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… http://theeconomiccollapseblog.com/archives/the-world-is-now-217000000000000-in-debt-and-the-global-elite-like-it-that-way

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!


a) The Daily Pfennig is no longer published by EverBank and it is now published by Aden Research Group. Please review Aden Research Group’s privacy policy and subscription terms carefully to be sure you agree with them – a link to those documents is [https://adenforecast.com/terms-and-coditions-of-service/ If you do not accept these terms, including our privacy policy, or if you wish to discontinue your subscription to the Daily Pfennig, please click chuck.butler@dailypfennig.com to opt out for future mailings of the Daily Pfennig from us.”


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 (www.dowtheoryletters.com) 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 (www.dailypfennig.com) 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: https://www.bloomberg.com/news/articles/2017-06-29/goldman-s-commodity-analysts-ask-how-did-we-get-it-so-wrong

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!


The Daily Pfennig is no longer published by EverBank and it is now published by Aden Research Group. Please review Aden Research Group’s privacy policy and subscription terms carefully to be sure you agree with them – a link to those documents is [https://adenforecast.com/terms-and-coditions-of-service/ If you do not accept these terms, including our privacy policy, or if you wish to discontinue your subscription to the Daily Pfennig, please click chuck.butler@dailypfennig.com to opt out for future mailings of the Daily Pfennig from us.”



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 www.Dowtheoryletters.com 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 www.dailypfennig.com 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 (www.agorafinancial.com) 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 zerohedge.com:

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: https://needtoknow.news/2017/06/seattles-15-minimum-wage-law-caused-workers-wages-drop/

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 www.dailypfennig.com… 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… http://www.marketwatch.com/story/opec-have-no-fear-the-us-oil-shale-output-crash-is-here-2017-06-27?link=MW_popular

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… http://www.cnbc.com/2017/06/27/yellen-banks-very-much-stronger-another-financial-crisis-not-likely-in-our-lifetime.html

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:https://www.bloomberg.com/view/articles/2017-06-26/why-americans-feel-so-good-about-a-mediocre-economy?utm_medium=email&utm_source=newsletter&utm_term=170626&utm_campaign=sharetheview

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 (www.dailyreckoning.com) 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: https://moneyish.com/upgrade/how-to-break-the-job-stress-junk-food-cycle/?mod=e2fb&link=sfmw_tw
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: http://milleronthemoney.com/dont-get-caught-debt-trap/

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 Kitco.com 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…  www.dowtheoryletters.com 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: https://www.bloomberg.com/news/articles/2017-06-16/ge-s-31-billion-hangover-immelt-leaves-behind-big-unfunded-tab?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+17+June+2017

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


AKiss of Death, Or Just A Good Call?

Good Day… And a Wonderful Wednesday to you! Another beautiful day here in St. Louis yesterday. As I’ve always said, “if this keeps up, we won’t be able to afford to live here!” But you won’t ever hear me complain about Chamber of Commerce weather! I’ve whined enough over the years about cold weather, and how I had to go where it’s warm, so you won’t catch me changing horses in the middle of the stream! Steely Dan greets me this morning with their song: Reeling In The Years… (I do love me some Steely Dan!)

Well, Monday’s non-movement in most investment assets, was replaced by some currency volatility, and dollar strength. This dollar strength has stretched its tentacle across the globe, and there doesn’t seem to be one currency that was able to escape the dollar’s moves. The worst performing asset yesterday was Oil, which lost the $44 handle, and is sinking quickly toward $42, as it trades this morning at $43.34.

This awful performance in Oil had really set the Petrol Currencies back on their heels, and this time even the head scratching loonie has seen some value taken from it. While the price of Oil was rebounding earlier this year, the lead dog of the Petrol Currencies, the Russian ruble, would be out front ratcheting up gains VS the dollar, hand over fist… But now that the bloom is off the rose of the Oil price, the ruble is getting hammered daily…

And don’t think for a minute that the ruble’s current hammering isn’t also tied to the aggressive stance against the U.S’s shooting down of a Syrian plane earlier this week. I know, it’s just words between Russia and the U.S. but as I explained yesterday, this is no time to be ticking off Russia…  We’re so stretched and bogged down in the Middle East, and all that is worrying the bejeebers out of me!

The euro hasn’t really lost much ground to the dollar as I look at the currency screen this morning. The euro is still sniffing around the 1.1150 figure this morning, which to me, is pretty impressive, given the dollar strength being displayed around the globe!  And that brings me to the soapbox, where I’m going to step up and make a call… Are you ready for this? OK, here goes!

