold right now!

Like I said above, the U.S. Data Cupboard has the ISM print today… I find this interesting, in that the ISM (manufacturing index) continues to be the lone bright spot for the U.S. economy, while the Factory Orders, Durable Goods and Capital Goods Orders, all print negative, and Retail Sales fall each month, and Personal Spending falls like a rock…  So, how can the ISM continue to rise, with everything around it printing either negative, or very weak?

To recap… It’s a “dollar day” and the currencies, minus the Petrol Currencies, who have their own little rally going, are down along with gold and bond prices (Yields up, prices down). The price of Oil continues to add to its mini-rally and trades with a $46 handle this morning. Russia prints some very good data on Friday, thus showing they are coming out of their recession with vim and vigor! Chuck points out why he believes the strong dollar trend is ending…

For What it’s Worth…  Well, the world is now $217 Trillion in debt… That’s right… And of course that doesn’t take into consideration unfunded liabilities…  How in the World can this every be paid off?  it can’t, unless we have defaults along the way…  I hate to have to bring this story to you, but… Most people just don’t care, they think it matters nothing to them that the world is in so much debt… UGH!  My friend, and publishing guru, Bill Bonner calls these people “sheeple”…  that sounds about right, eh?

Anyway, here’s a link to the story on the $217 Trillion in debt…

Or, here’s your snippet: “Global debt levels have surged to a record $217 trillion in the first quarter of the year. This is 327 percent of the world’s annual economic output (GDP), reports the Institute of International Finance (IIF).

The surging debt was driven by emerging economies, which have increased borrowing by $3 trillion to $56 trillion. This amounts to 218 percent of their combined economic output, five percentage points greater year on year.”

Chuck again… I just shake my head in disbelief at these numbers folks…  it’ll all end up in tears one day… Not today, or tomorrow, but one day…

Currencies today 7/3/17… American Style: A$ .7657, kiwi .7295, C$ .77, euro 1.1375, sterling 1.2965, Swiss .9612, … European Style: rand 13.1590, krone 8.3652, SEK 8.4745, HUF 271.41, zloty 3.7249, koruna 22.9896, RUB 58.87, yen 112.94, sing 1.3814, HKD 7.8080, INR 64.88, China 6.7770, peso 18.16, BRL 3.2784, Dollar Index 96.04, Oil $46.01, 10-year 2.31%, Silver $16.52, Platinum $916.22, Palladium $845.68, and Gold… $1,234.10

That’s it for today… I can smell the coffee brewing!  A Big Thanks to our former neighbors, Kevin and Lisa Yanker, for allowing us to invade their lake house! Well, my beloved Cardinals are looking a little better these days, as they took 4 of 6 from the two division leaders this past week… I had a flare up of my plantar fasciitis on Friday, you should have seen me trying to walk, which is already strangely done since I use a cane to support my right side when I walk! But it’s all better now… just a flare up… The Turtles take us to the finish line today with their song: It Ain’t Me Babe, the old Bob Dylan song..  and with that, it’s time to go, so please go have a Marvelous Monday, and Be Good To Yourself!


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China’s PMI Beats Expectations!

Good day and a Happy Friday to one and all! I’m so ticked off right now that I could spit! I had written the whole letter this morning, and was ready to hit send, when it locked up, and told me it wasn’t responding, then my whole letter, vanished! Gone! I cursed a few words, threw something, and then realized that none of that was going to help me, for I had to sit down and rewrite the letter! So, in the original this morning I talked about how this year is the 50th anniversary of the Beatles iconic rock album: Sgt. Pepper’s Lonely Hearts Club Band, and the reason I mentioned that is because I was greeted this morning with two back-to-back songs from the album… She’s Leaving Home, and When I’m 64…

I also mentioned that in my next weekly article for the Dow Theory Letters website ( I talk bit about the 50th anniversary of the Summer of Love… Hippies on the corner of Haight and Ashbury in San Francisco and Sgt. Pepper’s was the soundtrack of their summer!

Well, the 3-day drop in the Dollar Index was stopped overnight, as the euro backed off its assault on the last line of defense of 1.1428, when their latest CPI for the Eurozone came in weaker than the previous month. Eurozone CPI for May was 1.3% VS 1.4% in April.  And with the traders perverse way they value currencies these days, that meant some profit taking was pushed on the euro.

Yesterday, I told you that the charts people has said that the last line of defense in the euro was 1.1428, and after that level was taken out, the next stop was 1.17… Well, the euro traded to 1.1435 yesterday afternoon, but that didn’t last long, and so I would have to say that the level wasn’t really taken out, yet, that is… I do fully expect it to be taken out, as I keep saying the sentiment toward the euro has changed, and traders are changing from dollars to euros…

Overnight, China printed a better than expected PMI (manufacturing index) and that has ramifications toward the Global Growth revival, the antipodean currencies, and the Chinese renminbi. The renminbi was allowed to appreciate near the max for one day’s move, and that has the renminbi among the best performing currencies overnight, and it’s not often I get to say that!

And the antipodean currencies of Australia and New Zealand, A$’s and kiwi respectively, were already firmly on the rally tracks, but this data from China has helped propel them further down the tracks! I’ve been impressed with these two, after seeing a drop and breather in their recent rally a couple of days ago, and I said that they needed to get off the canvas and get back to rallying, and that’s exactly what they’ve done!

The price of Oil continues its mini-rally, and is trading firmly within the $45 handle this morning. The weekly supplies report that printed on Wednesday did show that supplies had eased, and that was huge for the price of Oil, as the main contributor of its drop in price was the supply glut of Oil.

The Petrol Currencies are loving this mini-rally in Oil, and the fact that the Dollar Index is falling like a rock… And the Russian ruble was able to participate in the rally overnight. Yesterday, I had told you that the ruble wasn’t participating in the rally, but that got corrected overnight…

A Petrol Currency that is participating is the Canadian dollar / loonie… Some of you who were reading my posts to the website ( will recall me saying about 10 days ago that loonie traders were scratching their collective heads trying to figure out what was moving the loonie stronger. Well they don’t have to scratch any longer, as the min-rally in Oil, the Dollar index Drop, and the fact that Bank of Canada (BOC) Gov. Poloz actually mentioned that he was considering a rate hike, has really pushed the loonie to higher ground!

I have some friends from Canada that spend their winters in S. Florida, like I do. We’re condo neighbors. And last winter they were lamenting the weak loonie, which back then was about 70-cents, and each day I would report that the loonie was getting better, and by the time winter was over, the loonie was 72-cents… I wonder what they think of 77-cents now!

Of course 77-cents is not parity with the dollar, where the loonie traded a few years ago… But you have to step on each rung of a ladder to reach the roof, and the same goes for the loonie…

I don’t know if you’ve noticed or not, but the Swiss franc and Japanese yen haven’t been on many traders’ minds lately, except to sell them. That’s because everything is beautiful according to the Janet Yellen, and so there’s no need for “safe havens”…

Today, we’ll finally get another piece of “real economic data”… Personal Income and Spending will print today, with the Spending piece the one that really tells us the pulse of the economy, and like I’ve said I do expect that the Spending data will show a deep drop from the April print of .04…

Gold lost another $3.40 yesterday to close at 1.245.40, and is down another $3 in the early morning trading… I have to keep reminding myself that it’s summer…  Traditionally, the metals get the “summer doldrums” and trade like that during the summer… But the Dollar Index has seen 3 days of dropping like a rock, and usually that gives Gold a boost, but not this time, and the reason is, no wait, Chuck, don’t go there, just keep repeating, It’s the summer doldrums, over and over and over again…

I do want to point out that the physical demand by Central Banks continues to be off the charts! But this physical demand isn’t driving the price of Gold right now, the short Gold paper trades are…

At this point, I’m sure I had other things I talked about this morning, but don’t recall them right now, so I’m sorry, but rewriting something you just finished isn’t as fun as a barrel of monkeys…

Before I head to the Big Finish today, I HAVE to show you this… Simon Black is a financial newsletter writer that I follow regularly, and yesterday he was reporting that there’s a new Bill being introduced on the floor of the Senate and is titled: Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017…

This is getting pretty crazy folks… I can’t believe the people we send to Washington would come up with this stuff! But then when they meet us in their town halls, they don’t tell us what they have up their sleeves… Because they would be run out of town if they did! So, I suggest you look into this bill and then call or write your senators and tell them to stop this lunacy! Because there’s nothing new in money laundering that would need additional regulations. There’s nothing new in terrorist financing that would need additional regulations… And then there’s the counterfeiting… You don’t think they’re talking about the cryptocurrencies do you? I do!

And on top of that, there’s also a caveat in the bill that, well, I’ll let Simon Black tell you, because if I typed it out, I would get sick to my stomach… “Among the bill’s sweeping provisions, the government aims to greatly extend its authority to seize your assets through “Civil Asset Forfeiture”.
Civil Asset Forfeiture rules allow the government to take whatever they want from you, without a trial or any due process.

