Author: admin

September 14, 2021

* Currencies gain back their Sunday night losses

* Petrol currencies moving higher with the price of Oil… 

Good day… And a Tom Terrific Tuesday to you! Well, after that “draggin’ The line” feeling I had yesterday morning, I spent the rest of the morning wanting to go back to sleep… I finally succumbed to Mr. Sandman, in the afternoon, and when I awoke, I felt so much better! When I was a young man, I would scoff at anyone that needed an afternoon nap… We all probably did that… But, I figure now, that with all the stuff I’ve been through, I deserve a nap when I feel the need! HA! Basically, your body tells you when you need to sleep, and I’ve become so good at listening to what my body is telling me… Eddie Money greets me this morning with his song: Take Me Home Tonight…

Well, all the dollar buying that went on Sunday night into Monday morning, was brought to a stop in the U.S. session yesterday…. Go figure…  The BBDXY, dropped from 1,147.93 in the morning to 1,145.53 at the close… The euro rose back above the 1.18 handle, and Gold found a way to gain $6.70, while Silver only gained 3-cents on the day…  I said yesterday that I would attempt to find out why the overnight markets were so bullish on the dollar, but… there really was nothing to speak of, out there that explained this scenario…  So, the foreign markets bought dollars, and the U.S. market sold dollars, isn’t life strange? A turn of the page, can read like before, can we ask for more? (Moody Blues)

In the overnight markets last night… The traders overseas thought, why buy dollars again when their brothers-in-arms just reversed everything they had done the night before… So, as far as the currencies were concerned there was little to no movement overnight. The BBDXY is trading in the same clothes as it wore yesterday at the close, 1,145.84, and the Dollar Index is 92.62… 

Gold, on the other hand, is not faring as well as the currencies, and is seeing selling this morning to the tune of $7.50… Gold closed yesterday at $1,794.50, so, with the selling this morning Gold is trading at $1,787.00, a relatively cheap level folks… And Silver is not faring any better, having closed yesterday at $23.81, it has given back 18-cents in the early trading to trade at $23.63…  

With the price of Oil now nearing $71 the Petrol Currencies have finally taken the flyer and begun to rally along with Oil… The Russian ruble leads the Petrol Currencies higher, and joining in is the Canadian loonie, the Norwegian krone, Mexican peso,  and pound sterling, with the Brazilian real not being allowed to participate, just yet… 

The Commodities are moving higher in price again folks… The inflation indicator, Copper, is pushing the price envelope and trades this morning at $4.30… But that’s not the only commodity that’s indicating inflation is rising, and Bloomberg’s Commodity Index shows a 25% YTD return… But I’m more interested in the recent run higher in commodities… And you should be too… 

So, today is the day that we see what the cooks and massagers think is the right amount of consumer inflation to report…  I always call the consumer inflation report the “stupid CPI” because it’s stupid… It’s cooked, it’s massaged, it’s manipulated, and it’s worthless to you and me… No wait! It’s not worthless, but pretty darn close to being worthless…  The thing it does do for people that know the history of the CPI, is it’s a indicator of two things… 1. How much inflation the gov’t wants to show us exists, and 2. Just how much the number is manipulated…

These days all markets are manipulated, and we’re getting to the point that a lot of data is manipulated too… When John Williams at www.shadowstats.com says inflation is really around 14%, but the Gov’t tells us it’s only 4%, you’ve got a very good idea how much the inflation data is manipulated…

What would it hurt to show people what the real inflation number is without having to subscribe to Shadowstats.com to know? Well, basically, inflation fears, begets higher inflation… if Joe six-pack sees hears that inflation is rising, he will jump at the opportunity to go out and buy that new refrigerator before its price rises… And that causes additional price rises, and pretty soon, you’ve got runaway inflation… That is unless you have a prudent Central Bank that has its hands on the interest rate lever, And we all know that we don’t have a prudent Central Bank…

Oh, and speaking of our Central Bank, or Cartel, as I prefer to call them… We sure haven’t heard much follow up talk regarding Tapering since Cartel Chairman Powell, first spoke the “T” word at the last meeting, now have we? I think that as the coming weeks go by, we’ll be hearing less and less about the need to Taper from the Cartel… They will be “Tapering” the “taper” talk!

It all depends on what the Elite wants the Cartel to do… The Cartel gets their marching orders from the Elite, and it all depends on what they want to see going on in the economy, folks…

Circling back to Gold getting sold this morning… I look at this and think that the price manipulators are at work here, to take a little off the top, because they know, or strongly believe that the Consumer Inflation Index (CPI) is going to show how strong inflation is (according to the bean counters and all their hedonic adjustments) , and they think that this will push Gold’s price higher… Therefore, take it down now, and when it rallies later, the net move will be flat…  That’s how I see it playing out this morning… 

So, the House has released the details of their tax plan… Tax and spend, has been the mantra of the Democrats for a long time, and they didn’t want to mess with that mantra..  I have something for you in the FWIW section today that goes with this discussion here, that you won’t want to miss! One of the items in the tax plan, that will be used to pay for the $3.5 Trillion deficit spending plan, is a change in the taxing of the cryptocurrencies, putting them in the same category as other investments…  

The U.S. Data Cupboard today, has the aforementioned stupid CPI, and Core Inflation for August… We’ll also see the color of the Small Business Index, which I would think would be weaker in August…  No matter what the CPI shows us today, the real inflation number will be much higher folks… And as long as the folks that put together the CPI keep showing it lagging, the Cartel can point to it and say that inflation is not a problem… And we, you and me, and the guy down the street that mows his lawn with his shirt wrapped around his head, get to pay for the Cartel’s ignorance to this problem…  I’m just saying… 

To recap… The selling in the overnight markets Sunday to Monday, was reversed by the U.S. traders yesterday, as the currencies recovered their lost ground, and Gold gained $6.70…  In the overnight markets last night, the traders thought why did we buy dollars only to have them sold? So, the currencies were flat overnight last night, but Gold is getting sold ahead of the CPI print this morning, and Chuck has his thoughts on that! 

For What It’s Worth…  Well, good friend, Dennis Miller and Chuck did an article together about a month ago, where we looked ahead 5 years and described what I saw for the country… In this article I talked about the U.S. Gov’t ending their programs like Social Security, and Medicare or at least making them unattainable, because they didn’t have the money to pay for them… Well, it’s starting folks…. the changes to how you and me make money and retire…  That’s what this article is about, and it can be found here: House Democrats propose new retirement plan rules for the wealthy (cnbc.com)

Or, here’s your snippet: “House Democrats proposed a slew of changes to retirement accounts for the rich on Monday, part of a restructuring of the tax code tied to a $3.5 trillion budget plan.

Taken together, Democrats’ reforms aim to erode the use of retirement accounts as a perceived tax shelter for the wealthy and instead promote them as a way for low- and middle-income Americans to build a nest egg.

Wealthy individuals with retirement accounts exceeding $10 million would be prohibited from contributing extra savings and would have a new required minimum distribution each year, according to an outline of tax legislation unveiled Monday by the House Ways and Means Committee.

The bill would also repeal so-called Roth conversions in individual retirement accounts and 401(k)-type plans for those making more than $400,000 a year. It would also prevent savers from using the “mega-backdoor Roth” strategy, regardless of income level.

Further, the legislation would prohibit individual retirement accounts from holding investments that require buyers to be accredited investors, a status generally reserved for wealthy investors.

The proposals are part of a broader theme of raising taxes on those who earn more than $400,000 a year to help pay for education, climate, paid-leave, child-care and other measures while also making the tax code more equitable.”

Chuck again… This is just the start folks… Things will be quite different for investors and retirees in 5 years… Got Gold?

Market price 9/14/2021: American Style: A$ .7335,  kiwi .7113,  C$ .7908, euro 1.1808, sterling 1.3869, Swiss $1.0845, European Style: rand 14.2170, krone 8.6024, SEK 8.5874,  forint 296.36,  zloty 3.8549,  koruna 21.4817, RUB 72.88, yen 110.10, sing 1.3431, HKD 7.7786, INR 73.62, China 6.4514, peso 19.89, BRL 5.2323, BBDXY 1,145.84, Dollar Index 92.62,  Oil $70.97, 10-year 1.33%, Silver $23.63, Platinum $954.00, Palladium $2,127.00, Copper 4.30, and Gold… $1,787.00

That’s it for today… Another shorter version of the letter today… I find myself thinking I’m starting to sound like a broken record some times, and I certainly don’t want to do that!  Well, looky here… What a week ago I thought to be the end of my beloved Cardinals chances to make the playoffs, has them only 1/2 game out this morning after their win last night VS the Mets… Now their chances have become real… I don’t believe it myself, but the other teams in the race have folded like a cheap lawn chair, giving the Cardinals an outside chance, that they’ve taken advantage of… They’ve got to keep winning…  The early fall weather here has been fantastic, and I’m loving it!  Bill Withers takes us to the finish line today with his song: Lovely Day…   what an appropriate song for today!  I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

 

September 13, 2021

* PPI soars, indicating that inflation continues… 

* The dollar gets bought in the overnight markets… 

Good Day… And a Marvelous Monday to you… Did you have a nice weekend? Mine was great! It started with a driveway happy hour on Friday, where I got to catch up with neighbors and former colleagues at EverBank. From there, the rest of the weekend was filled with absolutely fabulous weather, and two Cardinals victories, and being outside with my good friend Duane. The only bummer of the weekend was the loss by my beloved Missouri Tigers… UGH! I’m greeted this morning with a song by a 70’s band that didn’t last too long… Lobo greets me this morning with their song: I’d Love You To Love Me

Well, did you get a chance to check out that Producer Price Index (PPI) that printed on Friday last week? The producer price index increased 0.7% in August from a month ago, above the 0.6% Dow Jones estimate.  Prices rose 8.3% from a year ago, the biggest increase on record going back to 2010. That’s right… wholesale inflation or PPI, is up 8.3% from a year ago, which means that the pipeline to consumer inflation is chock-full-o-inflation, and it’s coming to a product that you want to buy, near you! 