First off, I sure hope this doesn’t turn out to be the Old Chuck’s Kiss of Death… But I’m so confident about this thought that it might be able to overcome that Kiss of Death, that usually comes along once I talk glowingly about something! OK, enough beating around the bush, for that’s just not my bag, baby!

tap, tap, tap, is the microphone on? Testing, one, two, three… Can you hear me in the back? Good! OK, Ahem, here goes.. I believe that the strong dollar trend is coming to an end, and the main beneficiary of that will be the euro.. More and more I read and see that traders are growing more and more concerned about the weakening economy here in the U.S. and the fact that the Fed keeps hiking rates into that weakening.

While in the Eurozone, we’re seeing the European Central Bank beginning to warm up to removing their accommodating monetary policy, as the Eurozone economy spools up and inflation returns to the region’s economies. I read this and it is so good, that I have to use it now… Right now the euro is like the Jack-in-the-Box right before it starts to pop out…

Back in 2002, I wrote a white paper titled: 2003, The Year of the Euro… I’m thinking I need to pull that out and dust it off, and say that 2017-18 is going to be the New Year of the Euro! I know, I know, the Eurozone has its own set of problems, but you see sentiment really drives currencies these days, and the sentiment toward the dollar is eroding quickly, while the sentiment toward a recovery in the Eurozone seems to be “in vogue”… So, I’ve told you this before, but here goes… I learned early in my career that spans back to 1973 (I know I don’t look that old do I? HAHAHA!) and that is that “the markets are never wrong”…

What that means is of course they could be wrong, and I’ve pointed how wrong it was several times through the years, but weather its wrong or not, if the markets have an axe to grind on some asset, then don’t stand in their way. They may be wrong about it, but that doesn’t matter one iota, so don’t forget that!

Gold sure can’t get off the canvas, where it has been knocked down from a flurry of shots from the dollar, and the short Gold paper traders, of course! Yesterday, Gold tried to mount a rally, but was stopped short of the border, and ended the day with a $1 loss… No biggie, but a loss nonetheless, in a time period that just won’t let Gold loose…  I say that, but in the early morning trading today, Gold has mustered up a $4 gain, so we’ll have to wait-n-see if “da boyz” as Ed Steer calls them want to take their pound of flesh again today from Gold’s value…

In 2006, my friends, Addison Wiggin of Agora Financial, and Bill Bonner, the creator of the Agora Publishing Company, co-wrote a book titled: Empire of Debt… The Rise of an Epic Financial Crisis… In the book the two tell the history of many republics through history that turned into Empires and then crumbled because of a couple of things. Extending their armies too thin, and running up huge debts that had them find ways to deal with the debt, like debasing the money, and raising taxes, until the money could be debased any longer, nor could taxes be raised any higher, and the Empire crumbled… The two did this history lesson to compare the greatest empire in the world at the time, The Roman Empire, to the U.S. Empire… And yesterday, in Bill Bonner’s Diary, he compared the two again, but only this time he used a comparison of Trump and Julius Caesar… Boy, did this bring back memories of history classes, then reading the Empire of Debt, and then the follow-up The New Empire of Debt that came out in 2009…

I thought it would be fun to go through some of the things we worried about in 2006 with regards to debt…
In 1987 Consumer Credit (read debt) was $672.2 Billion.. in 2006 it was $2.1 Trillion, and in 2017 it is $2.8 Trillion
In 1987 Total Household Debt was $2.7 Trillion. In 2006 it was $$10.764 Trillion, and in 2017 it is $12.73 Trillion
In 1987 Domestic Business Debt was $1.9 Trillion. In 2006 It was $5.2 Trillion, and in 2017 it is $5.9 Trillion
And the kicker of things that I think foretell us a recession is near… the last time I was invited to speak at the Agora Financial Symposium in Vancouver, B.C. was 2015… And I brought this little ditty to the audience then… The total U.S. current Debt, which included: Gov’t, State, Business, and individual debt had crossed $60 Trillion for the first time! Well that was 2015, guess what that number is today? Well, if you said more than $67 Trillion, you would be the winner, winner, Chicken dinner!