This new bill adds a laundry list of offenses for which they can legally seize your assets… all of which pertain to money laundering and other financial crimes.

Here’s the thing, though: they’ve also vastly expanded on the definition of such ‘financial crimes’, including failure to fill out a form if you happen to be transporting more than $10,000 worth of ‘monetary instruments’.” – Simon Black

Oh woe is me… and yesterday I asked the question about whether or not Americans were feeling as though their freedoms and liberties were being taken away from them… Had I seen this before I asked that question, I certainly wouldn’t have had to ask the question now would I?

To recap… The drop in the Dollar Index has held up for a breather overnight, after 3 days of dropping like a rock! Eurozone CPI was 1.3% VS 1.4% previously, and that brought the euro back from its high yesterday of 1.1435 to hang around the 1.14 figure this morning, but that could change once the U.S. data prints today. China posted a better than expected PMI for May, and that gave the renminbi, A$, and kiwi all a good reason to rally on the night!

I had a great For What It’s Worth article for you from Bloomberg, that highlighted how Goldman Sachs Commodity Analysts were asking the question of “how did we get this so wrong?” when talking about their call for Commodities to rally this year..  But it’s gone now, and I really don’t have time to find another one!   So… there you go! The article is here:

Currencies today 6/30/17… American Style: A$ .7684, kiwi .7328, C$ .7705, euro 1.1405, sterling 1.2969, Swiss $.9589, …. European Style: rand 13.0760, krone 8.3934, SEK 8.4537 (krona is catching up with krone!) HUF 271.16, zloty 3.7073, koruna 23.0174, RUB 59.21, yen 111.98, sing 1.3765, HKD 7.8050, INR 64.69, China 6.7832, peso 18.03, BRL 3.2890, Dollar Index 95.77, Oil $45.31, 10-year 2.38% (this yield has gained .22 in the past week… somethings going on here) Silver $16.59, Platinum $921.46, Palladium $841.76, and Gold… $1,242.50

That’s it for today…  well the bats came alive yesterday in the desert, so no 9th inning drama, as the Cardinals took 2 of 3 and should have swept, the D-Backs… OH! I have an announcement this morning… So get out your #2 pencils and a piece of paper and write this down… Chuck Butler is now on Twitter @ #ChuckOButlerjr go find me, click on follow, and from here on out, I’ll be sending out tweets during the day regarding intra-day moves in the markets… So, you can get it there first, before it hits the Pfennig the next day! I don’t promise to send out something daily, but every now and then when something happens mid-day that makes sense that people know about… Just another free service from me…   The Blue Jays (former members of the Moody Blues) takes us to the finish line today with their song: Saved By The Music…   Which is what it did for me, this morning after having to rewrite the letter! UGH   I hope you have a Fantastico Friday and Be Good To Yourself!


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Sentiment Toward The Dollar Fades…

Good day… and a Tub Thumpin’ Thursday to you! I feel like doing some Tub Thumpin’ today, so watch out! HA! Well, I have to start today’s letter with two HUGE apologies… (3 actually, but 2 are HUGE!) My good friend, Duane, has a saying that fits the bill here, when he’s done something, well, let’s just say wrong… He says, “I’m going to have to smoke a turd in Hell for this”… And so that’s where I am today, because… I TOTALLY forgot that yesterday was Alex’s Birthday, and the 14th wedding anniversary of daughter Dawn and husband Jerry! I guess, I just didn’t realize that it was the 28th… And I didn’t have infusion confusion to blame it on either! So… Happy (belated) 22nd Birthday Alex… And Happy Anniversary Dawn and Jerry! The Moody Blues greet me this morning with their song: I Know You’re Out There Somewhere…

Looky, looky, what have we here? The euro trading like it remembers what it feels like to gain VS the dollar? Well, that’s what we have, and boy did I hit the nail on the head last week, when I said that I thought the sentiment toward the euro had moved from the dollar to the single unit.. After trying 6 times in the past month to move past 1.13, the euro finally did so, and this morning it has climbed further to trade in the 1.14 handle!

I’m told by traders that 1.1428 remains one of the last lines of defense for the euro and IF it can take that figure out, the next stop is 1.17!!!!! My Thursday column for the I talk exclusively about the euro, where it’s been, what it’s doing now, and where I think it’s going… I really think that should you want to read about other things besides currencies, metals, economies, and dolts, that you might want to sign up and send your payment to the Aden Forecast people, because that’s where my weekly articles are going to print folks… And like I told you last week, that I’m sure not many of you saw, because it was only on the website… The Aden Sisters have given me a lot of rope to talk about just about anything I want that has to do with global economics… I still can’t believe I’ve been given that freedom!

The Dollar Index has fallen to 95.83 this morning, and it’s all about the euro’s move, folks…  But there are other currencies moving higher VS the dollar this morning too… The Norwegian krone has been awakened from its slumber, as the krone is getting a double shot of energy this morning. The price of Oil is nearing $45, and the euro is on the rally tracks, which is HUGE for the krone…  And the krone’s kissing cousin neighbor, the Swedish krona is tagging along.

I said yesterday that the currencies of Australia and New Zealand, A$’s and kiwi respectively, had seen some profit taking the night before, and now they had to pull themselves up from the canvas and mount a charge to get back to 76 & 73-cents respectively. Well, that’s exactly what these two did yesterday, and in last night’s trading. The A$ is well into the 76-cent handle, and kiwi is smack dab on 73-cents as I write.

Well, the Big News besides the euro’s move this morning, is the word going around the globe that “borrowing costs are going higher”… Get this… Bank of England (BOE) Gov. Mark Carney, he of the promises to remove accommodation in both Canada and England in the past, but never did, told reporters yesterday that “the time is nearing for a rate hike”…  Really? You want the markets to believe you, because “this time is different”?  Just LAST WEEK you said that “zero interest rates were appropriate”

Pound sterling is climbing steadily again but I think most of its move has come from the euro’s rally, and not Mark Carney crying wolf again…

In Canada, Bank of Canada (BOC) Gov. Stephen Poloz, told reporters that “he might be considering a rate hike” Really, Stephen? I’ve been yelling at you since you took over the BOC to hike rates to snuff out the housing bubbles in Toronto and Vancouver, but nooooooooo!  But when everyone else is doing the rate hike shuffle, you decide to join in?  Now?  I don’t get it folks… These Central Bankers have gone bonkers!

But the loonie is enjoying both the rise in the price of Oil and the comments by Poloz…  Don’t look now but the loonie is zeroing in on 77-cents!

Speaking of Central Bankers going bonkers…  Yesterday in the 5 Minute Forecast ( Dave Gonigam, wrote about a town hall meeting he went to the previous night to hear Neil Kashkari, the Minneapolis Fed President speak…

Yesterday I told you about how Fed Chair, Janet Yellen, had spoken and given me and anyone else that would believe her a warm and fuzzy about how the Fed had come to the rescue and saved the world, and made the Banks better for it all, and that we would never see another “financial crisis” in our lifetime… OK, I’m kidding when I say I believed her…

Instead, I would rather believe Fed Minneapolis President, Neil Kashkari, who had a slightly different viewpoint on where we are… let’s listen in as he spoke at a town hall meeting on Tuesday night, which was AFTER Yellen had spoken in London… Here’s Mr. Kashkari…

“There’s no question the banking regulators blew it leading up to the [2008] financial crisis. And the problem is we’re gonna blow it again… Human societies are prone to mass delusion .” – Neil Kashkari

Now, that’s what I call being transparent! And I also like the fact that he’s been on a crusade since his first day in the office to break of the Big Banks… In his first speech as Fed president, he said, “I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy.”

I’d say that there will be some friction at the next meeting in the Eccles Building (Fed Headquarters) the next time these two (Yellen and Kashkari) meet face to face… I had to laugh out loud there, because I got this flash in my mind of those two meeting face to face, and it being like the old Chevy Chase/ Jane Curtain skit on SNL Point/ Counterpoint… Now that’s funny stuff!

Of course, all this Central Bank craziness isn’t funny, because they are messing with your money, folks…  I received a bank statement yesterday, and saw the interest that was added to my balance, and had to laugh, because if I didn’t laugh, I was going to cry!

So, the price of Oil is on the rebound? Well, sort of..  late last week, the price of Oil had slipped to a low $42 handle and the slide didn’t look like it was going to stop there… But then a funny thing happened on the way to the forum, and the price of Oil turned on a dime, and this morning it’s knocking on the door of a $45 handle.  I warned you about overcrowded trades the other day, and the short trades in Oil were a prime example of an overcrowded trade…

Usually, I don’t need to check the price of Oil once I look at how the Russian ruble is performing, but that wasn’t the case this morning. The price of Oil is rebounding, and the ruble is not…  The Norwegian krone, Canadian loonie, the Brazilian real are on the rally tracks but not the Russian ruble…  Maybe it will be a delayed reaction? HA!