So.. I have to wonder what the Cartel heads are thinking these days, for they have stood steady Eddie with their thoughts that the current inflation would wane by year end… But this PPI print says that a waning is not going to happen…  The Cartel has been so wrong on this inflation that they can’t change horses in the middle of the stream now… But, it would be far better for the economy and you and me, if the Cartel just began to fight inflation, and didn’t mention their previous error in forecasting… 

So, with all this inflation pressure in the docket just waiting to explode on the consumer inflation scene, one would think that the dollar would be be sold… But that wasn’t the case on Friday… The dollar wasn’t sold or bought on Friday, and that had me scratching my bald head… The BBDXY ended the week at 1,145.53, up just a tiny bit from Thursday’s 1,145.49… 

And Gold? The all-time leader in inflation hedges, couldn’t find a bid all day, and ended the day on Friday down $7.40 to close at $1,787.80, and Silver lost 32-cents on the day and ended the week at $23.78… What on earth is going on here? Is the opposites trading that we’ve seen in the past few years, spilling over to Gold?  Now that would be the icing on the cake for opposites, now wouldn’t it?

In the overnight markets last night, the Asian and European Traders have bought dollars by the bushel full… The BBDXY has risen from 1,145.53 to 1.147.93, and the euro has been pushed below the 1.18 handle..  I’m not seeing what caused this dollar buying in the overnight markets, but I’m sure it doesn’t make much sense any-old-way!  

As I look at the currency landscape this morning, the only currency that has held its ground VS the dollar, and found a way to move higher, is the pound sterling…  I’ve been watching the pound the last couple of weeks, as it bounced around 1.3775 and held its ground, but now it’s moved higher into the 1.38 handle… I’ve never been swayed by these moves higher by the pound, so be careful here, don’t get swayed by the strong move higher… 

Well, the Cartel made a Big Deal out of talking about Tapering in their last meeting, and they said they wanted to Taper by year-end… I just don’t see that happening, do you?  Let’s see now… The Reserve Bank of New Zealand (RBNZ) began tapering their bond purchases back in May, The Bank of Japan (BOJ) began tapering, the European Central Bank (ECB) announced at last week’s meeting that they too would begin to taper their bond purchases, and other European Central Banks will most likely follow the ECB…  

I find this to be something that’s very interesting… These Central Banks around the world have seen the writing on the wall with regards to rising inflation and see tapering as a means to tightening rates, without having to actually hike rates…  Makes you wonder, doesn’t it, what the Cartel is going to do? 

Adding to inflation fears… The price of Oil is trading with a $70 handle this morning… I guess the fears of a slower economy because of the variants of the virus, aren’t scaring Oil traders… 

I’m going to repeat something I was talking about last week, because this topic came up a couple of times this past weekend… And that is that there are 10.9 Million job openings in the U.D. and 8.4 Million unemployed folks… And restaurants can’t stay open because they can’t find help, department stores have to shorten hours because they can’t find help, and so on… This is a real dilemma  here in the U.S., and there’s no real way to fix it other than to get people out there to go find a job… 

But the pandemic shutdown has brought on a new thought process when it comes to thinking about a job for Americans… Right or wrong, it has changed how people look at jobs, and they have decided that they aren’t going back to their old jobs…  So 10.9 Million job openings will remain a problem, and 8.4 Unemployed will also remain a problem, and apparently the two shall never meet!

Well, the old Debt Ceiling is coming upon us once again… Treasury Secretary Janet Yellen warned last week,  that if Congress doesn’t act, it will be The End of The World As We Have Known It. She must have been listening to R.E.M.’s greatest hits, because that’s all drama that’s not needed!  The Debt Ceiling is just a number that has been breached so many times in the past, that it’s become a non-factor… The Democrats blame the Republicans, and the Republicans blame the Democrats…  It’s a new version of “Who Did It”?    They both did! 

So why get all Chicken Little on us about this Debt Ceiling, Janet? 

After last week’s Data Cupboard that has very little in the way of data prints for us, this week’s offerings will be plentiful… Data prints like the stupid CPI tomorrow, and Industrial Production and Capacity Utilization, along with Retail Sales, and other prints will come our way this week… 

Just one more thing to say about the rising inflation and the dollar rallying… What on earth are traders thinking? That the Cartel is going to have to raise rates? Well, in my book, that’ll be the day, when you say goodbye, no wait! That’ll be the day that changes the world as we know it, because of the debt that the U.S. has amassed that has to financed… think about that for a minute, and then tell me that the Cartel will hike rates… 

To recap… The PPI on Friday soared to a record high, with an 8.3% increase from last year, for wholesale inflation, that will filter through to consumer inflation, and with consumer inflation on the docket to move higher, Gold was sold on Friday… Wait, what? Yes, Gold lost $7.40 on Friday in the face to rising inflation… Opposites trading? And Janet Yellen goes all drama queen on us with regards to the debt ceiling… 

For What It’s Worth… A few years ago, in a Sunday Pfennig, I went into a deep discussion about Deutsche Bank, and how I thought they were on the edge of a cliff… but they survived, and now they are issuing warnings about the economies of the world… This is an interesting article, and it can be found here: Why One Bank Is Warning Its Clients Of An Imminent “Hard Correction” | ZeroHedge

Or, here’s your snippet: “Earlier this week, when recapping the latest bearish outlooks from most large Wall Street banks, we touched on Deutsche Bank’s latest House View take in which the bank – along with most of its peers – said that its strategists expects an “imminent correction” without giving much context for the bank’s gloomy take.

So fast forwarding to today, the bank’s chief equity strategist Binky Chadha expounded on this bearish take, and in a note pointing out that “equity valuations are extremely rich”, he first explains “what’s keeping equity valuations high”, and then goes on to warn that “the risk the correction is hard is growing” adding that “there has been a clear negative relationship between initial valuations and subsequent forward returns, with the relationship strengthening as the return horizon is increased from 1 to 3 to 5 years out. For the highest decile of initial valuations, which is where we currently are, 5-year forward returns have on average been slightly negative.”

Starting at the top, Chadha lays out what everyone – even the NY Fed president – is aware of, namely that equity market valuations are “historically extreme” on almost any metric: “trailing and forward price to earnings (P/E), enterprise value to EBIT, EBITDA  or operating cash flow are all well into the 90s in percentile terms. High valuations are broad based across sectors and median company valuations are high.”

Furthermore, he notes that “equities are very expensive (36%) relative to the drivers of valuation which have explained the bulk (70%) of historical variation in them.” As a result, the cyclically adjusted P/E at 26.2x is well outside its historical 10-20x range “and easily the highest outside of the Tech bubble.”

Chuck again…  Well, this is nothing new regarding warning clients about the stock bubble… But the Cartel just keeps blowing air into the bubble, folks… It’s been very amazing to me just how stretched the bubble can get, but it does… 

Market prices 9/13/2021: American Style: A$ .7351,  kiwi .7106,  C$ .7886, euro 1.1775, sterling 1.3820, Swiss $1.0825, European Style: rand 14.2070, krone 8.6517, SEK 8.6462, forint 296.48,  zloty 3.8576,  koruna 21.5103, RUB 73.14, yen 110.12, sing 1.3434, HKD 7.7791, INR 73.66, China 6.4433, peso 19.90, BRL 5.2448,  BBDXY 1,147.93, Dollar Index 92.84,  Oil $70.54, 10-year 1.32%, Silver $23.68, Platinum $956.00, Palladium $2,228.00, Copper $4.30, and Gold… $1,789.20

That’s it for today… not was wordy today… I’m really draggin’ the line this morning, and I need something to get me revved up! HA! Saturday was the 20th remembrance of our 2nd day of infamy… It’s good that we have big productions of remembering this day so that people never forget how we were attacked… I used to have a small 9-inch tv behind my desk at EverBank and on that day the whole office staff were crowded around that tv watching the events. I’ll always remember that… So, my beloved Missouri Tigers hired an NFL defensive coordinator, to fix the defense… Well either he’s not the answer or the players are lacking…  Because the Tigers’ defense is really bad… The NFL’s season got going yesterday. I don’t watch much NFL any longer, and I dropped out of the fantasy football league I participated in for years…  David Bowe takes us to the finish line today with his song: Waiting For The Man…  I hope you have a Marvelous Monday and please Be Good To Yourself!

Chuck Butler

September 9, 2021

* Currencies & metals continue to get sold on Wed

* But in the overnight markets the currencies & metals rally!

Good Day… And a Tub Thumpin’ Thursday to you!  I sure hope it’s a Tub Thumpin’ Thursday today because there’s a day game at Busch Stadium, the weather is absolutely Chamber of Commerce days, and well those two things combined should clear the way for a Tub Thumpin’ Thursday! I’m hosting a driveway happy hour tomorrow afternoon… Should be a good one… Everyone brings their own lawn chair, and cooler of their favorite beverages, and we socially distance the lawn chairs and then get to getting caught up with folks we haven’t seen in a while… I have to say, it’s tons better than a Zoom Happy Hour! And having told you that, I’m reminded that I need to tell my wife that we’ll have 20 people in the driveway tomorrow afternoon! The band, Lighthouse greets me this morning with their classic rock song: One Fine Morning… 

Well, I didn’t get any takers on my challenge for someone to prove me wrong yesterday, so that must mean you all agree with me regarding the price manipulation scheme…  I did get a dear reader chastise me for talking about the ACLU and Civil Liberties… Oh well… the one thing that dear readers must remember, is this: This is my letter, and I can choose to talk about anything I want to…

OK… well, all the selling of the currencies and metals that went on Tuesday, was watered down a bit yesterday… The BBDXY rose from 1,145.45 to 1.146.57, and Gold lost another $5.50… As far as the Gov’t is concerned, the price manipulators did what they were supposed to do, and that is: Scare Gold holders into selling their positions… That way, they, the Gov’t, doesn’t have to worry about them going forward…  So, the dollar was still being bought, for whatever reason there may be, it’s got to be trumped up anyway, because with the amount of dollars that are being printed these days, there’s only one thing that could happen to the dollar and that is for it to go down…

Of course that’s where the PPT (plunge protection team) steps in and buys dollars to protect it from a big fall… But if you’ve noticed whenever the dollar gets propped up by the PPT, and the currencies lose value, it only takes them a relatively short period of time to return to the levels they traded at before the propping up began…  And that tells me this:  The propping up of the dollar is meant to start a trend for people to buy dollars, but since no trend is evident, then…. The overall trade for the dollar is to be sold…

So… Gold lost $5.50 yesterday to close at $1,789.60, and Silver barely hung on to the $24 handle, after losing 39-cents on the day to close at $24.01…  So, I would have to say that the price manipulators did achieve the Gov’t’s goal of scaring Gold investors into selling their positions… But not me! And probably not you… For we know that no matter what the price manipulators do, we’re not selling, period!