All this debt is unsustainable, and while that’s quite evident, it’s not imminent, but… What if it was? What would you do? Well, I think that most likely you would scramble to find a reputable Gold dealer… But by then it will be too late, because of all the people that listened to people like me and told them that time to buy insurance is before the floods… I often use this saying.. That’s too late to remind yourself to drain the swamp when you’re up to your rear with alligators! Don’t wait for the alligators, folks… That’s all I’m saying…

Whew! my fat fingers were flying all over the keyboard, as the thoughts just kept coming into my head about the Empire of Debt.. And like I said above, the damage to the dollar from all this debt, might be evident, but it’s not imminent just yet… And that brings me to another thought… I’ve long said that “we’re turning Japanese”, following the Japanese down this deep, dark, dangerous (look at me being the poet! HA) road of debt accumulation. And it’s been pointed out to me that the yen hasn’t really suffered from all their debt..  Well, I guess that’s their opinion, because it’s in my mind that not that too long ago, the yen was trading about 80, and today it’s 111..  (it’s a European priced currency so the higher the number the less in value it returns in dollars, because it takes more of the currency to equal a dollar)

A couple of years ago, yen was 120-ish, and looking like it was going to 150, and I still think that’s where it belongs, given the fundamentals of the country, along with the demographics, and their inability to reform, but Japan still enjoys this “safe haven” status, which just boggles my mind to no end. Safe from what? over 3 decades of an economic funk and deflation? Oh, please sir, may I have another?  NOT!

So, I was really on my horse this morning about debt, Gold, the dollar, yen, and the euro, but those were the things on my mind today… So, guess who gets to share in my thoughts today? You dear reader! HA!

The HA! and HAHAHAHA! that I use in the Pfennig, I borrowed from my good friend, the Great Mogambo Guru (MGM)… He calls me a Junior Mogambo Ranger (JMR)… And quotes me from time to time… Many years ago, and I mean many years ago, when he first quoted me, he said that he didn’t know why he was quoting me, because I had never sent him any candy or flowers…  So, reading that, I found out his address and sent me a bouquet of flowers with a box of candy, as if we were long lost lovers! HA! And we’ve been friends since… I even carry around with me every day for luck, a Mogambo Guru minted Silver Coin, with his mug and his saying on the coin… “This Investing Stuff Is Easy… Wheeee!”

To recap, it was a good day for the dollar yesterday, as the no-movement Monday, turned into a terrible Tuesday for the currencies and the price of Oil, which continues to drive lower… Chuck gets up on the soapbox for the euro, and has a flashback to 2006 and reading the Empire of Debt… You’ll want to check out the debt numbers that Chuck throws out there today…

For What It’s Worth… Well, I spent some time on the price of Oil today, and so when I came across this article on Bloomberg, I thought it played nicely in the sandbox with what I had said, so here’s the article’s link where you can read it all:  https://www.bloomberg.com/news/articles/2017-06-19/oil-s-slide-stalls-as-investors-weigh-stockpiles-against-Libya

Or, here’s your snippet… “Shale producers risk drowning in their own surplus — again.

On Tuesday, oil slid into its first bear market in 10 months, falling 21 percent from its high for the year. The swoon dragged down driller shares amid concern that unceasing production from U.S. shale fields is overwhelming OPEC efforts to ease a global supply glut.

Explorers who came of age at a time when ever-increasing production was rewarded with ever-higher prices are now having a bit of a déjà vu from their fall from grace in 2014.

The S&P 500 Energy Index has lost 14 percent this year, while West Texas Intermediate crude, the U.S. benchmark, has fallen 19 percent. Buoyed by prices that hit $54.45 a barrel in February, U.S. explorers have boosted the number of rigs drilling for oil to the highest since mid-2015, and expanded their production to 9.33 million barrels a day.
“A lot of faith and hope and belief was put into” the deal by OPEC, Russia and other exporters to cut their production as a way to balance the market, said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. But “it’s proven ineffectual.”

Chuck again…  ramp up production, have a glut in supplies and watch the price tumble, then shut down production, and watch the price recover, then rinse and repeat the whole shebang over again… When will these guys ever learn?