Once again yesterday, the price of Gold saw an early morning trading bounce, only to have it cut down by “da boyz” as Ed Steer calls them… Gold was able to eke out a $2.10 gain on the day, to close the day at $1,248.80… But is down $2 in the early morning trading today… I’m really confused by this trading in Gold… The Dollar Index is dropping like a rock, and yet Gold can’t seem to find a bid that lasts longer than a NY Minute…

One of these days, Alice… To the Moon!  That’s what I always think of when I see trading in Gold that doesn’t make sense to me…  One of these days, Alice… To the Moon!

The U.S. Data Cupboard yesterday, saw the Advanced Trade Balance, which I explained previously, is simply the goods traded to and from the U.S. and in a few days the actual Trade Balance prints, when all the other stuff gets added in… And the Advanced Trade Balance was a $65.9 Billion deficit for May…  The dollar was still wreaking havoc on trade in May, so this certainly makes sense to me…

On Tuesday, the U.S. Data Cupboard showed that Consumer Sentiment had risen this month from an index number of 117.6 to 118.9… I guess consumers are drinking the Kool-Aid that the Fed keeps dishing out, that all this economic weakness is just transitory, and the good times are about to hit us…  Now, had they called me and asked me about my sentiment, I would have given them an earful of weak data reports, a Central Bank that’s hell bound and whiskey bent to hike rates in the face of all these weak data reports…  Like the one that will print tomorrow that will most likely show Personal Spending dropping like a rock in May…

So, one has to wonder just what questions are asked when taking these Confidence/ Sentiment surveys, because if consumer are so confident, why then aren’t they spending money?  I shake my head in disbelief that this stuff goes on…

Oh! I almost forgot to report this data… Existing Home Sales are seeing some real problems folks… This from

After modest bounces in existing and new home sales (despite weakness in starts and permits and mortgage application declines), pending home sales in May tumbled 0.8% MoM and were revised even lower (-1.7%) in April. This dismal print was below all economists’ expectations, missing by 4 standard deviations.

This is the 3rd straight monthly drop and 2nd straight annual decline in pending home sales.

YIKES! Are we beginning to see the Housing sector in reverse? It sure seems that way to me, folks…

To recap…  The euro is leading the charge VS the dollar, and the Dollar Index has fallen to 95.83, after trading 97.70 just a week ago. Yellen, Carney and Poloz all tell reporters that “borrowing costs are going higher” Chuck points out that Carney has made promises to remove accommodation at both the Bank of Canada and now the Bank of England, and the boy who cried wolf, has yet to make a move…  The price of Oil has seen a mini-rebound, and the Petrol Currencies are in rally mode, except the Russian ruble, who for some reason unknown to Chuck, this morning, can’t find a bid…

Before I head to the Big Finish this morning, I came across this, and thought long about it, and remembered telling you, dear reader, a very long time ago, that our personal freedoms were being taken away… and then this printed… According to a new Gallup Poll, more Americans see their liberties in decline in the US. U.S. freedom ranking in the world has declined as well. What’s going on here and why? I saw this and had to pose the question to you dear reader, is this what you feel too?

For What it’s Worth… Well, when all the talk was about raising the minimum wage to $15 per hour, I talked about how that would like shooting these minimum wage employees in the foot, for employers would find ways to circumvent this increase in costs… And then I saw this on G. Edward Griffin’s website. if that name is familiar to you, he’s the author of the great book: The Creature From Jekyll Island… a book about how and why the Fed began, and where its gone from its early days…  it’s a long book, but one I truly believe anyone would need to read…  Anyway, you can find the article here:

Or, Here’s your snippet: “Seattle passed a law setting the minimum wage at $15 per hour, which is a 3% increase. This caused many employers to cut the hours of their unskilled workers by 9% in order to stay in business. [9% rather than 3% is because, when the minimum wage goes up, it forces other wages up also to keep skilled workers at a higher pay scale than minimum. There is a ripple effect all the way up to middle management. To cover this extra cost, employers were compelled to cut back the working hours of unskilled workers by 9%. Working fewer hours caused a lower income of minimum-wage workers by $125 per month.”

Chuck again… The actual full article is somewhere else, but you can get there from Mr. Griffin’s website, that I’ve given you above.

Currencies today 6/29/17… American Style: A$ .7671, kiwi .73, C$ .7678, euro 1.1407, sterling 1.2965, Swiss $.9580, … European Style: rand 12.9376, krone 8.3842, SEK 8.5140, HUF 271.70, zloty 3.7165, koruna 23.0560, RUB 59.34, yen 112.80, sing 1.3788, HKD 7.8056, INR 64.56, China 6.8007, peso 17.85, BRL 3.3020, Dollar Index 95.83, Oil $44.96, 10-year 2.24%, Silver $16.84, Platinum $919.26, Palladium $860.35, and Gold… $1,247.00

That’s it for today…  My beloved Cardinals tried to give another game away last night in the 9th inning, but held on this time for the win…  Most of the family came to the house last night for Alex’s Birthday dinner, and Alex brought 3 of his roommates along… You should have seen those boys eat! I guess when you live frugal college life you take advantage of a home cooked meal when you can find one! And I said “boys” I meant young men… I feel like I’ve been doing more reading and research now that I’m “semi-retired” than I did before! I spend a good portion of the day at my writing desk, reading… I’ve got to get out more! But I don’t have anyone to “play with”… HAHAHAHAHA! And with that thought, Cat Stevens takes us to the finish line today with his song: Peace Train…   I hope you have a Tub Thumpin’ Thursday, and Be Good To Yourself!

Chuck Butler

Here We Go?

Good day… and a Wonderful Wednesday to you! I’m looking for something crunchy in the pantry again this morning! I think the infusions have caught up with me. Yesterday I took an afternoon nap, I hadn’t don’t that since adapting to the CPAP machine! But like I said last Friday, “infusions beat CPAP”…  Crosby, Stills and Nash greet me this morning with their iconic song… Ohio…

As you all saw yesterday, the Pfennig is BACK! Well, in email form that is… I’ve been writing the daily and posting it to the website… I want to thank the following for all their help in making this happen: Nuria Pujol, Joe Grandall, Lesly Foster, Frank Trotter, and of course Mary Anne and Pamela Aden..

Well, I can’t go too far into the letter this morning, without pointing out that the currencies, led by the Big Dog, euro, are chasing the dollar down the street…

Yesterday was a good day for the euro, as it not only flew through the 1.12 handle, it climbed steadily throughout the day in the 1.13 handle.. 1.13 had been the glass ceiling if you will, for the euro so it will be interesting to see if it can continue to gain momentum today and tomorrow, and the next day and so on… Back in 2003, when the euro finally got going, and I mean really got going, not just 1 or 2 cents, Mike!, the currency gained nearly every day. Every day we saw a new record level for the currency… OK, I’m sure there were some profit taking days and that, but for the most part, it was rally on Wayne, rally on Garth, for the euro in 2003… I mention this because I’m getting that rainy day feeling again… No wait! The only rain on a parade is going to come down on the dollar’s parade! But, just to remind everyone, late in 2002, I wrote a white paper titled: 2003: The Year of the Euro… And it sure turned out to be just that! I have no plans on writing a new white paper, but if I did, I would call it: 2017: the return of the euro!

The antipodean currencies of Australia and New Zealand saw some profit taking yesterday after hitting 76 and 73-cents respectively… Now these two have to gather themselves, and get back up, to mount a charge toward those two levels again.

The Reserve Bank of New Zealand (RBNZ) issued their Statement of Intent for 2017 (SOI) and in it RBNZ Gov. Wheeler had this to say, “The outlook for New Zealand’s economic growth remains positive, albeit with considerable uncertainty remaining, especially internationally. We are working to deepen the Bank’s understanding of the evolving conditions affecting the New Zealand economy and their implications for monetary policy.”

I’m all about kiwi these days, folks… euros and kiwi are my two fave currencies these days… Let’s see how far they can run!

I say it was “profit taking” with full confidence, because other than Swiss francs and these two antipodean currencies, the rest of the currencies have added something to their levels, as witnessed by the Dollar Index which has fallen to 96.27, when just last week it was 97.70… Part of what’s weighing on the dollar this morning, is the news that the IMF had downgraded their forecast for U.S. growth…  let’s listen in to the IMF to their reasons for doing so..

“The world’s biggest economy will probably have a hard time hitting Trump’s target of 3% growth, as it’s faced with problems ranging from an aging population to low productivity growth, and with a labor market already at full employment.”

Wait! What? There’s no mention of a weakening economy? No mention of exploding debt concerns? No mention of a Central Bank that is shooting itself in the foot? Come on, IMF, get some intestinal fortitude, and call the U.S. economy what it is… Heading to recessionville!