In the overnight markets last night… there’s been some recovery in the currencies and metals… The BBDXY, which closed yesterday at 1,146.87 is down this morning at 1,145.49. So, not a HUGE move, but a downward move nonetheless, which is something we hadn’t see this week so far. In the early morning trading in the metals, Gold is up $8.80 and Silver is up 27-cents. Of course yesterday morning these two metals were up in the early trading, but that didn’t stop the price manipulators and as I said above Gold lost $5.50 on the day… So, maybe, just maybe, cause you never know, Gold will be able to add to its early morning gains today! 

So, let’s go back in time… dodododododododo…  Before the Pandemic or BP… And I was telling you things like a large percentage of Americans didn’t have enough in savings to pay a $500 bill… Well, now skip ahead to today, and we have, probably, most of those same Americans having been out of a job for some time, and now are faced with eviction from landlords that are strapped for money too… Thee was a question that was asked about this, and the person wanted to know what the folks that had been receiving sums of money from the gov’t for being unemployed, but didn’t have to pay rent or mortgage payments, did with their money?  Well, I’m sure they would tell you that they still had to pay for groceries, medical bills, and what have you… But it’s still a good question to ask…

When you take out Gov’t spending from the GDP calculation, you don’t have much to speak of there… And most likely we would be at the same GDP rate that we had averaged for the last decade, which was 2.1%…  The Gov’t is getting ready to release the Kraken of deficit spending on us folks, and that’s going to keep GDP looking stronger, but we all know that it isn’t really…  Dave Gonigam had a great term for the upcoming deficit spending yesterday in his 5 Minute Forecast, when called it the “Spendapalooza”…   in my best Gomer Pyle voice, I’ll tell you what I think of this upcoming deficit spending… Shame, Shame, Shame…

And here’s where I’m going to let longtime friend, and publishing guru, and best selling author, take over with his thoughts on Freedom… Take it away Bill Bonner!

“Free people don’t “invest” their own, real money in unwinnable wars and jackass projects. They don’t bail out Wall Street. They don’t shut down a whole economy to fight a disease that poses a threat to relatively few. They don’t lend money to those who can’t afford to pay it back.

In theory, the freer the economy, the richer the people in it. They devote their entire energies to doing what they want… rather than to doing what others want them to do.

After all, that is what freedom is all about. Choices always need to be made. The question is: Who makes them?

In a free economy, people make the choices for themselves. They eschew the bad bakeries and go to the good ones. They drop losing investments, and put their savings into ones that pay a real return.”

Chuck again… yes, Bill always has a way to to explain things that everyone can understand… I took that from his Daily Diary that can be found at www.rogueeconomics.com  

You may recall me saying that about 8 years ago I wrote a Sunday Pfennig that was titled: Chuck’s Debt Solutions… And in my list of things that we as a country could do to stop the bleeding in deficit spending and get back to a balanced budge, I said that we should end all wars… the War in Afghanistan, the war on drugs, the war on poverty, and so on… So, once again Chuck and Bill are on the same page here… 

The U.S. Data Cupboard yesterday had the Job Openings, and they grew to 10.9 Million from 10.1 Million in June… So, like I said yesterday, there’s 10.9 Million job openings in the U.S. and 8.4 Million people unemployed… But apparently, a lot of potential workers that have been off of the job for sometime now, aren’t going to go back to the job they left… And apparently, a lot of potential workers have decided that they can live with one income in the house… And apparently a lot of potential workers have decided to open their own business…  And there’s more reasons why these two numbers aren’t meshing…

Consumer Credit (read debt) declined in July from June… June’s debt figure for consumers was $38 Billion, and July’s figure was just $17 Billion…  But that doesn’t make a dent in the overall indebtedness of the U.S., which is now at $86 Trillion, counting Gov’t, Corp, and personal debts… and that doesn’t take into consideration the Unfunded Liabilities that according to the Debt Clock are $156.3 Trillion… And that’s before the Spendapalooza gets its feet wet…

I recall one of the last times I was in Vancouver to speak it was about 5 years ago… I was sitting in the lounge area and talking to Jeff Clark and telling him that the total indebtedness of the U.S. had just reached  $50 Trillion!   So, in 5 years, we’ve added $36 Trillion… Who’s going to pay for that?

Today’s Data Cupboard has the usual fare on Thursday, which is the Weekly Initial Jobless Claims, which have been dwindling every so slowly, but I would think that they probably have hit a bottom because the Variants of the virus are really starting to slow things down again…

To Recap… The dollar buying continued on Wednesday, but in a watered down version of what went on Tuesday… The euro lost more ground, as did Bonds, and the metals… Gold lost $5.50 on the day, and Silver lost 39-cents to barely remain above the $24 handle…  Again today there’s not much in the way of data that could stop the dollar buying, so keep those hatches battened down! But in the overnight markets there has been some recovery in the currencies & metals, now let’s see if they continue to move higher VS the dollar today. 

For What It’s Worth…  Since I was talking about GDP above this morning, I saw this article and thought, why not? As it plays well with the thought of GDP falling…  Lola, or Goldman Sachs has reduced their forecast for 3^rd QTR GDP a 3^rd time! And that article can be found here: Goldman Cuts Its US GDP Forecast For The Third Time In The Past Month | ZeroHedge

Or, here’s your snippet: “It’s official: while Q2 was the best quarter for the economy in decades, in Q3 it is now widely accepted that as we wrote a month ago, the wheels came off as a result of a “sudden negative change.”

One doesn’t have to look too hard to find out why: between Friday’s catastrophic jobs report, the near record plunge in consumer confidence, the sharp contraction in retail sales where reports have missed expectations for 3 months in a row, whether it is due to the end of stimmies or the recent restrictions from the Delta variant, one bank after another took a machete, or in the case of Morgan Stanley, a nuke to their GDP Q3 forecast, with he bank on Thursday cutting its Q3 GDP to just 2.9% from 6.5% previously.

It got so bad that the NY Fed on Friday unexpectedly announced that it was suspending its GDP Nowcast tracker, as the underlying numbers had gotten so bad volatile, the central bank’s economists were ashamed to use them for analysis as the product would have been ugly for the Biden admin:

“The uncertainty around the pandemic and the consequent volatility in the data have posed a number of challenges to the Nowcast model. Therefore, we have decided to suspend the publication of the Nowcast while we continue to work on methodological improvements to better address these challenges.”

But while the U.S. central bank can pretend away bad numbers as if they simply don’t exist – or are “too volatile” – especially if their discussion would impair the fake recovery narrative said central bank is busy constructing, investment banks don’t have that luxury, and late on Monday – with the U.S. on holiday – Goldman did precisely what we said it would do last week, and in a note titled “A Harder Path Ahead” published by its economics team, cut its Q3 GDP forecast for the third time in the past month. As a reminder, this is how Goldman reached the “startling” conclusion that the U.S. economy was headed for a brick wall, which we first revealed to our readers back on August 13 when we said that “A Sudden Negative Change In The Economy”, something the big banks would then proceed to realize in the coming days…”

Chuck Again… nothing more to add here, I just keep telling you that the data prints continue to disappoint and not meet expectations, and when it all adds up… you get a slower economy than the powers that be will allow you to think about…

Market Prices 9/9/2001: American Style: A$ .7370,  kiwi .7117, C$ .7881, euro 1.1830, sterling 1.3814, Swiss $1.0873, European Style: rand 14.1488, krone 8.6895, SEK 8.6100,  forint 296.35,  zloty 3.8312,  koruna 21.4716, RUB 73.28, yen 109.93, sing 1.3447, HKD 7.7773, INR 73.49, China 6.4606, peso 19.90,  BRL 5.2275, BBDXY 1,145.49, Dollar Index 92.55,  Oil $69.82, 10-year 1.33%, Silver $24.28, Platinum $986.00, Palladium $2,335.00, Copper $4.23, and Gold… $1,798.40

That’s it for today… And this week of course, no worries there won’t be any real economic data dur to print tomorrow… It has been a tough week for the currencies & metals…  Buying opportunities, remember buying opportunities… What would the Cardinals do, or where would they be in the standings this year without Adam Wainwright? Adam turned 40 last week, and he went out and pitched 8.1 Innings last night as the Cardinals stopped their losing streak at 4 games… And now Adam has announced that he’s going to comeback next year… He and his catcher Yadier Molina have started 301 games together… I doubt we’ll ever see that number reached by another duo ever!  I sat outside to watch the game with neighbor Paul last night, he brought me some homemade cookies that I informed him I couldn’t eat… And that I hadn’t had a cookie for almost a year now… OK.. Day game at Busch today, and you know me… I love day baseball games! After watching the Dodgers lineup for 3 games now, I can see why they are 36 games over .500!  They are relentless! Ok… The Doobie Brothers take us to the finish line today with one of my fave songs from thee: Another Park Another Sunday…  Don’t know that one? Go to YOUTUBE and put that title in, I’m sure it will become one of your faves too! And with that, I hope you have a Tub Thumpin’ Thursday today… And please…. Be Good To Yourself!

Chuck Butler

September 8, 2021

* An ugly day on Tuesday, as the price manipulators were out… 

* 10.1 Million job openings, and 8.4 Million unemployed… where’s the problem? 