Currencies today 6/21/17… American Style: A$.7570, kiwi .7241, C$ .7520, euro 1.1148, sterling 1.2626, Swiss $.9743, … European Style: rand 13.0269, krone 8.5434, SEK 8.7737, HUF 277.35, zloty 3.8042, koruna 23.5715, RUB 59.69, yen 111.15, sing 1.3898, HKD 7.80, INR 64.58, China 6.8272, peso 3.3274, peso 18.27, Dollar Index 97.66, Oil $43.34, 10-year 2.16%, Silver $16.45, Platinum $922.65, Palladium $873.91, and Gold $1,247.60

That’s it for today… Had a great night last night, as a few of my buddies stopped by to watch the baseball game with me outside, since it was such a beautiful night… And it ended up with a Cardinals extra inning win, so all-in-all a good night… I got the word yesterday, that the subscriber list is ready, which means it won’t be too much longer before I can get back to sending out the daily letter by email! YAHOO! But, I do like the set up with the website so far… But the emailed letter can reach so many more, that don’t want to have to bookmark a website and them remember to visit it each day! Boy, we sure have become spoiled haven’t we?  HA!  Elvis Presley takes us to the finish line today, and yes, I said Elvis! with his song: Can’t Help Falling In Love… Come on admit it, you slow danced with an old flame to this song at sometime!  And with that, it’s time to tell you that I hope you have a Wonderful Wednesday!  And don’t forget to be Good To Yourself!

Chuck Butler



Debt Goes On and On, Like The Energizer Bunny!

Good day… And a Tom Terrific Tuesday to you! That felt good just typing that phrase to begin our day here. I’m still as excited as a kid at Christmas that I get to keep writing the Pfennig, thanks to my good friends, Mary Anne and Pamela Aden. I also want to thank my long-time good friend, and former boss, Frank Trotter, for all his help in getting the Pfennig moved and all the technical expertise he added, for I’m not the sharpest tool in the shed when it comes to “tech stuff”…  The late, great, Dan Fogelberg greets me this morning with his song: The Last Nail… I used to play that song on my guitar, one of my fave songs to play too!

Well, we start the day today with not much movement in the currencies, metals, bonds, and commodities… But that doesn’t mean we won’t see some action in these assets as the day goes on, because…

it’s going to be a busy week with data from overseas, Central Bank meetings, and meeting minutes being printed. So, let’s get right down the business today… First off the Central Bank meetings… the Norges Bank is first up.. and while the markets all expect the Norges Bank (Norway’s Central Bank) to remain on hold… I’m getting the feeling that they are ready to wet their interest rate powder, with inflation running above 2%, and the economy getting weaned off of the fact that they were so dependent on Oil. But… I really don’t believe that the Norges Bank will wet their powder until the European Central Bank (ECB) begins to unwind their accommodative monetary stance. But to hear the Norges Bank talk about how things are looking better, would go a long way to correcting this recent bout of weakness in the krone.

Next up will be the Reserve Bank of New Zealand (RBNZ)… The RBNZ too is ready to wet their interest rate powder, but… with Australia struggling with their mining, because of weak prices of raw materials, I do believe the RBNZ is on hold until, things turn around in commodity prices. The RBNZ has been ready for a couple of months now, and unfortunately, it will take them a few months more, but like I said a couple of months ago… This is a rare opportunity for individual investors to get the opportunity to buy a currency, in this case kiwi, before the Central Bank raises rates, but knowing that an interest rate hike is coming… But just like a lot of things the rate hike in New Zealand is evident, but not imminent at this time.

And finally, the Reserve Bank of Australia (RBA) will print their last meeting’s Minutes… I don’t expect much here, other than the things I told you were said at the press conference after the last RBA meeting. That the RBA is optimistic, but still sees dangers out there in the world, that could bring the whole recovery down.

As far as data around the world is concerned there are only two that really mean anything (to me that is), and that is Canadian inflation, and the Eurozone’s flash PMI (manufacturing index)… In yesterday’s return to the saddle for me and the Pfennig, I talked about the Canadian dollar/ loonie, and said that the loonies recent strength had the markets scratching their collective heads, as to why this was, given the price of Oil had remained quite weak.. But after the Canadian inflation report prints this week, and shows that inflation has dropped, that might not be the thing that would keep the loonie running hot..

The Eurozone’s Flash PMI’s should show another improvement in manufacturing for the Eurozone… These are the flash reports, not the final ones, but I don’t really believe that there’s ever that much change between the flash and real reports that come later in the month. So, maybe the euro can get some love from the flash report when it prints on Thursday.