Well, the price of Oil has bounced back and is trading above the $44 handle this morning… And the Petrol Currencies that include the Russian ruble, Brazilian real, Norwegian krone, and others, are breathing a sigh of relief once again…  Of course $44 is not $60, which is where the OPEC members thought they would see the price of Oil once they cut Oil production late last year… Of course, our friends over at OPEC, NOT! forgot all about the U.S. shale producers, and their ability to ramp up production on the drop of a hat… And once the price of Oil rose above $50, those U.S. shale producers ramped up production, so much that we have Oil supplies coming out our ears, and when supplies are that rich, what happens to price? It falls… And that’s where we are with the price of Oil..

There’s an article on MarketWatch this morning that’s calling for a “crash in the shale Oil production”… So, I guess the folks at OPEC needn’t worry too much…  You should check this article out regarding the U.S. Oil producers…

Boy, were there so stories about the “fat finger” trader that sold 1.8 Million ounces of Gold in one minute on Monday morning! The more I read about this, I change my mind about the whole thing…  While I still believe it was an “engineered” sell off, I can’t help but think that some junior trader mistook Ounces for lots…  But that was Monday, and yesterday, Gold was up $5 in the early morning trading, but that gain didn’t last, and by the time the after hours trades went through, Gold ended up gaining only $2.20 on the day to end up at $1,246.70…

The shiny metal is up another $5 this morning, but like yesterday, the question arises of  whether or not “da boyz” as Ed Steer calls them, allow that gain to grow, or they hit Gold hard with another blitz of short paper trades… One of these days, these short paper traders will get what’s coming to them, but until then, we have to deal with them… UGH!

Well, today is a “breather day”, as I look at the data cupboards around the world, most of the economic prints will begin tomorrow and continue to Friday… Here in the U.S. the Data Cupboard will have the Case/Shiller Home Price Index for us today… this data is two months old, and therefore I usually forget about them, as they are stale… A lot can happen in two months folks… A Bear Stearns can get bought out and saved in one month, and a Lehman Brothers can be allowed to go bust in another month…  Remember those days? I don’t think I’ll ever forget them…

Speaking of data… On Friday this week, we’ll get to see the color of Personal Income and Spending here in the U.S.  And I think the economy’s direction will be on display here, for I fully expect for Personal Spending to have dropped like a rock in May… And with the U.S. economy so dependent on consumption (personal spending) this weak print will show the weakness in the economy…

But, mother should we trust the government? Who’s fingerprints will be all over the data print on Friday? My friend, and the office manager in my old office, Danielle Goodman, gave me a poster, years ago, from the Pink Floyd album: The Wall…   And it asks this question: Mother should we trust the government? The Wall is the eleventh studio album by Pink Floyd. It was released as a double album on 30 November 1979, and one of the songs on the album is: Another Brick in the Wall..  and asks the question… Mother should we trust the government?  And the question is just as appropriate to be asked today as it was in 1979!

To recap… the currencies, for the most part, are on the rally tracks today, led by the Big Dog, euro, that has run through the 1.12 handle, and is not taking on the 1.13 handle with ease… A$’s and kiwi saw some profit taking overnight after hitting 76& 73-cents respectively. Now they have to get back on their horses! The IMF lowered their forecast for U.S. economic growth yesterday… The did mention falling productivity and an aging population,  but failed to mention, exploding debt, a weakening economy, and a central bank that’s lost its way…

For What it’s Worth… Well, I guess we can all sleep better at night now… No more worries! Blue sky, following me, nothing but blue skies do I see! Janet Yellen has told us that there will be no more financial crises! Yes, it’s all here folks…

Or, here’s your snippet:”Fed Chair Janet Yellen said Tuesday that banks are “very much stronger” and another financial crisis is unlikely anytime soon.
Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the central bank chief said the Fed has learned lessons from the financial crisis and has brought stability to the banking system.

She also made a bold prediction: that another financial crisis the likes of the one that exploded in 2008 was not likely “in our lifetime.” The crisis, which erupted in September 2008 with the implosion of Lehman Brothers but had been stewing for years, would have been “worse than the Great Depression” without the Fed’s intervention, Yellen said.”

Chuck again… Whew! And to think that I was worried about all the debt, derivatives, low productivity, aging population, and a Central Bank hiking rates into a weakening economy! It’s amazing, almost like one of those holistic healers… Janet Yellen has put her hand over the economy and said, “you are healed”!

On a sidebar… Those of you who have seen me talk in the past at conferences, etc. will recall this…  I would always start my talk with a comment about being from St. Louis, the home of the 11 time World Series Champion Cardinals, and then talk about the Pfennig, asking to see a show of hands of those that received the letter already. Then I would say, that after hearing me talk, if you want to sign up for the Pfennig, just come down to the podium, I’ll place my hand over your head, and pronounce you to be a “pfennig reader”! HA!   Those were good times, when I was speaking a lot…  In 2006, the year before my cancer diagnosis, I spoke 35 times…

Currencies today 6/28/17… American Style: A$ .7591, kiwi .7260, C$ .7626, euro 1.1370, sterling 1.2823, Swiss $ .96, … European Style: rand 13.01, krone 8.4230, SEK 8.5916, HUF 272.39, zloty 3.7237, koruna 23.1237, RUB 59.02, yen 112.15, sing 1.3856, HKD 7.8035, INR 64.63, China 6.8205, peso 17.99, BRL 3.3058, Dollar Index 96.27, Oil $44.10, 10-year 2.25%, Silver $16.83, Platinum $921.40, Palladium $863.41, and Gold… $1,252.30

That’s it for today… Another 9th inning debacle for my beloved Cardinals last night, and another loss… UGH! And another beautiful day here in the St. Louis region… Darling daughter, Dawn, and kids, hosted some friends in our pool yesterday. I slept through most of it! It is fun to watch the kids as their confidence grows in the pool, and they can swim. I got some minor work on my car taken care of yesterday, it was long overdue! The mechanic told me that my car runs like a top.. Those are always good words to hear! Big Head Todd takes us to the finish line today with his song: Bittersweet… And with that, it’s time go! I hope you have a Wonderful Wednesday, and Be Good To Yourself!

Chuck Butler





More Negative Data For The U.S.!

Good day… And a Tom Terrific Tuesday to you! Well, I was wrong… (Mark that down!) I thought we would be up and running with the email version of the Pfennig yesterday… But there’s more “tweaking” that has to be completed first, so… This remains the only way to view the Pfennig each day… Pink Floyd greets me this morning with their song, and my fave Pink Floyd song at that: Comfortably Numb…

I’ve used that song title as a phrase to describe the majority of the people in the U.S., saying that they had become comfortably numb about debt. I recall when I first began using the phrase in my writings, and it’s been quite some time ago!

Well, the currencies woke up yesterday, and through the night they partied on Wayne… Party on Garth! I told you yesterday, that I thought the Aussie dollar (A$) was heading for 76-cents, and that’s where it sits this morning… And kiwi, WOW! up to 73-cents this morning. So, I guess there’s no more sneaking around in a dark room so nobody notices for these two. The lights have been turned on, for everyone to see them on the rally tracks!

And someone finally got up to answer the door, and the euro stepped through 1.12, on its way to 1.1250 this morning. Last week, when I made the call for a return to the euro, I titled it. “A Kiss of Death, or a Good Call?” I’m glad to say that we’ve seen no “kiss of death” here…  In my Thursday article for the Dow Theory Letters, I really get into how “sentiment” rules these days, and the sentiment toward the dollar is wearing very thin these days…  I’m just saying…

I read a report this morning that Lola, aka Goldman Sachs was talking down the dollar, saying that “sentiment” toward the dollar was fading. They even talked about how the dollar gets sold by large sums on small negative data and can’t seem to mount a strong rally on any positive data prints…  Well, when I read that, it just confirmed my thought that the strong dollar trend is ending… It will take a while for it to work its way out of portfolios, but it’s ending, folks… I can feel it in my bones!

Yesterday morning, I told you that Gold was down $14 in the early morning trading… Have you heard what caused that move? When I heard what caused it, I said, “Yeah, I believe that one.. NO! and if you do, I’ve got a bridge I would like to sell you!”  So, here’s how the story goes… Apparently, someone with “fat fingers” caused 1.8 Million ounces of Gold to trade in one minute, taking out the whole bid side stack… Really? That’s what you want to go with to explain this move? I shake my head in disbelief, for this was an “engineered” move if I ever saw one!

So, did you back up the truck and load some Gold onto it at the cheaper prices yesterday? I hope you did, because Gold is up $5 in the early morning trading today…  Oh! And this is BIG folks! Lola, aka Goldman Sachs came out with a call yesterday saying that their bullish on Gold!  And you know what I always say… What Lola wants, Lola gets! I’m just saying…

Did you hear the news from India about what is being proposed by the Gov’t regarding Gold? First the Gov’t took some high denomination rupee notes out of circulation last year, and now they want to monitor all Gold held by the citizens. If the Indian citizen holds unreported Gold, the Gov’t wants them to come clean…  So, if it were me… I would tell the Gov’t to go whistle Dixie somewhere, because if I held unreported Gold, it would remain that way!