Good Day… And a Wonder Dog Wednesday to you! I don’t know where to begin to describe my hatred for price manipulators today… So, I’ll try to talk about something else for now… You know me, right? I truly believe in each person having the right to decide what goes in their bodies… Did you know that the ACLU (American Civil Liberties Union) the folks that fight for our civil liberties, have decided to stop fighting for our civil liberties, and fight for vaccine mandates? They, the ACLU doesn’t see any civil liberties problems with their stance on vaccines…  Now, that’s gotta make you wonder, what in tarnation is going on in this country? Foghat greets me this morning with their song: Fool For The City…

Well… sad to have to say this, but it was “one of those days” for the currencies and metals…  OK, I’m going to say something here that I have no proof of. I’ve just put two and two together, which in my book still equals 4, and the woke people can call me a white supremist because of that, I don’t care. It’s what I was taught… I’ve put together my thoughts on price manipulation through the years and used the WikiLeaks cables that go back to the 70’s regarding the U.S. Gov’t’s needing to diss Gold to protect the dollar.  I feel that the U.S. Gov’t basically is behind all price manipulation… They don’t do the dirty deed themselves, but they give the wink and nod to the Casino Banks to do the dirty work, and in return the Gov’t won’t prosecute them for price manipulation…

So prove me wrong on that scenario…

OK, so the dollar was bought by the bushel full yesterday… The BBDXY which began the day at 1,143.47, closed the day at 1,145.45…  The euro fell like a rock thrown from a cliff… And Gold? Well the price manipulators weren’t happy until they took nearly $29 from Gold’s price, and 39-cents from Silver’s price… It was a very ugly day for non-dollar investors… And then the ugly day turned even uglier when my beloved Cardinals lost again to the Dodgers… OK, back to the markets…

I have nothing more to add to what I’ve already said about price manipulation, which was so evident in yesterday’s trading that a blind man would be able to point it out… But… the silver lining here is that for investors wanting to buy Gold, they have an excellent buying opportunity after the price manipulators did their dirty deed yesterday… Dirty deeds, done dirt cheap! (AC/DC)

In the overnight markets last night… After all the dollar buying yesterday, the overnight markets, of which had started the dollar buying the night before, were plum tuckered out, but the dollar continued to move higher throughout the night. The BBDXY is 1,146 this morning, up from the close yesterday.  Believe or don’t, but Gold is up $5.60 and back to $1,800 in the early trading today, while Silver has gained 7-cents. Gold’s rise in the early trading has to be people taking advantage of the cheaper price, like I talked about above… 

All of the gains that the currencies put on their values last Friday have now been wiped out, with the only currencies holding to their gains being the Chinese renminbi and the Sing dollar… Of course I’ve explained the relationship of these two many times in the past so I won’t get into that again. Wait, What? You want me to explain it again? Really? Haven’t I bored you with that explanation many times before? OK, OK, here it is… 

The Sing dollar has had a history of staying in line with the Chinese renminbi, because they are in competition for exports, and Singapore can’t have the renminbi getting strong or weak without them following suit…  Now… aren’t you glad you pleaded with me to go here? 

OK… well I went out on a limb… I don’t have to find limbs that are so big any more… But I digress… I went out on a limb with a couple thoughts this morning…  Oh, believe me when I say that , I have more of these kinds of thoughts than you can shake a stick at… Most of them are reserved for the Butler Patio…

Speaking of the Butler Patio… we had it resurfaced this past spring, and it looks marvelous once again, so you can come barefoot or wear sandals, or flip flops, or sneakers, whatever footwear you choose, just make sure you bring a notepad, and a pen or pencil, because you’re not going to want to forget anything I talk about…

Silly stuff, I know, but you have to have some levity along with the serious stuff, or else I would be called the new “Dr. Gloom & Doom”…   

Well, I talked yesterday about the deficit spending programs that are on the docket waiting to be implemented… And I don’t think I explained what’s going to happen clear enough, so here’s my second try…  Congress is going to do everything under the sun and moon to get these deficit spending programs going by year end…  And, no wait, I’ve got to back up here…  The U.S. finances their deficit spending by selling Treasuries, and for months now, the Fed, I mean Cartel has been the major buyer of these Treasuries that have needed to be sold to finance all our deficit spending… And now, the Cartel tells us that they plan to Taper their Treasury purchases starting by year-end…

Now that’s two forces going against each other, which most times cause a HUGE EXPLOSION… And I don’t think this time will be different, that is, unless The Cartel decides to kick the Taper can down the road…  You see, where I’m going with this? The Cartel wants to taper, but Congress is going to make it so they can’t, and the Cartel’s Balance Sheet will continue to grow larger…  One day, the rest of the world is going to wake up and smell the coffee, folks… And when they do…  the dollar will be like Wiley Coyote, when he runs off a cliff…

So the Cartel will be just like Congress, who keeps kicking the debt can down the road… Credibility? The Cartel will have none left, but that won’t stop them from kicking the Taper can down the road, folks… 

And here’s something that I doubt you’ve heard about… European Junk bonds are now paying negative interest for the first time ever!  Here’s the good folks at GATA explaining what’s going on: “Investors in European junk bonds have begun accepting interest payments that are lower than eurozone inflation levels for the first time ever, in the latest sign that central banks’ crisis-era debt purchases have shifted the balance between risk and reward.

The yield on ICE BofA index of European high-yield bonds was pushed down to 2.34 percent this week, marking the first time buyers of so-called high-yield European currency bonds have accepted payments below consumer price inflation in the eurozone, which hit a decade high of 3 percent in August.”

Chuck again… Well, you what this tells me? That the world’s investors have gone stark raving mad! They call these bonds “Junk bonds” because their issuers aren’t exactly credit worthy, and their interest that they pay should reflect a “risk premium” to the buyers of the junk bonds… But that’s clearly not what we’re seeing here and it just proves to me that investors have gone crazy…

And then there’s this from the Data Cupboard today… 10.1 Million job openings in the U.S. and there are 8.4 Million people unemployed…  But yet only 240,000 jobs were filled last month… If you’ve got about 10 minutes to spare today, there was a good article on the Washington Post site that goes into detail what’s going on here…  you can find it here: Why America has 8.4 million unemployed when there are 10 million job openings – The Washington Post

The Data Cupboard today is basically empty of real economic data…  We will see the Cartel’s Beige Book, which rarely tells us anything… And Consumer Credit (read debt)… And that’s it!

To recap… The price manipulators had a field day yesterday takin down the currencies and metals. It was a very UGLY day for non-dollar investors… Chuck gives us his thoughts on how the price manipulation operates, and then gives us the silver lining for the day… Chuck is also a Big Fan of Civil Liberties… They’ve been taken from us ever since the cowardly attack on us 20 years ago this Saturday… Remember the Patriot Act? I digress here… There’s really no data to look at today, so there could be more dollar buying… Batten down those hatches!

For What It’s Worth….  Longtime readers know that I just don’t think that the Bitcoins of the world are going to be around forever like Gold has… China has already basically outlawed the digital currencies other than their own… Well, this came to me from the good folks at GATA and they took it from the NY Times, which you would have to have a subscription to read… But I have some of it here for you, and it can be found here: Crypto’s Rapid Move Into Banking Elicits Alarm in Washington – The New York Times (nytimes.com)

Or, here’s your snippet: “BlockFi, a fast-growing financial start-up whose headquarters in Jersey City are across the Hudson River from Wall Street, aspires to be the JPMorgan Chase of cryptocurrency.

It offers credit cards, loans, and interest-generating accounts. But rather than dealing primarily in dollars, BlockFi operates in the rapidly expanding world of digital currencies, one of a new generation of institutions effectively creating an alternative banking system on the frontiers of technology.

“We are just at the beginning of this story,” said Flori Marquez, 30, a founder of BlockFi, which was created in 2017 and claims to have more than $10 billion in assets, 850 employees, and more than 450,000 retail clients who can obtain loans in minutes without credit checks.

But to state and federal regulators and some members of Congress, the entry of crypto into banking is cause for alarm. The technology is disrupting the world of financial services so quickly and unpredictably that regulators are far behind, potentially leaving consumers and financial markets vulnerable.

In recent months, top officials from the Federal Reserve and other banking regulators have urgently begun what they are calling a “crypto sprint” to try to catch up with the rapid changes and figure out how to curb the potential dangers from an emerging industry whose short history has been marked as much by high-stakes speculation as by technological advances.”

Chuck again…  Ok, take what you saw happen to the Gold price yesterday, and then add in my explanation as to how that happens, and you’ll come to the same place I am with these digital currencies… The U.S. is going to issue their own digital currency, and I just can’t see them allowing other digital currencies to be in competition with their own digital currency… It just doesn’t make sense to me that the Gov’t would allow competition to their 1. Dollar, and 2. Own digital currency…

Market Prices 9/8/2021: American Style: A$ .7376,  kiwi .7105,  C$ .7896, euro 1.1822, sterling 1.3769, Swiss $1.0855, European Style: rand 14.2880, krone 8.6801, SEK 8.6047,  forint 296.02,  zloty 3.8189,  koruna 21. 4725, RUB 73.16, yen 110.29, sing 1.3450, HKD 7.7763, INR 73.48, China 6.4608, peso 19.91,  BRL 5.1690, BBDXY 1,146.08, Dollar Index 92.65,  Oil $69.32, 10-year 1.34%, Silver $24.47, Platinum $1,010.00, Palladium $2,454.00, Copper $4.19, and Gold… $1,800.80

That’s it for today… Another wordy letter for sure, but I seemed to have a lot to say today, so why save it for tomorrow… Today is all that’s promised to us… I actually got my iPad out last night, and tuned in to the Cubs game with Cincy, as my TV had the Cardinals on… The one time I was actually rooting for the Cubs to beat Cincy, they lost… I must have jinxed them! I sat outside for most of the game last night, and had to grab a hoodie as the temperature cooled to much for my liking… I keep my Cardinals hoodie close at hand because most of the time I need it as I get too cold in the house!  I basically live in the basement where my writing desk is, my large TV, my recliner, and bar are…  And it remains cool in the basement year round… Jack Johnson takes us to the finish line today with his song: Flake  I’m sure some of you are calling me that after my journey out on the limb today… But that’s OK, with me, just keep your opinions of me to yourself! HA!  I hope you have a Wonder Dog Wednesday, and please…. Be Good To Yourself

Chuck Butler

September 2, 2021

* currencies & metals turn their negative performance into a positive one on Wednesday!

* Ohio enacts law to prevent taxing money! 