Here in the U.S. the Data Cupboard isn’t filled with real economic data this week, but we will see the color of the Current Account Deficit for the 1st QTR today, and it should print about $112 Billion… More debt, I just shake my head in disbelief that we, as a country, continue to allow this deficit spending to go on and on like the Energizer Bunny! But, it’s what the Joneses are doing! China, the U.K., Eurozone, and shoot even Canada have gone this route, and I still can’t believe that it won’t all end up in tears…

But, that’s a discussion for another day, or maybe the Butler Patio, I don’t want to take up all my space today with another beat down on debt… You, dear long-time reader, know all too well that I’ve been banging the drum on our rising debt for many years now, and well, I guess sometimes I’ve sounded like the boy who cried wolf, but one day, that wolf will come knocking on our door…

Well, Gold got smacked by almost $10 ($9.80) yesterday… We have geopolitical tensions rising in the Middle East again, this time between the U.S. and Russia, and then throw in Iran and the tensions get thick, but that hasn’t helped Gold to recover any at this point. But then the paper Gold traders who short the heck out of the metal, don’t really care about geopolitical tensions…  I think it best to switch gears here and let you listen in to Ed Steer’s thoughts on the Gold price from his letter this morning that can be found at: www.edsteergoldandsilver.com… Here’s Ed..

“I would suspect that the reason there wasn’t more volume in gold is because that particular moving average is still intact, but I doubt that ‘da boyz’ will stop at this juncture. I would also suspect that there’s not much more to go in silver, but there must be something, or the price would not have declined yesterday. It’s the very act of the Managed Money traders selling long positions — and going short as well, that causes prices to fall. So until these traders are drained dry, the engineered price decline in silver will continue, using the engineered price decline in gold as a hammer to continue pounding on the silver price. This is what Ted Butler has been going on about for decades now — and that few other so-called precious metal ‘analysts’ just won’t touch.” – Ed Steer

I know, I know, I told you some time ago that I wasn’t going to go down that price manipulation of Gold street anymore, but that was then, and this is now, a fresh restart for the Pfennig, and you can expect more of this going forward! Because it’s just to difficult to ignore any longer, folks..  Tomorrow, I’m going to print a communication from long ago that proves what I’ve been saying all along that the price of Gold is manipulated to keep the dollar alive and well..  So, there’s the teaser for you to come back tomorrow! (goes to show you that I won’t stop at anything to get you to come back and read again tomorrow! HA!)

The FWIW section today has the great James Grant taking on someone that basically pooh-poohed the idea of a Gold Standard…

Well, I have a project for you… sit down at your computers and fire off a letter to your congressman and ask them why on earth did they not only extend the economic sanctions on Russia but add to them last week!  I read a very interesting article yesterday about how in poker, if you don’t find out who the sucker in the game is, It’s you!  And how in poker it’s usually a good idea to side up with someone to get everyone else out of the game until it come down to just you two…

So, take that idea to the negotiations that the U.S. is attempting to have with China to get involved in the N. Korea problem…  So, the U.S. is not gaining any friends needed to get both of these things accomplished… They’ve ticked off the Russians with the added sanctions, and will most likely end up ticking off the Chinese with our demands that they get involved with N, Korea… That’s not gaining any advantage here folks… But then what the heck do we care, the gang’s all here!

So, long-time readers know how I like to personal experiences and parlay them into thoughts about the economy, right? Well, I was listening to a woman talk about her son’s experience in attempting to find a house to buy, because his rent has risen so high that if he could find the right house, he would be spending less on his house payment, insurance, etc. than he was paying on his rent…  Now that’s crazy folks!

In 2005, 2006, home ownership in this country rose to 69% from 64% previously, after the Financial Meltdown, home ownership fell back to below 64%, and people began to rent again… That’s when rents began to explode in price, and brings us to where we are now, with rents hitting a high, and now appearing to suffer from over exposure to high prices…

Now, the reason I bring all this up is that I’ve talked about how home prices have begun to drop again, and now we can add rent prices dropping… Now all this is good for the consumer, but not the investor who might own some REITS in these areas…  (Real Estate Investment Trusts) So, this is just a warning to those that do own them, yes they’ve been great investments in the past 8 years, but, maybe they’re getting a little long in the tooth, eh?

A full service letter is what I strive to bring you each day folks… Nothing held back, any longer, and full-on Chuck! The way things used to be… I sure hope you like it this way…  More on the currencies tomorrow, there just wasn’t much to talk about there given the small moves yesterday and in the overnight trading.

To recap… The Norges Bank and RBNZ meet this week, but no moves are expected. The RBA prints their latest meeting minutes. And we get some data from overseas this week, while the U.S. Data Cupboard gets restocked… Chuck is concerned that the U.S. hasn’t gained any friends in their negotiations with China, and Ed Steer gives us his thoughts on the Gold manipulation today… All that and more!