The Big 3 Central Bankers are on the docket today to speak… First up was European Central Bank (ECB) President, Mario Draghi, who I hear is continuing to tout persistence in his monetary policy, which is all about stimulus…  Next will be Bank of England (BOE) Gov. Mark Carney, who will do his best to keep investors “interested” in the U.K. markets… And then finally, Fed Chair, Janet Yellen, takes the microphone, to do a little Karaoke, no wait! That’s not what she’s taking the microphone for, Chuck! Oh, sorry…  No, karaoke? Oh darn it! No, instead, Yellen will be  in London, talking about global economic issues…

Of these 3, I would think that Yellen has the best chance to really move the markets today, and that “best chances” is like one in 10! But, you never know, right? Stranger things have happened with Central Bankers talk, that’s for sure!

Remember about a month or so ago, I told you how the Chinese were allowing the renminbi to appreciate, almost daily? Well, that ended a couple of weeks ago, and since then, the renminbi has been getting marked down with each fixing…  You know, I thought we would know more by now about how China was going to change the way they price the renminbi VS a basket of currencies. I guess I’ll have to just take the route of good things come to those who wait!

The price of Oil gained about 25-cents in the past 24 hours… Hey! 25-cents doesn’t sound like a lot, but when you’re talking about the number of barrels of Oil that’s traded each day, 25-cents is BIG! And any positive move gets the Petrol Currencies all lathered up. The Russian ruble at one point this year, was the best performing currency, but not any longer, as the drop in the price of Oil has taken a HUGE bite out of the ruble…

When I wake up my laptop each day, I look at the currencies to see what’s happened while I slept, and I look for the Russian ruble, because I can usually tell what the price of Oil is doing, by the performance of the ruble… An unabashed Oil Play if I’ve ever seen one! By that I’ll repeat what I’ve said for a few years now, and that is… If you believe that the price of Oil is going to rally, then look to buy rubles, if you don’t believe the price of Oil is going to rally, then don’t look to buy rubles! that’s right, move along… for these are not the droids you’re looking for!

Speaking of waking up… Man, I did NOT want to wake up this morning! I even had to resort to eating something crunchy this morning while my fat fingers worked the keyboard… Eating something crunchy gets your inner system going, and from there, you’re ready for the day!

The U.S. Data Cupboard yesterday saw May Durable Goods Orders fall -1.1%! I told you it would be negative, but even I didn’t think that it would be THAT negative!  And Capital Goods Orders also printed negative, posting a -0.2% decline for May… So, chalk up another “real economic data” print as negative, thus proving my point over and over again that the economy is heading to recessionville, but, yet, the Fed keeps hiking rates into the weakening…

Before I head to the Big Finish today, I wanted to just mention that the President of the NY Fed, Bill Dudley, was talking about the markets the other day, and he said something that just about made me fall out of my chair! He mumbled something about “not paying attention to the bond market”… Wait! What? Are you kidding me? The bond market just keeps telling everyone that will pay attention that things aren’t great, and that rates shouldn’t go higher right now, but the man that is on the Fed’s Open Market Committee, which sets the Fed Funds rate, and dishes out monetary policy, says he isn’t paying attention to the bond market… Well, shut my mouth! OK, Chuck, stop right there! You don’t want to carry this out any further, or the men in black suits, white shirts, black ties, and sunglasses will be showing up at the door, “requesting” that I go for a ride…

I’ll just tell them the great Mogambo Guru had me say those thing! HAHAHAHAHA!

To recap…  The currencies got of the porch to chase the dollar down the street yesterday, and that carried through overnight and into this morning…  U.S. data printed very weak yesterday, with Durable Goods Orders at -1.1%!  That got the dollar on the selling blocks, and then sour sentiment toward the dollar took over from there!

For What It’s Worth… I thought since we had a very negative print of economic data yesterday, that I would feature this article that talks about why Americans accept mediocre performance in the economy…  You can find the article here:

Or, here’s your snippet: “Why the divergence between the “soft” numbers of the confidence surveys, and the “hard” numbers of the real economy?  One possibility is that this is just a momentary spot of economic weakness, and the numbers that measure sentiment point to better days ahead? But survey numbers have been rosy for one-half year now, so if they were doing their job of forecasting the real economy, it seems that the good times that they forecast would be showing up in the numbers by now.”

Chuck again… Yes, Retail Sales, Durables, Capital Goods, car sales, etc. just seem to be falling month after month…

Currencies today 6/27/17… American Style: A$ .7604, kiwi .7301, C$ .7560, euro 1.1250, sterling 1.2749, Swiss $ .9673, … European Style: rand 12.8847, krone 8.4680, SEK 8.6936, forint 274.88, zloty 3.7463, koruna 23.3555, RUB 59.09, yen 111.77, sing 1.3865, HKD 7.8006, INR 64.48, China 6.8315, peso 17.89, BRL 3.3232, Dollar Index 96.99, Oil $48.83, 10-year 2.16%, Silver $16.72, Platinum $921.95, Palladium $871.00, and Gold… $1,252.00

That’s it for today…  A little later than usual today, but no biggie… I had a great time at the ballgame yesterday. The rain stopped, and even though the sun never appeared during the game, the temps were great! And the Cardinals won! Old colleague, and friend, Ty Keough, was at the game and came over to where I was sitting to say hi… I need some coffee, so I’m going to tie this up and get it out, and head for a cup o’ Joe! Billy Joel takes us the finish line today with his song: Scenes From an Italian Restaurant… I hope you have a Tom Terrific Tuesday… And Be Good To Yourself!

Chuck Butler



Data Returns, But Will It Be Weak or Strong?