Good Day… And a Tub Thumpin’ Thursday to one and all! This will be a 4 day holiday weekend for yours truly, and many of the senior traders in NYC, as they head to the Hamptons for the last holiday weekend of the summer… I’m really bummed out that I will not be hosting our annual Labor Day BBQ Party this weekend… But like I said previously, I’m still going to make the Big Green Egg work overtime this weekend… My beloved Cardinals, after taking the first game of the doubleheader, laid a big fat egg in the second game and got smoked by the Reds… The Cardinals still won the series and picked up a game on the Reds for the 2^nd Wild Card spot…  Kathy had something to say about the Cardinals’ chances to make the playoffs when she said, “They shouldn’t make the playoffs they aren’t good enough”… I was going to explain about getting in and getting hot, but decided to let that statement go, for she was correct!  Todd Rundgren greets me this morning with his song: I Saw The Light…

Well, didn’t I tell you yesterday that the folks calling the number of jobs created and reported by ADP were “so-called experts”? As you may recall I said that the so-called experts were calling for 600,000 jobs to be added in August… Well, like a ball that gets pitched and goes to the backstop… They were just a little outside with their call… The actual number of jobs added in August was 347,000, which at any other time would be hailed as great… Just not this time, because it missed the 600,000 number by a wide margin… Which is the point I was making the other day, when I said that most of the Data Prints in the U.S. have been disappointing and missing the expectations…

So, the rotten news on jobs added, carried over to the currencies and metals, with the dollar getting sold after starting the early trading getting bought… The move lower for the dollar was reined in at the close, but it still showed a loss on the day. The BBDXY which began the day at 1,146.31 ended the U.S. session/ day at 1,144.60…  For those of you keeping score at home with the old Dollar Index, you’ll want to show that the D.I. started the day at 92.63 and ended the day at 92.44…  The euro gained ground on the dollar on the day, and so did the Aussie dollar (A$)… And Gold & Silver turned around their negative numbers on the day, with Gold gaining 50-cents to close at $1,1815.60 and Silver gaining 24-cents to close at $24.22….

The euro traders were somewhat concerned about next week’s European Central Bank (ECB) meeting … So, the euro traders were not going to push the envelope too far and capped the euro’s gain at 1.1850… 

Speaking of the ECB… what on earth are they going to say and do when they meet next Thursday? Inflation, as reported earlier this week, is rising quickly, and they can’t allow inflation to grab hold of their economy… That is if they don’t want to face the crowds outside their building that came carrying pitchforks, and hoes…  Which I might say, if you don’t mind, the citizens of the U.S. should begin to think about doing at the Eccles Building, where the Cartel meets… I’m not inciting a riot… Just thinking that people of the U.S. should be asking the questions that cause the cheese to bind in the Cartel members…

Consumer prices in the Eurozone, increased by 3% this month from a year ago, if confirmed in a few weeks’ time, it would represent the highest inflation reading for 10 years.

This comes after Germany reported on Monday its highest consumer prices since 2008, with a headline inflation rate of 3.4% in August. France also reported its highest inflation rate in nearly three years on Tuesday.

So, it’s clear to me that the ECB needs to do something at this meeting otherwise…

If it weren’t for the Plunge Protection Team (PPT) keeping the dollar afloat, we would see the dollar getting sold like funnel cakes at a State Fair… Because… you don’t keep printing a currency and expect that debauching the current stock of currency won’t happen… It will happen eventually, when everyone and their brother realize that their currency is worthless…

In the overnight markets last night… there’s been little to no movement in the currencies & metals… I think traders are looking at the end of this week and cringing… On Friday the U.S. will have their Jobs Jamboree, and there won’t be a senior trader at their respective desk to trade off the data print… And then there will be 3 days to allow the data to digest, and there could be a lot of pent up frustration at the opening on Tuesday morning. 

Gold & Silver are flat this morning… The euro hasn’t budged off of 1.1850, and everything else is looking tired and wanting to go home…  Except that is the price of Oil… I don’t get what’s going on in Oil… Our friends (NOT!) at OPEC want to ramp up production, and the price of Oil rises?  The Delta variant of the COVID virus is spreading, giving off fear of new mandates, and the price of Oil rises?  Oh, well, any price increase in Oil helps the Petrol Currencies and so, other than paying outrageous prices for gas at the pump… The Oil price rising just shows inflation is strong… 

Ok, reading the 5 Minute Forecast like I do every day, I came across a story that Dave Gonigam put out that he called a “Lehman moment for the world’s second largest company”…  Here’s a snippet from the 5…

“So screams a headline at Zero Hedge about the impending default of China’s second-largest property developer Evergrande Group. Or as Ben Hunt of Epsilon Theory puts it: the “story no one is talking about.”

Chuck again… I guess we’ll see if the Chinese Gov’t will step in and bail out Evergrande Group… Or, will they allow them to fail and cause ripples to go through the Chinese markets, and hope that it doesn’t create a meltdown like the failure of Lehman Brothers did back in 2007…

You know me… I say if a corporation gets into deep and can’t get out that they should fail, and move on… There’s no need to have Zombie Corporations all over the place like we have here in the U.S.

I know that many of you Gold owners are growing tired of waiting for the big move upward in Gold’s price, and are thinking that you might take your profits and run…  Well… that would be the U.S. or Western way of dealing with Gold… In the East they view Gold as a store of wealth, and not a commodity that gets bought and sold on a whim…  I truly believe that when the U.S. and the rest of the West migrates to the Eastern way of dealing with Gold, that’s when we’ll see a true upward movement toward the bandied about prices of $4,000, and $5,000 and even $10,000…

Last May I wrote about how I viewed what was going to go down in the future for a lot of countries that had amassed great amounts of debt and had no idea how they would pay them down without defaulting on the debt… And that would cause a HUGE devaluation of their respective currencies, and that Gold would be the beneficiary of these defaults… I told you then that this was not something that I saw happening next week, or next month, or even next year, and that there would still be time for currencies to gain VS the every growing amount of dollars. But it was something that I had thought about a great deal, and would see it come to fruition eventually…

So, my thought last May was if in the end the beneficiary is going to be Gold, wouldn’t it be wise to buy Gold now before this all blows up on the markets and the currencies?  You know like the TV Commercial where they say, “Set it and forget it”… I say buy it and forget it…

You buy fire insurance in hopes that you never have to use it, right? You buy accident insurance for your car, in hopes that you never need to use it, right? You buy health insurance in hopes that you never need it, right?  Then I don’t understand why people don’t buy Gold as insurance VS a devalued dollar…

I’ve spent an inordinate amount of time talking about Gold this morning… Let’s move on to something else…

Yesterday, vehicle sales for August were supposed to print, but didn’t…  Have you driven by a Car Dealership recently? Did you see any cars in their lots for sale?  Car Dealers are moaning and groaning about the lack of new inventory and without inventory they have nothing to sell, and if they have nothing to sell, they can’t make the mortgage payments on the building and lot… Uh-Oh…  This lack of cars is troublesome to me folks…  As I watched the baseball games yesterday, I wondered out loud why Toyota was still running commercials saying they were having a sales event, when we all know they don’t have many cars to sell…  I guess the powers that be decided to not print the Vehicle Sales for August numbers, because they’re so awful they don’t want to scare investors into thinking that this isn’t good for the economy, which isn’t good for the stock market, which isn’t good for investors!

The backlog of cars is all being held hostage by the Chip makers…  The supply distribution chain is so screwed up right now that I read that a Taiwanese chip maker is going to open a factory here in the U.S. for Chips…. 

Or… I shudder to think of that this could happen, what if… China is holding back the chips for the cars to prove a point to the U.S.?  A real trade war could be the result, and since we don’t really manufacture stuff here in the U.S. any longer, I feel as though China would win that war, and then what’s next? Global rule? I shudder to think of things like…  Got Gold?

Today’s U.S. Data Cupboard has some interesting data prints for us to eye… First up is the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and that will be followed up by 2^nd QTR Productivity, and 2^nd QTR Unit Labor Costs, and then we wrap this all up in a nice pretty bow with the July Factory Orders data… 

To recap…  The ADP Employment Report was disappointing as it didn’t come close to meeting expectations of 600,000 jobs added. Only 347,000 jobs added was the actual number, and that disappointment caused Gold & Silver to turnaround their negative performances so far on Wed, and bot ended the day up, albeit small amounts, but up not down. The currencies rallied VS the dollar on the disappointment, but the euro’s gains were capped by traders that fear what the ECB will do when they meet next week.  Chuck talks a lot this morning about Gold… So you won’t have wanted to miss that!  And the Vehicle Sales data for August was AWOL… or did the powers that be decide it was too risky to print? Only the Shadow Knows!

For What it’s Worth…  OK, since today is the start of a long holiday weekend for me, and probably a lot of you, I wanted a “feel good” story to end the week, and I think I found one… This is an article about how the Gov for the state of Ohio signed into law a bill that will exempt Gold & Silver from taxes… And then there’s the really good part that you’ll have to go to the article to read or get it below in the snippet. The article can be found here: Signed as Law: Ohio Takes Step Toward Treating Gold and Silver as Money – Activist Post

Or, here’s your snippet: “Ohio became the 41st state to eliminate sales tax on gold and silver bullion. Repealing sales taxes on precious metal bullion takes a step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs. As Sound Money Defense League policy director Jp Cortez testified during a committee hearing on a similar bill in Wyoming in 2018, charging taxes on money itself is beyond the pale.

“In effect, states that collect taxes on purchases of precious metals are inherently saying gold and silver are not money at all.”

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what Arkansas’ sales tax on gold and silver bullion does. By eliminating this tax on the exchange of gold and silver, Arkansas would treat specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.”

Chuck Again…  Ron Paul is correct… the paper currency in your wallet or pocket, is fake…  And I’m so glad that Ohio has taken these steps to bring back Gold & Silver as money… Now… what’s taking the rest of the states so long to follow?