For What It’s Worth…  Well, I gave you teaser above about the great James Grant taking on someone regarding the Gold Standard, so there’s no reason to beat around the bush here… I found this on the GATA communique’ that they send me each day… And I thank Ed Steer for securing my place with the GATA folks!   if you have subscription to the WSJ you can also find it here: https://www.wsj.com/articles/goodbye-yellow-brick-road-14976437      So, here’s James Grant.. enjoy!

“Mr. Ledbetter’s book is a chronicle of the American people’s fascination with gold. He is mystified and bemused by it. He rolls his eyes at the gold rushes and the gold-centered orthodoxies of yesteryear. Whatever were our forbearers thinking?  (Jeffrey Ledbetter is the author of a book titled: One Nation Under Gold)

It’s no work at all to make modern money. Since the start of the 2008 financial crisis, the world’s central bankers have materialized the equivalent of $12.25 trillion. Just tap, tap, tap on a computer keypad.
“One Nation Under Gold” is a brief against the kind of money you have to dig out of the ground. And you do have to dig. The value of all the gold that’s ever been mined (and which mostly still exists in the form of baubles, coins and ingots), according to the World Gold Council, is a mere $7.4 trillion.

Gold anchored the various metallic monetary systems that existed from the 18th century to 1971. They were imperfect, all right, just as James Ledbetter bends over backward to demonstrate. The question is whether the gold standard was any more imperfect than the system in place today.
That system features monetary oversight by former university economics faculty—the Ph.D. standard, let’s call it. The ex-professors buy bonds with money they whistle into existence (“quantitative easing”), tinker with interest rates, and give speeches about their intentions to buy bonds and tinker with interest rates (“forward guidance”).

You wonder how the Ph.D. standard came to eclipse a system whose very name, “gold standard,” is a byword for excellence. Addressing a national television audience on Sunday evening, Aug. 15, 1971, President Richard Nixon announced the temporary suspension of the dollar’s convertibility into gold. No more would foreign governments enjoy the right to trade in their greenbacks for bullion at the then standard rate of $35 to the ounce. (Americans had long since relinquished that right; indeed, as Nixon spoke, they could not legally own gold.) Roughly a half-century later, the temporary suspension is beginning to look permanent.” – James Grant

Chuck again… Oh, and there’s so much more from James Grant on this book that I just don’t have the space for… But you get the point, Mr. Ledbetter thinks we’re all crazy to be so fascinated with Gold, and the great James Grant puts him in his place!

There is one good thing that came from the book though, and that is this story about “operation Goldfinger” it’s a very interesting story about what was going on while Gold was tied to a price of $35, and individuals were prohibited form owning Gold…  Maybe I’ll write an article about this because it’s very interesting indeed!

Currencies today 6/20/17… American Style: A$ .7615, kiwi .7257, C$ .7563, euro 1.1158, sterling 1.27, Swiss $.9736, … European Style: rand 13.0514, krone 8.4866, SEK 8.7315, HUF 275.97, zloty 3.7835, koruna 23.5342, RUB 58.09, yen 111.54, sing 1.3870, HKD 7.7993, INR 64.43, China 6.8102, peso 18.07, BRL 3.2895, Dollar Index 97.63, Oil $44.11, 10-year 2.18%, Silver $16.55, Platinum $92843, Palladium $866.35, and Gold $1,247.80 ( I lost my link to the SGE Gold price, and haven’t been able to find a good one to replace it, so until I do, no SGE price, sorry!)

That’s it for today… What a Beautiful Day it was here in St. Louis yesterday, not too hot, a nice southerly breeze, just fantabulous! Alex was here on Sunday after he got off work, and was telling us about his experiences in his summer school class: Gross Anatomy… His mom was shocked that he actually was cutting open humans that were dead of course! Every parent that had or has a child go through this kind of training has had to experience this shock! Chicago takes us to the finish line today with their song: Movin’ On, which really featured the great lead guitar playing of the late great Terry Kath, who we lost many years ago, and way too soon.. The great Jimmy Hendrix once told the sax player for Chicago, that Terry Kath was a better guitar player than he was! WOW! Oh well, with that, I’ll get out of your hair for today, and send you on your way to having a Tom Terrific Tuesday!


Chuck Butler