Good day… And a Marvelous Monday to you! What an absolute, no questions about it, beautiful weekend here in St. Louis, weather-wise, that is, this past weekend. OMG! Beautiful blue umbrella skies, warm but not hot temps, and a breeze from the South…  When I was a young man, and we would have days like this, my dad would say to me… “Chuck, they don’t have days like this in Russia”…  I kept thinking about my dad this weekend… Elton John greets me this morning with his song: Levon..
Well, as we start our week, the last week of June, and thinking about that, can you believe the year is half-over? Where does the time go? Oh well, as we start our week, the currencies are drifting with no real direction. The economic data returns to the U.S. this week, and I think that’s what’s holding up the currencies from any movement early this morning.  No one wants to make a call on the data prints for this week…  But I will!  Let’s see, first of all, I need to pick out the “real economic data”…  That would include: Durable and Capital Goods Orders that print today, and will be negative, I’m sure. the Case/Shiller Home Price Index tomorrow, the Advance Trade Goods on Wednesday, and we finish the week with two of my fave prints: Personal Income and Spending… And I don’t see any of those giving any strength to the dollar…
Now, there are more data prints that will show their colors this week, but, they are of the variety that  don’t really mean that much, as far as I’m concerned! Like Consumer Sentiment. As I’ve said before, until they call me and ask me my opinion, I’m not paying attention to the print! HA!
The euro continues to knock on the door of 1.12, but unlike the Paul McCartney song, no one is  getting up to answer the door! I worry about currencies that can’t seem to get past a figure. As I’ve told you for years now, dear reader, traders are fickle, and if they’ve attempted to move a currency past a figure a few times, and fail, they’ll just give up and move onto to something else… But, like my new Thursday article for the Dow Theory Letters readers, I’m making a bold call for the return of the euro…   There are other currencies to get excited about, but when you’re talking about the offset currency to the dollar, you’re talking about the currency that will see dollar weakness first, and foremost…
And that brings me to this quiz for you… Which currency do you believe is the best performing currency so far this year? It’s probably not the one your thinking of, unless of course you’re thinking of the Mexican peso… In January this year, the peso was trading with a 22 handle… Today, it is around 18… And the IM currency positions report last week showed the peso with the highest level of long positions of any currency, including the dollar! A couple of months ago, my old colleague, Chris Gaffney, sent me a note and said, “X) is calling for the peso to be the best currency this year”… And I said “hogwash”! How could that be? The Trump administration was talking about redoing the NAFTA and building a wall, and making the Mexicans pay for it… And besides, as I pointed out at the time, the peso still wasn’t paying a “risk premium”… Of course, saying that it’s the best performing currency this year to date, is a little misleading, in that, just a year ago, the peso was trading with a 15 handle… So, while it has recovered from the depths of a 22 handle, to 18, it still has a ways to go to even get back to even Steven with last year’s level!
And here’s the thing that scares me about the peso’s level and apparent popularity right now… It’s an overcrowded trade, and any sign that the Fed is going to continue their rate hikes, will mostly likely cause this overcrowding to disperse… And when one sell begets another, then they become an avalanche of sells… So, I guess, what I’m trying to say here is to be careful, because there are just too many wolves at the door of the peso right now…
The Aussie dollar (A$) and New Zealand dollar/ kiwi, continue to inch higher, as if they are sneaking around in the dark so nobody notices… Last week, these two currencies had to weather the storms of a Central Bank meeting in New Zealand, and the meeting minutes from the last Central Bank meeting in Australia. Having weathered the storm nicely, it’s time for these two to get going! Come on! I know you can do it!
Saturday, I received a Daily Reckoning ( and in it was an editorial piece from Charles Hugh Smith, where he talked about how all the government “fixes” of the past eight years have produced a fragile system ready to crack. Boy was I ready to read that! Because, as I’ve told you for years now, all those crazy ideas to “fix’ the economy were not working, and they wouldn’t work, and they won’t work! There’s just too much debt, for anything to work, and still we continue to add to the debt! There’s an old saying that when you find yourself digging yourself a hole, stop digging! But not the U.S. we just keep on digging, and deficit spending! Oh, and Charles Hugh Smith! Here’s a short snippet of what he had to say, but I truly think you should hit the link above and go read his whole article, you’ll think… Wait! Is this Chuck writing?
“As I explain in my book Why Our Status Quo Failed and Is Beyond Reform, all these fake-reforms only increase the systemic fragility by weakening all the dynamics that generate adaptability, accountability, feedback, transparency, etc.
The status quo is now like a wafer-thin sheet of ice over a deep lake of killing-cold water. To the naive and inexperienced, the ice looks solid; they believe the tall tales of “recovery,” growth,” “wealth” and solvency.
It’s all phony public relations. As a strange as it may sound, PR doesn’t make thin ice thick enough to stand on.
All the “fixes” have fatally weakened the real economy, and created a dangerous illusion of “wealth,” “growth” and solvency.
Soaring debt and declining earnings = brittle thin ice.” – Charles Hugh Smith
OK…Well, Gold got to have another day in the sunlight on Friday, closing up $6.50 on the day to $1,256.60… Gold WAS higher during the day, but not allowed to end higher… UGH! But, it had gained nearly $14 in the last 3 trading days of the week… A good start for a Gold run that I see coming…  Ahem, Chuck… you said that, and you need to go look at the early morning trading, because Gold is down $14 in the early morning trading!  UGH!  Oh, well, a drop like that just begs for investors to buy at cheaper prices, eh?
Hey! Did you see the latest Gold accumulation numbers from Russia? Hold onto your seats, because this will blow you away… Russia is still gobbling up all the gold it can get its hands on. According to Reuters, Russia’s central bank posted an increase in gold reserves in May—the fifth consecutive month of gains. Russia’s gold reserves rose to 54.9 million troy ounces by early June from 54.2 million ounces as of May 1.
For those of you keeping score at home… there are 35,273.96 ounces of Gold in a Tonne.. So, 54.9 Million divided by 35,273.96 give us… drum roll please.. $1,556.40 tonnes of Gold… That’s more than the World Gold Council reports that China has, which isn’t nearly correct, but for illustration purposes, I wanted to show you just how much Gold Russia has accumulated in the past few years…
Why is Russia accumulating all this Gold? A Couple of reasons… One, the Central Bank of Russia (CBR) Gov. Elvira Nabiullina, made the decision a few years ago that Russia would stop accumulating foreign reserves in other countries currencies and their own, and instead buy Gold… What a Goldmine (pun intended) that was for the CBR, given Gold’s rise VS all currencies in the past few years.. And Second, Russia along with China, have made numerous statements about how they want the dollar standard to end… Well, if that were to happen, then those with Gold get to make the new rules, and guess who wants a seat at the table? That’s right… Russia!
After awaking from my Infusion Confusion fog on Friday, I began reading emails, and one that I received was from an analyst and he was highlighting the impressive performance of Palladium.. Let’s listen in to some of these facts that he spewed out.. “Palladium is probably the stealthiest bull market in the world. Its performance since 2009 beats every other metal out there…
Since January 2009, it outperformed gold by 300%. It outperformed silver by 300%. It outperformed platinum by over 350%.”
Now that’s all grand, and in fact a couple of months ago I told you about a mining company president that said that Palladium would eventually trade higher than Platinum.. Right now, Platinum is $930-ish, and Palladium is $892-ish, so not that far from overtaking its older sister..
But here’s where I think we might see some problems going forward… You see, the main driver behind Palladium’s great run since 2009 is the fact that carmakers were building cars by the shipload every year, here, Canada, Mexico and China… But, what have I been telling you for months now about car sales? They are falling… 5 consecutive months of reports that show car sales falling from the previous month. I think that car sales are in real trouble, folks… And therefore that COULD be a fly in Palladium’s ointment… If car sales keep dropping, and I think they will, then we could very well see the carmakers slow down their production of new cars, which would mean less Palladium needed… We’ve already seen Ford shut down some plants temporarily, and the other day GM announced some plant closings… So, it’s already beginning to happen…
The rabbit that Palladium has up its sleeve though, is supplies are dwindling… In Africa, the second largest Palladium producer, their mines are very old, and it’s difficult to get the Palladium out of them at this point. Russia is the number one Palladium producer, and that would just leave them as the main supplier, and that could have all kinds of ramifications should this saber rattling going on between the U.S. and Russia escalate.
So… I guess all I’m saying is that Palladium looks good, but it does have this nasty looking hickey, that was put there by the falling car sales, so be careful is what I’m saying, don’t think just because someone shows you some gaudy returns from 2009 to today, that those will continue… They might.. and they might not!
The price of Oil rebounded a bit since last Friday morning, when it was being trading in the $42 handle. This morning, it has a $43 handle, and the Petrol Currencies of rubles, real, loonie, and others all breathe a sigh of relief…
The U.S. Data Cupboard gets to show off all the restocking that took place last week, with a print of Durable and Capital Goods Orders today… As I said above, I fully expect them to be negative, keeping pace with the other weakening economic data prints that we’ve seen for the last couple of months now… But not to worry… The Fed says that these are only “transitory”… Boy, do I feel better about all these weak data prints now…  NOT!
To recap… The early morning trading has Gold down $14, but other than that, the currencies are drifting about this morning, waiting to see what traders think of the data prints that will come in by the truck load this week. Everybody likes the peso these days, but when “everybody likes something” it becomes overcrowded, and the reversal can be a killer!
For What It’s Worth… I thought we could have some fun with today’s FWIW section, and talk about work related stress, and how it affects your body… In my last Pfennig from the old EverBank, I talked about how I lived with so much stress during the growing years of building a World Class business, and how I thought it might have had something to do with me getting cancer. Well, on Saturday, I was doing some reading, and came across this article that talks about how work related stress can affect your sleeping habits, your junk food cravings and so on, and so I thought… Let’s feature this on Monday… and so, here’s the link to the whole article:
Or, here’s your snippet: “Yes, workplace stress is doing a number on your weight. But a good night’s sleep can get you back on track.
A new Michigan State University study published in the Journal of Applied Psychology this week is one of the first to connect the dots between job stress, junk food and catching Zs.
Researchers followed 235 workers at two business: a Chinese information technology company where overworked employees felt there was “never enough time in the day,” as well as a call center where staffers were stressed from dealing with “rude and demanding” customers.
The study linked stress at both workplaces with the employees experiencing a bad mood on the job, which in turn shaped unhealthy eating once they were off the clock.
“We found that employees who have a stressful workday tend to bring their negative feelings from the workplace to the dinner table, as manifested in eating more than usual and opting for more junk food instead of healthy food,” wrote study co-author Chu-Hsiang “Daisy” Chang, an associate professor of psychology.”
Chuck again…. And there’s so much more, so if you’re interested in this stress related stuff, I suggest you check out the link and find out more!
Currencies today… 6/26/17… American Style: A$ .7577, kiwi .7270, C$ .7556, euro 1.1186, sterling 1.2732, Swiss .9737, … European Style: rand 12.8755, krone 8.4647, SEK 8.7246, forint 276.33, zloty 3.7644, koruna 23.4407, RUB 59.41, yen 111.65, sing 1.3877, HKD 7.7984, INR 64.42, China 6.8330, peso 17.93, BRL 3.3316, Dollar Index 97.40, Oil $43.33, 10-year 2.16%, Silver $16.50, Platinum $920.83, Palladium $857.66, and Gold… $1,242.20
That’s it for today… Man, I had a lot on my mind this morning, didn’t I? The Pfennig is quite long today, but I had to make up for Friday’s Short-n-sweet effort! HA! My beloved, bumbling, Cardinals finally won a game last night, but with it being one of those stupid Sunday Night games, I didn’t see the ending… UGH! Makeup day game today, and I’m going! YAHOO! Love day baseball! A great St. Louis band, Mama’s Pride, takes us to the finish line today with their song: Blue Mist… And with that, I’ll get out of your hair for today… I hope you have a Marvelous Monday, and Be Good To Yourself!
Chuck Butler


Infusion Confusion Always Wins!