Market price 9/2/2021: American Style: A$ .7385,  kiwi .7090,  C$ .7932, euro 1.1850, sterling 1.3790, Swiss $1.0916, European Style: rand 14.3460, krone 8.6840,  SEK 8.6036,  forint 293.49,  zloty 3.8034,  koruna 21.4296, RUB 73.08, yen 110.00, sing 1.3439, HKD 7.7725, INR 72.94, China 6.4610, peso 19.97, BRL 5.1595, BBDXY 1,143.83, Dollar Index 92.44,  Oil $68.97, 10-year 1.29%, Silver $24.23, Platinum $1,002.00, Palladium $2,536.00, Copper $4.21, and Gold… $1,815.90

That’s it for today, and for 4 days for me!  What a beautiful day yesterday turned out to be… A real Chamber of Commerce day here in St. Louis…  It was like August and heat is over, now we turn to Sept and get warm days, cool nights, and mornings… YAHOO!  I’ve always said that the fall weather is the best weather that we experience here in St. Louis… And it’s not even fall yet! By the time we talk again, dear reader, my beloved Cardinals will have kept in the Wild Card race or bowed out… I’ll be Ok with either outcome… As soon as their season ends, the folks at Roger Dean Stadium will be contacting me about my spring training season tickets… That always gets me revved up!  Sat outside watching the games yesterday with neighbor, Paul, of whom I hadn’t seen or talked to in over a month! The High School that my oldest son, Andrew, teaches at, (Lindbergh High) will have their first football game of the new season tomorrow night. Lindbergh is a public school that doesn’t recruit athletes, so they have to scramble to keep up with other schools, and they do a darn good job of it too!   And College Football begins this Saturday! My Missouri Tigers should be improved this year… Go Tigers! Ok… my favorite Earth Wind and Fire song takes us to the finish line today as they sing: September… Now if that song doesn’t get you dancing in your chair, nothing will! I hope you have a Tub Thumpin’ Thursday today,and please be careful this weekend…  and Please Be Good To Yourself!

Chuck Butler

 

 

 

September 1, 2021

* Currencies & Metals see little movement on Tuesday…

* ECB to meet tomorrow, with inflation rising… 

Good Day… And a Wonder Dog Wednesday to you! See that? I changed it up today, aren’t I the tricky one? HA!  Man that hurricane Ida sure has caused some damage after landfall, and moving N.E… That video of the highway in Mississippi collapsing was scary… I hope everyone in Ida’s path have taken precautions and will be safe… About 8 years ago, I wrote a Sunday Pfennig, (yes we did those back in the day) and in it I said that one way to reduce our debt was to end all wars… That not only meant the current war in Afghanistan, but also,  the war on drugs, the war on poverty, and we didn’t know about COVID back then but you could easily add in the war on COVID…  What a waste of money through the years we as a country have spent on these stupid things… As if, we could stop drugs… As if we could end poverty… And now as if we could control a virus…. I’m just saying…  Michael Stanley greets me this morning with his rock classic song: Let’s Get The Show On The Road…

I think I heard some of you saying the title of that song, as I went on about money spent on wars… You may recall that I also said that we, as a country, should close all bases around the world and bring the soldiers home to defend our borders… Remember that was 8 years ago, before our southern border became political…  OK, now onto the markets…

Well, the dollar selling that went on in the overnight markets of Monday into Tuesday, saw a stop put to it during the U.S. session yesterday, and the dollar rallied to recover some of its losses overnight. The BBDXY started the day at 1,144 and ended it at 1,146… So not a huge move, but a recovery for the dollar any-old-way you look at it… Gold found a way to add $3.90 to its value and close at $1,815.10. Silver however, never found a bid on Tuesday and lost 13-cents to close at $23.98…  I had a reader from Denmark send me a note yesterday, and asked me if I thought starting a class action suit against the price manipulators was a good idea…

I referred the question to Ed Steer, who happens to be a board member of GATA…  Ed responded quickly, and said, “There have been lots of suits tried, but all have either all petered out, or failed.

Most banks involved have already been charged and found guilty, but they continue doing it anyway, because neither CFTC nor SEC will purse it with the zeal it needs.”

Ed then went on to tell me the following: “And according to Ted Butler, JPMorgan got out of its short positions in everything precious metal related back in March and April of 2020.  That big price smash back then was them exiting stage left.”

I want to thank Ed Steer for that explanation… And thank him for his daily letter on Precious Metals… He’s an expert in the field of precious metals folks… and you can find him here: www.edsteergoldsilver.com

In the overnight markets last night… There’s been little to no movement in the currencies and metals in the overnight and early trading sessions to speak of.  The BBDXY is trading at 1,146.31 this morning after closing yesterday at 1,146.78… So, see?  And Gold starts the day down $1.40, while Silver is flat as a pancake (Head East)…  There’s some economic data for the markets to deal with today, so let’s see where that takes us… 

Ok, here’s a report on CNBC,com this morning that hits home… “The Social Security trust fund most Americans rely on for their retirement will run out of money in 12 years, one year sooner than expected, according to an annual government report.

The circumstances, which were exacerbated by the Covid pandemic, threaten to shrink retirement payments and increase health-care costs for Americans in old age sooner than expected.

The financial outlook for Social Security and Medicare, two of the nation’s preeminent safety net programs, has deteriorated over the past year.”

Chuck again… My dad used to tell me that I should never rely on Social Security for my retirement. He told me that he didn’t see how it would still be feasible to pay people their money back when so many baby boomers were retiring in the coming years…  That’s the thing that makes me so angry, folks… I’m only asking for my money back that I put into the system through payroll deductions that I made since I was 15 and working selling subscriptions to the Globe Democrat, door to door! 

The European Central Bank (ECB) will meet tomorrow and as I told you yesterday, inflation in the Eurozone is rising quickly… So what will the ECB do, ignore the rising inflation, like their brothers-in-arms at the Cartel? Or do they address it, and act like a real Central Bank that’s main mandate is to not allow inflation to rise? 

And don’t look now, but Japan is implementing another stimulus plan… That makes 100 of them so far… I’m exaggerating here, but you get the point, they keep making stimulus packages, and their economy is remains mired in a deep funk…  We’re turning Japanese, I really think so! 

I had a longtime reader send me note yesterday, asking where the recap had been? I was like, Holy Cow, I knew each day I was forgetting something, but couldn’t put my finger on it, but that was it… The RECAP! What dolt I had been forgetting to add that each day…

Well, the Data yesterday here in the U.S. wasn’t good, and makes you wonder why on earth did the dollar rally? Everything from Consumer Confidence to Pending Home Sales saw HUGE drops from the previous month… The only piece of data that was positive was the Case/Shiller Home Price Index, which went from +16.8% in May to 18.6% in June… That’s the fastest pace of House Price appreciation on the books, in history, folks… And there’s no Housing bubble?  And that positive data print is actually a negative data print if you are someone looking to buy a house right now…

The stupid Consumer Confidence saw a HUGE index number drop from 125.1 in July to 113.8 in August…  I’ve always said that this data print was nothing more than a pulse of the stock market… Well, the stock market hasn’t exactly been on fire lately, but it hasn’t exactly lost a lot of ground either, and so that makes me wonder what’s on the minds of these Consumers right now… I would think the Delta variant of the COVID Virus is the monster under the bed right now… 

If I were to be asked this by an interviewer, I would say that it’s the same thing I’ve been saying for months now, and that is, that we all know in our heart of hearts that there’s something wrong here in the U.S. and while we can’t put our finger on exactly the one thing that’s wrong, we all know that somewhere along the line there’s going to be debt reckoning…  Good Friend, Dennis Miller, sent me a picture yesterday of a gas station bill board, that said, “Has anyone tried turning off the U.S. and turning it back on?”….

OK… onto other things… I received a note from the great Mogambo Guru on Saturday, welcoming me back writing the Pfennig… See? The Mogambo sounds harsh at times in his notes, but he’s got a big heart!  I wish I had thought of him when I was thinking of who could write something for me when I returned… Of course I was completely satisfied with the stuff Frank Trotter wrote for me…  (Thank you Frank! ) But bringing the great Mogambo Guru out of retirement would be a hoot! 

Last Friday, Cartel Chairman Jerome Powell, was talking with reporters after he signaled that the Cartel’s monthly bond purchases would begin to be tapered by year end, and said, “while inflation is solidly around the Fed’s 2% target rate, “we have much ground to cover to reach maximum employment,” which is the second prong of the central bank’s dual mandate and necessary before rate hikes happen.”

Now, I’m going to take this apart because he has thrown me a softball without any arch to hit…  First of all how on earth does he believe that inflation is “solidly around 2%”?  The Fed’s key inflation gauge just showed a 3.6% increase in August the largest since 1991… So tell me, how does his math work out that 3.5% is solidly around 2%… Oh, wait! I see what went wrong here, he meant to say that inflation was solidly higher than the 2% target….  Not that I want to put words in his mouth… Or, better yet, maybe I should be his writer! 

And notice that he said that the Cartel’s dual mandate is inflation and employment? When is he going to stop being worried about the stock market? Well, at least we all know that he knows what the Fed’s responsibilities are, now we have to wonder why inflation isn’t getting attention…

Today’s Data Cupboard has the ADP Employment Report for August, and the so-called experts believe it will show that 600,000 people found jobs in August… I know one thing, that if that’s true, then there’s 600,000 more jobs that need to filled before the economy can grow… Now, whether or not they get filled is another story… There are hoards of people willing to get back to work, and then there’s hoards of people that just don’t want to go back to work… And for that not wanting to work we can give the credit to our illustrious leaders (NOT!) and the Cartel for keeping rates ultra low…

To recap… The dollar was bought on Tuesday during the U.S. session, although the buying didn’t recover the loss the dollar took overnight.  The U.S. Data was awful yesterday, except for the Home Price Index, which we all knew would be strong again… So, there was no reason for the dollar to rally, but it did… Chuck asks Ed Steer about suits being filed against the price manipulators, and Chuck realizes that he’s forgotten the recap for over a week! ‘’

For What It’s Worth…  Ok, this is an article that some will like and some will not, but it’s investor John Paulsen talking about Gold and other things like Bitcoin, and it can be found here: Is Bitcoin a Good Investment? Billionaire Paulson Says Crypto ‘Worthless’ Bubble – Bloomberg

Or, here’s your snippet: “Now though, more than 14 years after CDOs and credit-default swaps dominated everyone’s attention, Paulson is again seeing signs of excessive speculation.

Paulson, 65, is increasingly concerned about rising prices, he said in an episode of “Bloomberg Wealth with David Rubenstein.” The rapidly expanding money supply could push inflation rates well above current expectations, he said, and gold, which he’s backed for years, is primed for its moment.