Good day… And a Happy Friday to one and all! I’ve got infusion confusion this morning, and can’t really focus, so this is going to be short-n-sweet today, I promise! I’ve had my CPAP machine for a month now, and while most mornings I wake up feeling refreshed and ready to go, that’s not happening this morning… So, infusions beat CPAP… Good to know! Don Henley greets me this morning with his song: End of The Innocence…

Well, to start the day, we don’t have any major news… No Central Bank meetings, no BIG announcement from China, no real economic data. I could discuss the new Health Bill, but why? It’s going nowhere folks… The dollar seems to be losing its grip again, as the currencies inch higher again this morning. The Big Dog euro seems to be stuck in the mud, as it attempted to get off the porch and run after the dollar, but the other little dog currencies have gotten off the porch, but seem to be sniffing around a bit before they take off after the dollar.

The New Zealand dollar / kiwi is the best performer overnight, and even that move isn’t anything to get real excited about! The price of Oil rebounded a bit, but not much, so there’s no reason to rush out and fill up the gas tank before it explodes higher! Not that I think it’s going to explode higher. The U.S. shale producers are really sticking it the OPEC countries.

The price of Oil has been a real problem for all the countries outside of the U.S. The problems are two-fold… One problem comes from countries that don’t produce Oil, and have to import it… As the price of Oil rises, their inflation forecasts grow, they hike rates, wring their hands with worry about inflation. As the price of Oil retreats, the country is left with no inflation worries and higher interest rates than needed, thus putting the brakes on their economy…  (see India for a good example of this scenario!)

And for the countries that produce Oil, their problems are really illustrated right here in the U.S.  Oil production goes down, the price of Oil rebounds, the Oil producers ramp up operations and begin to pump Oil by the truck loads, which leads to too much production, and supplies, and that causes the price of Oil to fall again, and now the producers have ramped up operations, taken on new debt for equipment, etc.  And the Merry-Go-Round just keeps going around and around and around…

Oh, boy, I’m doing it again! Promising a short-n-sweet Pfennig and then I go off on some tangent that fires up the word count! UGH!  Well, what else did you expect from me? My fat fingers get going on the keyboard, and the next thing I know I’m finished, and the Pfennig is as long as usual! UGH!

Gold saw another day of light from the tunnel yesterday, but once again before it could get its legs underneath it to run, the Gold short paper traders came forth and stabbed it with their steely knives, but they just can’t kill the beast! (Hotel California), and Gold gained $3.70 on the day…

The early morning trading has Gold up $8 today, but I just can’t get myself to get too excited about the early morning gains, for they come about before “da Boyz” (as Ed Steer calls them) arrive at their desks..

I’ve read a few reports this week from Gold analysts, Gold mining Co. Presidents, and so on, about how they feel that the manipulation of the Gold price is about to end… The reports don’t really ever get into why these people think that, but Hey! Who am I to question?  This is where I would pull out an old-time phrase that’s not used much any longer, and that is… Should the manipulation stop..  “I won’t look a gift-horse in the mouth”… That is an old one, Chuck! Where did you pull that one from? Ahhh grasshoppers, I pulled that from the archives of my memory. I can hear my grandma saying that to me…  And for those youngsters reading this letter the saying simply means, “when receiving a gift be grateful for what it is; don’t imply you wished for more by assessing its value.” You don’t really need to have horse! HA!

The Canadian dollar / loonie is challenging kiwi as the best overnight performer. Earlier this week, I told about how loonie traders were scratching their collective heads attempting to figure out how the loonie was pushing the currency appreciation envelope day after day, when the price of Oil was dropping, and the Bank of Canada (BOC) was sitting on their hands as the housing bubbles in Toronto and Vancouver continue to fill with air…

But then the loonie got caught up in all the Petrol Currency selling, as the price of Oil dropped into the $42 handle…  Well, like I’ve told you dear reader for a very long time now, “Traders are Fickle”… And they’ve gone back to pushing the loonie higher… Hey! That’s alright by me! Don’t let me get in the way of pushing the loonie higher! I’m just attempting to explain its strength to readers!

I had mentioned earlier in the week that the Reserve Bank of Australia (RBA) would print their last meeting’s minutes this week, and then completely forgot about them, until now! I guess I forgot about them because they didn’t contain any earth shattering comments, and they sure didn’t give the markets anything to trade from…  Here’s a sample of what they were talking about…

“Members noted that the broad-based pick-up in the world economy was continuing. Labor markets had tightened further in many countries and this was expected to lead to a pick-up in wages and prices over time. Headline inflation rates in most countries had moved higher over the past year, partly reflecting higher commodity prices. Nonetheless, core inflation had remained low.”  And as we all know, they left rates unchanged…  And, that lack of optimism by the RBA hurt the Aussie dollar (A$) for a day but the A$ has recovered that lost ground, and now sets its sights on 76-cents!

The U.S. Data Cupboard today is till restocking, but will have New Home Sales, and the Markit print of PMI (manufacturing index), which I will remind you is NOT the national ISM manufacturing index. Existing Home Sales were better than expected when they printed earlier in the week, and so I expect New Home Sales to be better than expected too… The Fed hiked rates last week, but let me point out that our internal rate is still very low at 1.25%, and the all-important 10-year yield that is used to price mortgage rates is still below 2.20%!!!! So, why wouldn’t home sales be good?

To recap… It’s a infusion confusion Friday for Chuck, which is good because there was not a lot going on overnight and this morning in the currencies, metals, bonds, commodities, economies and dolts! I was watching the news last night, and couldn’t believe they had not one mention of China’s A shares being included in the MSCI that I talked about yesterday! UGH!  Oh well, Gold was up another $3.70 and the price of Oil rose about 60-cents…

For What It’s Worth…  It brings me great delight to be able to direct you to this website today, dear reader…   I would like for you to read an article by my good friend, who is also known as the Retirementor, Dennis Miller… He sent me a note this week, when I went on and on about debt, and said, “wait till you see my letter this week, great minds must think alike”…  So, anyway, it’s titled: Don’t Get Caught In The Debt Trap!  and you can read it all here:

Or, here’s your snippet… “Hardly a day goes by without an article blaring about record levels of debt and warning of a collapse. Irresponsible borrowing can adversely affect everyone, including those who lived within their means.

Reuters reports, “Americans’ debt back at record high after nearly a decade: “Americans’ debt level reached a record high this year, surpassing the peak touched just as the worst of the recession was taking hold in 2008, …households …now lean …more on auto and student loans.”

Bloomberg weighs in on student loans, “Student debt in America has hit a new record”: “Total U.S. student debt hit a record $1.31 trillion last year, the 18th consecutive year Americans’ education debt rose, according to the Federal Reserve Bank of New York.”

Chuck Again… Dennis does a great job of being fair and balanced on this, and I sent him a note saying that, his quote from Noah Smith, reminded me of my note about the Commodity Analyst yesterday… One day, they’ll rue the day they said those things..

Currencies today 6/23/17… American Style: A$ .7565, kiwi .7280, C$ .7560, euro 1.1168, sterling 1.2737, Swiss $.9712, … European Style: rand 12.93, krone 8.4752, SEK 8.7560, HUF 276.61, zloty 3.7898, koruna 23.5227, RUB 59.97, yen 111.20, sing 1.3866, HKD 7.7993, INR 64.48, China 6.8321, peso 18.05, BRL 3.3340, Dollar Index 97.40, Oil $42.81, 10-year 2.16%, Silver $16.80, Platinum $931.73, Palladium $891.75, and Gold… $1,258.00

That’s it for today… no extra innings, no win for my beloved Cardinals yesterday… UGH! It’s feast or famine with this team, and that’s not the Cardinals I’m used to watching… Well, they took a new measurement of the tumor in my mouth yesterday, and compared it to the measurement taken right before I began my infusions again, and the tumor is shrinking again! That’s a good thing, even though I feel like death warmed over this morning! But that won’t last long, and I’ll be back to myself by noon! I’ll have to wait to do my crossword puzzles until then, because I couldn’t concentrate on them now even if I wanted to! John Mellencamp takes us to the finish line today with his song: The Authority Song…  I fight authority and authority always wins… (story of my life!)  And with that, it’s time to get off the bus this week, and send you to the corner of a Fantastico Friday and a Wonderful Weekend!  And Please… Be Good To Yourself!


Chuck Butler

China’s A Shares Get Added To The MSCI!

Good day… And a Tub Thumpin’ Thursday to you! I’ve done my share of Tub Thumpin’ the last two nights, and with today being an infusion day, I’ll have to leave all the Tub Thumpin’ to all of you! Please Tub Thump responsibly! HA! I’m greeted this morning by Chicago, and their song: Old Days… I was just doing some writing yesterday for an article, and talked about the old days of arriving at a currency’s value… Pretty interesting stuff, I must say!