His harshest words are for the hottest investments of this era. SPACs, on average, will be a losing proposition, while cryptocurrencies are a bubble that will “eventually prove to be worthless.”

“I wouldn’t recommend anyone invest in cryptocurrencies,” Paulson told Rubenstein, co-founder of Carlyle Group, on Bloomberg TV.

Paulson’s dismissal is sure to attract critics after digital assets vastly outperformed gold in recent years. His record since the “greatest trade” has also been mixed. He turned his hedge fund firm into a family office last year after assets dropped to about $9 billion in 2019 from a peak of $38 billion in 2011 and he found himself managing mostly his own money.”

Chuck Again…  it’s nice when I read about a famous investor that has the same thoughts as I do…

Market Price 9/1/2021: American Style: A$ .7340,  kiwi .7050,  C$ .7937, euro 1.1820, sterling 1.3755, Swiss $1,0905, European Style: rand 14.4366, krone 8.6957, SEK 8.6306,  forint 294.29,  zloty 3.8167,  koruna 21. 5179, RUB 73.29, yen 110.33, sing 1.3465, HKD 7.7770, INR 73.01, China 6.4608, peso 20.03,  BRL 5.1685, BBDXY 1,146.31, Dollar Index 92.63,  Oil $68.60, 10-year 1.32%, Silver $23.98, Platinum $1,014.00, Palladium $2,570.00, Copper $4.22, and Gold… $1,813.70

That’s it for today…  Cardinals & Reds play two today, as IDA rained out last night’s game…  And we’re supposed to see not as hot weather, so that means I’ll be outside watching the first game at least… I sat outside reading for about an hour yesterday, and then had to go inside, it was getting too hot! I love warm weather… not excessively hot weather, of which we haven’t had a ton of this summer here in the Middle of the country. Well, I haven’t fallen lately and that’s a good thing, and the brain fog seems to have lifted. I still get worn out too easily… My platelets were low last week, and so I have to go back to the lab next week for another blood draw to see if they’ve improved… I would imagine they will have improved, as it was too soon after getting out of the hospital to take a reading of them… I’ve been able to keep my blood sugars in check, and that’s a good thing! The Chicago Transit Authority, aka Chicago, takes us to the finish line today with their song, and one my faves: Beginnings… I hope you have a Wonder Dog Wednesday, and please Be Good To Yourself…

Chuck Butler

 

August 31, 2021

* Currencies & metals give back some of their Friday gains on Monday

* The overnight markets see more dollar selling… 

Good Day… And a Tom Terrific Tuesday to you! What a great weekend I just had with good friends on a lake in SW Missouri. The weather was beautiful, the meals were outstanding, and the company was fabulous! A GREAT BIG TANKS to hosts: Kevin and Lisa… I’m still working on trying to regain my strength, and I still feel like my balance is off, but those are signs that I had Covid… I wanted to point out that good friend, Dennis Miller, interviewed me regarding the Fed, for his weekly letter, that posted to his website: www.milleronthemoney.com . So, if you want to see what I had to say, check it out, and while you’re there, subscribe to his newsletter! Carlos Santana greets me this morning with his classic rock song: Evil Ways… 

Well, our 20 year war is over… The last of the American forces left on Saturday… I sure hope no one was left behind in that God forsaken land… My God Bless all the soldiers, alive or otherwise, while we tried to change the Middle East… We, as a country, spent more than $5.4 Trillion and lost more than 4,800 U.S. soldiers, and thousands of maimed soldiers returned home.. For what? Those people have been fighting each other for centuries, even our soldiers had to wonder at times what the hell they were doing there…  Even though the evacuation was a chaos… I’m glad we as a country are out of there!

Ok, sorry about that rant… you came here for markets and news on dolts… And I begin with in op-ed… sorry….  Well, the BIG NEWS last week was that I was wrong about Cartel Chairman Jerome Powell’s speech to the virtual attendees of the Jackson Hole Boondoggle. Recall I said that I didn’t think Powell would announce the framework for Tapering at this virtual conference. But, he proved me wrong, and did announce the framework for Tapering… I got to thinking about this last night, and to me Tapering is like a rate hike, even though Powell made certain that the markets didn’t take the Tapering talk as a rate hike… So, just like the inflation we’re experiencing, The Cartel says it doesn’t exist… And as far as Tapering equaling a rate hike, The Cartel says no it isn’t…  What a bunch of crock!

So, what did the currencies and metals do with this info? They rallied! Gold was up $24 on Friday, while Silver added 43-cents. The euro traded above 1.18 once again, and most of the currencies followed the Big Dog, euro, as it left the porch and chased the dollar down the street… But that was Friday… And with the long weekend to think about what the Cartel had said, the currencies and metals gave back some of their Friday gains on Monday… Gold lost $6.60 to close on Monday at $1,811.20, and Silver gained 2-cents to close at $24.1l… The euro lost a little ground, yesterday, but remained about 1.18..

In the overnight markets… Traders were back to selling dollars, as witnessed by the BBDXY, which closed yesterday at 1,147.54, and is trading at 1,144.67 this morning… The Eurozone received some news this morning that should make for an interesting European Central Bank (ECB) meeting on Thursday… Eurozone inflation hit a multi year high in July, and I don’t think I need to remind you that Germany, the largest member of the Eurozone, has a BIG allergy to inflation, as there are still people in Germany that remember the hyper-inflation era that roared its ugly roar during the Nazi era… And Germany is NOT going to sit by idly and wait for inflation to rise, like our Central Bank… 

Gold is working on gaining back its loss yesterday, in the early trading the shiny metal is up $3.60,  and Silver is up 6-cents…  I want to point out something that happened yesterday…  Silver ended the day 2-cents but that was more than 28-cents lower than its intra-day high… And Gold was down $6.60, but was up during the day… Clear example of price manipulation… But it is what it is… We take the good with the bad, and roll with the punches, us “Gold people”… 

Last week, St. Louis Cartel President, James Bullard, was on TV spouting off that the economy is very strong on something like that.. So I went to Twitter to see what David Rosenberg had to say about that, and here’s his Twitter post: “Jim Bull(ard) just said on CNBC that we have a “booming economy” on our hands. And here we are, set for a fourth straight month of negative real retail sales figures. In the past, such a losing streak only occurred in recessions.

I can always depend on David Rosenberg to set the record straight! Thank you Mr. Econoguy! OK… I had a dear longtime reader send me a note on Friday, asking me to address his list of questions  that included: Gold vs. Silver? Proportions?

Actual metal vs. paper ETFs/ “MarketSafe Bullion CDs/etc. Proportions, too?

Liquidity…both selling/buying?

Allocated vs. unallocated vs. at home in the safe?

Storage location…within the US or somewhere outside and untouchable?

The safest, most reliable, and easiest folks to deal with?

OK…  Gold Vs Silver?  I really own more Silver than Gold… But I don’t have a preference if it came down to I could only own 1…   Proportions?   I’ve long said, even when I was at EverBank, and I used to give presentations all over North & Central America, was that an investor should own 10-15% in metals, and when metals are rallying move the allocation up to 20%…

Actual metal VS paper ETF’s… Again I’ve always contended that I prefer to own physical metals, and not ETF’s… The main reason is simply that when push comes to shove, try getting your Gold or Silver out of an ETF…

Liquidity… both selling and Buying…  I’m thinking that when push comes to shove that you’ll have to either pay through the nose for Gold or Silver, or do without… Selling is different, and here I believe that there will always be a buyer…

Allocated VS Unallocated VS at home in the safe? ….  I’ve used the unallocated or pooled method of buying Gold & Silver through the years, it’s safe, and it’s cheaper than buying the allocated metals… Eventually though I had my pooled accounts converted to Allocated, paid the minting charge, and delivery charge, and had the metals sent somewhere for safekeeping.  If you own metals and you hold them in a safe in your home, please DO NOT TELL ANYONE that you have them in your house… Other than that, it’s fine to hold your metals in safe in your home… And you’ll find that when push comes to shove you won’t be able to get to the bank’s safe deposit box to retrieve your metals..

The Safest, most reliable, and easiest folks to deal with…  This one’s easy… Call my metals guru, Tim Smith at 1-800-926-4922… That’s the number for TIAA World Markets… And tell Tim I sent you there… I don’t receive a wooden nickel for sending you there, I just like it when we’re together and he says, “I had 10 more people say that you sent them”…

And since we’re on the subject of Gold, I came across this on Bloomberg.com… “Veteran investor Mark Mobius said investors should have 10% of a portfolio in gold as currencies will be devalued following the unprecedented stimulus rolled out to fight the coronavirus pandemic.

At this stage, “10% should be put into physical gold,” said Mobius, who set up Mobius Capital Partners after more than three decades at Franklin Templeton Investments. “Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed.”

Chuck again… Ok, I’ve got to wonder if he was reading some old Pfennigs and came across the one I wrote last May, when I said that all the debt every country sans Russia and Singapore, were printing, that a default of one country would lead to another, and that would devastate their respective currencies… So, do great minds think alike? Or was he reading some old Pfennigs?

The U.S. Data Cupboard late last week, had Personal Income and Spending on Friday… And while the Income portion of the data was strong, thus leading to the Gold rally, the Spending portion of the data was very weak, and that’s not a good thing for the economy that according to James Bullard is Booming… Yeah, and my first wife was a young Elizabeth Taylor!

This week’s Data Cupboard will finish out the week with the Jobs Jamboree for August.. Did you know that the Labor Participation Rate here in the U.S. has been going downward for the last 20 years? Longtime friend Bill Bonner is always telling his readers that the Great U.S. Empire began its fall from grace at the turn of the century… And I agree with him 100%… Think about all the bad stuff that has happened since the year 2000…

Before we get to Friday though…  We’ll see the Case/ Shiller Home Price Index for July today… I don’t believe that price of homes had begun to show some wear and tear in July, so I would think that this data print will show the housing bubble is getting bigger…

For What It’s Worth…  Ok, Ed Steer of www.edsteergoldsilver.com highlighted this story in his Saturday letter, so it’s still fresh… But it does smell like yesterday’s fish! It’s about the Fed’s go to inflation gauge showing how inflation hasn’t been this high since the early 1990’s and it can be found here: Key inflation gauge rises 3.6% from a year ago to tie biggest jump since the early 1990s (cnbc.com)

Or, here’s your Snippet: “An inflation measure the Federal Reserve uses to set policy rose 3.6% in July from a year ago, meeting Wall Street expectations but also tying the highest level in about 30 years.