The dollar strength that was being displayed all over the globe yesterday, has faded, but there’s really been no turn-around, just consolidation of the dollar moves on Tuesday and yesterday morning. The Gold price finally saw some light of day, but the price of Oil slipped further, falling to the $42 handle in the past 24 hours…

Let’s start with Gold today, you know, mix it up a bit, and see where it takes us, eh? Well… Gold didn’t do much again yesterday… Closing up only $3.70… I said yesterday morning when it was up nearly $5 in the early morning trading that it would be interesting to see what happened when the short Gold paper traders arrived… Well it didn’t take long to figure out what they thought! And the short Gold paper traders saw to it that Gold’s mini-rally didn’t go any further…

Then there was this article that showed up on the site, from Simona Gambarini — with the job title of “commodity economist,” reports that “gold’s luck has run out” with the 25-basis-point nudge in rates by the Fed. She further explains that her predicted two more rate hikes will cause even more money to leave the gold market.

I about fell out of my chair folks… As the U.S. economist, Dave Kranzler, responds to the GATA folks, “Hmmm. … “If Gambarini were a true economist, she would have conducted enough research of interest rates to know that every cycle in which the Fed raises the Fed Funds rate is accompanied by a rise in the price of gold. This is because the market perceives the Fed to be “behind the curve” on rising inflation, something to which several Fed heads have alluded.”

I’ll also throw in my two-cents, and say HOGWASH to those two more rate hikes! I’ve said it before and I’ll say it again, by the end of summer the Fed will be putting a halt on their plans to hike rates, and by Rocktober, they will be beginning their reversal that will eventually lead to QE4, and maybe even negative rates! Let’s see what Ms. Gambarini says then about Gold!

Whew! give me a minute while I climb down from the soapbox…  OK, I’m back on terra firma now, and ready to talk about something else!  The BIG NEWS yesterday involved China, so let’s talk about that for a minute.. I told you a couple of weeks ago that the MSCI (Morgan Stanley Corp Index) International Index was contemplating adding Chinese A share stocks to this index, and I said that they probably would add them, after telling the Chinese no, the previous 3 times they were up for adoption.

This deal comes with some parameters, as only 222 of Big Cap stocks were admitted, and since the Chinese like to “suspend stocks”, any stocks that had been suspended in the past 50 days were excluded. There was no discussion as to how the index would treat the 10% rule that the Chinese have on their stocks… No stock that gains or loses 10% in one day is allowed to trade further that day.  But here’s the real benefit for China…

You see, their stocks and currency will get a wider distribution, which has been a goal of the Chinese to gain a wider distribution of their currency for over a decade now. China has a lot of debt problems that they’ve created in creating an infrastructure that’s second to none. Have you seen the new Beijing Airport? They also keep their citizens happy by spending lots of money… And they have something called WMP’s, which is nothing more than a Ponzi scheme, but… China always seems to be able to weather their storms, and while a collapse of the WMP’s could bring on major damage to the economy and China’s reserves, the Gov’t continues to make inroads to having a free floating currency, that will most likely be backed by some percentage of Gold…

Earlier this morning, the Norges Bank met (Norway’s Central Bank) and like I said on Tuesday when I went through the events of the week, the Norges Bank left rates unchanged…  But also like I said on Tuesday, Norway has seemed to have weathered the storm from the drop in the price of Oil, which they had leaned on very heavily through the years.

Here’s a comment from the Norges Bank this morning after the announcement of no rate change. “Capacity utilization in the Norwegian economy appears to be higher than envisaged earlier. Inflation is lower than expected and may continue to drift down in the months ahead, but increased activity and receding unemployment suggest that inflation will pick up. Inflation expectations appear to be firmly anchored. Low house price inflation will curb debt accumulation, but it will take time for household vulnerabilities to recede.”

“The Executive Board’s current assessment of the outlook and the balance of risks suggests that the key policy rate will remain at today’s level in the period ahead,” says Governor Øystein Olsen.

The Reserve Bank of New Zealand (RBNZ) also left their Official Cash Rate (OCR) unchanged at 1.75% and in out going RBNZ Gov. Wheeler’s dwindling opportunities to diss kiwi strength, chose to just briefly mention that a weaker kiwi would help rebalance the growth outlook towards the tradables sector. Hmmm… what’s gotten into Wheeler? Has he gotten soft on kiwi strength? I really don’t know, but this is just not like him. Maybe he sees the light at the end of the tunnel, which will come when he steps down from his post in September…  Not that I want him to be himself with regards to dissing kiwi strength, I’m just being a Curious George here…

Kiwi did gain some ground after the OCR announcement, and no major dissing of the currency… So, kiwi has that going for it today!

Next week’s article for the Dow Theory Letters is going to be about what I talked about some yesterday, and that will be all about the euro… I’m putting the finishing touches on it today… is the website where these articles will print on Thursdays, but you have to pay for a subscription to the site, which is very good, with different writers each day, and ending the week with the Aden Sisters, so if it floats your boat, set sail my friends!

The U.S. Data Cupboard is still being restocked, but we will see the color of the latest, Leading Indicators Index today… This report and Capacity Utilization are about the only two forward looking pieces of economic data, so I’ll be watching for the data print today… On Tuesday, the U.S. Current Account Deficit for the 1st QTR printed, and printed worse than expected… The forecasters had the deficit around $112 Billion, but the actual print was $117 Billion!!!!!!   UGH, when will the deficit spending every stop? When the wall of debt comes crashing down, that’s when!

To recap… The dollar strength of Tuesday through Wednesday morning faded into consolidation yesterday, and the currencies and metals have won a little of the lost ground back… Both the Norges Bank and the RBNZ left rates unchanged and really didn’t have much to say about their no rate moves either. Strange that RBNZ Gov. Wheeler wasn’t out dissing kiwi strength! Gold finally saw some light of day yesterday, but its gain was kept to just $3.70… And the price of Oil slipped further falling to the $42 handle…

For what It’s Worth… In 2003, I remember sitting in our convertible mustang, as the three Amigos, Chuck, Duane and Rick were setting out to find Roger Dean Stadium on our first trip to Spring Training together. And Duane asked me what was on my mind regarding the U.S. economy. (now this was long before they realized they should never ask me stuff like that!) And I responded that I had been reading and writing about something that really troubled me, and that was the underfunding that was going on with Pensions.. That’s right I said that in 2003… And I’ve been writing about it since, sounding like a broken record, I guess, but still it goes on and on, and keeps getting larger and larger… Look at Illinois, they’ve now been ordered by a Court to pay bills, but they have no money, and their State Pension is grossly underfunded!

Well, any-old-way you look at it, Chuck was out there seeing stuff that was going to be a problem, long before anyone else did, and that brings me to today’s FWIW… It’s an article on Bloomberg, that talks about GE’s pension shortfall, and when I say shortfall, I’m being kind to GE! You can find the article here:

Or, here’s your snippet: “It’s a problem that Jeffrey Immelt largely ignored as he tried to appease General Electric Co.’s most vocal shareholders.

But it might end up being one of the costliest for John Flannery, GE’s newly anointed CEO, to fix.

At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz.

Part of it has to do with the paltry returns that have plagued pensions across corporate America as ultralow interest rates prevailed in the aftermath of the financial crisis. But perhaps more importantly, GE’s dilemma underscores deeper concerns about modern capitalism’s all-consuming focus on immediate results, which some suggest is short-sighted and could ultimately leave everyone — including shareholders themselves — worse off.”

Chuck again.. well, there’s no reason for me to pile on here… You know when I played football, I was usually the guy that made the first hit and then as we fell to the ground, I got piled on. I always hated that feeling of being at the bottom of a pie of people, especially other football players! Yes, I was what my dad would call, a “pretty good country athlete”, but that was in a different life, for if you’ve seen me in my adult life, I no more look like any kind of athlete! HA! (maybe a Sumo wrestler! HA)

Currencies today 6/22/17… American Style: A$ .7540, kiwi .7253, C$ .7510, euro 1.1165, sterling 1.2665, Swiss $ .9736, … European Style: rand 13.0052, krone 8.4890, SEK 8.7398, HUF 276.65, zloty 3.7957, koruna 23.5154, RUB 59.82, yen 111.33, sing 1.39, HKD 7.8003, INR 64.56, China 6.8287, peso 18.17, BRL 3.3268, Dollar Index 97.55, Oil $42.66, 10-year 2.16%, Silver $16.59, Platinum $927.73, Palladium $888.07, and Gold… $1,251.60

That’s it for today… Running a bit later this morning, but no biggie! A great day for me yesterday, I was sent the subscriber list for the Pfennig, which means, we can load it up now and maybe by tomorrow, but probably Monday the emailed Pfennig will be going out once again! YAHOO! Things are looking up once again for yours truly… I do have to get a chemo infusion today though, so I’ll deal with that later this morning, and hopefully it doesn’t rain on my parade! Another extra inning win for my beloved Cardinals last night. But like I told my friend Dennis Miller, winning extra inning games against the worse team in baseball, isn’t what I would call “good wins”… But a win is a win, right?  Ok.. time to get going. The iPod has reshuffled and we’re being taken to the finish line today by Billy Squier and his song: My Kind Of Lover…  I hope you have a Tub Thumpin’ Thursday, and Be Good To Yourself!


Chuck Butler