The core personal consumption expenditures price index, which the Fed sees as the broadest measure of inflation, was unchanged from June, which was revised up one-tenth of a percentage point, the Commerce Department reported Friday. That 3.6% reading equaled the Dow Jones estimate and appeared to be the highest level since May 1991.

Including volatile food and energy prices, the index rose 4.2% year over year, up from 4% in June and the highest reading since January 1991.

The Fed has viewed inflation pressures this year as largely the result of temporary pressures, though officials in recent days have conceded that the situation may last longer than originally thought.

Atlanta Fed President Raphael Bostic told CNBC on Friday that business contacts in his region have told him they see inflation persisting beyond the near-term time frame.”

Chuck again… No matter what the Cartel says about inflation whether it’s here to stay or transitory, they’ll be wrong… You can bet your bottom dollar on that one folks!  And even if inflation proves to be short term, (I don’t believe that) the price increases we’ve seen will remain in place…

Market prices 8/31/2021: American Style: A$ .7328,  kiwi .7063,  C$ .7947, euro 1.1840, sterling 1.3777, Swiss $1.0945, European Style: rand 14.5517, krone 8.6424, SEK 8.5863,  forint 294.85,  zloty 3.8346,  koruna 21.5719, RUB 73.48, yen 109.93, sing 1.3434, HKD 7.7812, INR 72.87, China 6.4650, peso 20.08, BRL 5.1962, BBDXY 1,144.67, Dollar Index 92.48,  Oil $68. 44, 10-year 1.28%, Silver $24.17, Platinum $1,011.00, Palladium $2,582.00, Copper $4.25, and Gold… $1,814.80

That’s it for today… A little market news, a little housekeeping, and  little pointing out of the dolts for you today… Well, this is the end of August… I’ll talk to you next in September! This coming weekend will be Labor Day Weekend… A 3-day holiday weekend… I don’t know if I’ve ever told you this or not, but here goes… I absolutely love fried Chicken… And Saturday night I had the best fried Chicken that I’ve had in a very long time! Who would have thunk that a side of the road diner would have great Fried Chicken?  Oh well, you learn something new every day! Before I went on my mini-vacation last week I stepped on the scale and saw that I had lost 92 lbs so far in 10 months… I was stuck on 75 lbs for the last two months, and then suddenly the lbs dropped off me… It’s certainly not because I’ve been exercising! Now if I could find a way to lose 70 more lbs… that would be awesome! Van Morrison takes us to the finish line today with his classic rock song: Moondance… Well, it’s a marvelous night for a moondance with the stars all up in your eyes… I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

 

August 26, 2021

* Currencies & Metals rally on Wednesday… 

* Today looks like “one of those days” for Gold & Silver… 

Good day… And a Tub Thumpin’ Thursday to you! Noot! Noot! Thee’s a new chant that goes on a Busch Stadium, when rookie Lars Nootbar gets a hit, or make a good defensive play… the fans chant, Noot! Noot! When I first heard it on TV, I thought the fans were booing, and then realized that they wouldn’t boo a Cardinals player that was hustling.. Well, there were lots of Noot! Chants yesterday, when he singled in the 10^th inning to score the winning run…  Our future Hall of Fame catcher, Yadi Molina, announced a one year extension, so next year will be his farewell tour around the league… As I told you yesterday, I’m heading out of town on Friday, and won’t be back to write on Monday, so the next Pfennig will be next Tuesday…  The beautiful, and great voiced Dusty Springfield greets me this morning with her song: Son of a Preacher Man…

Well… the overnight markets on Tuesday night were leaning toward dollar buying, and as we began yesterday, the dollar was getting bought, the BBDXY, that started the day at 1,151.64, climbed to 1,153.00. but then a funny thing happened on the way to the forum… Durable Good Orders printed, and were negative -,1%, and the traders being traders looked at the number, and decided that they should sell dollars, and sell them they did!  Soon the BBDXY was falling through the 1,151 figure, and ended the day at 1,149.56… With the Dollar Index adding its two cents, falling to 92.87…

The knee jerk reaction to sell dollars yesterday, finally gave way to dollar buying in the overnight markets, as it was revealed that the Durable Goods Orders negative print was dominated by lack of sales of planes…  Take planes out of equation, and Durable Goods would have been positive…

Gold never could find a bid on Wednesday and fell $12.50, to close the day at $1,791.50, and Silver lost a whopping 1-cent on the day to close at $23.96…  Don’t know why Gold was sold on the day, other than 1. Profit taking or 2. Price manipulators…  I bet you don’t have to think too long about which one I would choose…

In the overnight markets last night… Well, as I just said, the dollar selling gave way to dollar buying in the overnight markets. The BBDXY, which closed yesterday at 1,149.58, is trading at 1,151.61 this morning. As I looked over the currencies, the only real slippage is saw in any of them was in the Japanese yen, so it must be a combination of little moves. 

Gold is starting the day down $9.40, so it looks like it could be one “those days” I hope not, but it sure appears to be one, as the selling in the early markets is pretty strong. Silver is down 31-cents this morning, so it appears to me that the price manipulators are going after both today… 

Sometimes these kinds of days just get me in real foul mood, but not today… I’m not going to let it happen that way, for I’m heading out of town tomorrow on a mini-vacation, and nothing is going to get in my way of thinking of having a good time! 

That brings me to this …..”If you purchased $10,000 of stock evenly divided among America’s top five defense contractors on September 18, 2001 — the day President George W. Bush signed the Authorization for Use of Military Force in response to the 9/11 terrorist attacks — and faithfully reinvested all dividends, it would now be worth $97,295. This is a far greater return than was available in the overall stock market over the same period. $10,000 invested in an S&P 500 index fund on September 18, 2001, would now be worth $61,613. That is, defense stocks outperformed the stock market overall by 58 percent during the Afghanistan War. Moreover, given that the top five biggest defense contractors — Boeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamics — are of course part of the S&P 500, the remaining firms had lower returns than the overall S&P returns. These numbers suggest that it is incorrect to conclude that the Taliban’s immediate takeover of Afghanistan upon the U.S.’s departure means that the Afghanistan War was a failure. On the contrary, from the perspective of some of the most powerful people in the U.S., it may have been an extraordinary success. Notably, the boards of directors of all five defense contractors include retired top-level military officers. Several commentators address this dynamic in the 2005 documentary “Why We Fight.” Former CIA contractor and academic Chalmers Johnson states, “I guarantee you, when war becomes that profitable, you’re going to see more of it.”…

Chuck again, I took this from this website: https://theintercept.com/2021/08/16/afghanistan-war-defense-stocks/

And do you know why, in my humble opinion that is, why the U.S. left many military hardware in Afghanistan to be taken over by the Taliban? I figure, that way the defense contractors, can make more military hardware to charge the U.S. for… which means we get to pay for it folks, us taxpayers…  Now doesn’t that just make you a little mad?

OK… onto other things on my mind this morning… As I was going through Twitter yesterday, I came across this from investment guru Pippa Malmgren… “Whatever your view on vaccines, how is it that we managed to come up with a COVID solution in 1 yr that usually takes 15 & why can’t we do that for other metaproblems like cancer, the pension crisis, energy scarcity, poverty etc. Focus = results, right? Or wrong?” – Pippa Malmgren on Twitter

Yes, I totally agree with her… And I’ve said it for 2 years now… As a cancer survivor, so far that is, this is near and dear to my heart, and that’s that! 

So, don’t forget to check in on the markets tomorrow after Cartel Chairman Jerome Powell gives his keynote address virtually I might add, to the masses tuned in… The markets believe or fear that he will use this keynote address to layout the framework of Tapering…  For the record, I don’t believe he will do that tomorrow, instead opting for the next Cartel meeting when he can have more emphasis on what he’s doing… 

But should he surprise Chuck and give the framework tomorrow, you had better watch out, because I don’t know if you recall the first Taper Tantrum when Ben Bernanke mentioned tapering a few years ago, but if you do, you can pretty much believe that it will be that way once again… And then it will be up to the Cartel to decide when they begin to taper, and if the stock market gets jiggy on the downside, he could announce at a later date that Tapering would be moved back, or postponed…

It appears that bond traders are already pushing the yield of the 10-year Treasury note higher, as the yield has gone from 1.22% late last week to 1.37% today… The bond traders fear that Cartel Chairman Powell will be laying out the framework for Tapering, and the bond traders are just getting ready for the trading that will come from another Taper Tantrum! 

The U.S. Data Cupboard yesterday, had the aforementioned Durable Goods Orders for July and they printed negative -.1%… Capital Goods Orders apparently wasn’t ready for Prime Time, and didn’t print…

Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, which have been falling each week for a couple of months now… The unemployment benefits that put into place during the pandemic come to an end very soon now, and so it would behoove those that have been sitting on their couch in the AC eating chocolate bon-bons, to start looking for a job, because the Goose that lays the golden eggs, has stopped laying eggs… 

Before we head to the Big Finish today, I wanted to talk about something that apparently got some readers very mad at me…  Last week I wrote about the need for people to get vaccinated… and that what set the people off on me… But they failed to read what I also said, and that is I believe that each and every person has the right to decide what they put in their bodies…  So… basically, if you are one of the people that don’t want to put the vaccine in your body, that’s your right… I never said for people to give up their rights and get vaccinated! So, before firing off mean letters to me, read everything first… please!

For What It’s Worth… Well here’s another report from Russ and Pam Martens from www.Wallstreetonparade.com  When reading this, think about as the next few years go by, just how deep in debt the U.S. will be, and then think about where will the financing come from when the rest of the world is “no mas”?    Anyway this article talks about the CBO’s Congressional Budget Office is talking about some very scary numbers for current debt in the U.S. and it can be found here: The Congressional Budget Office Is Forecasting U.S. Debt Levels Not Seen Since World War II as GDP Forecasts Dim (wallstreetonparade.com)

Or, here’s your snippet: “The most recent Congressional Budget Office (CBO) forecast is projecting government debt levels in the U.S. not seen since World War II. According to a CBO report released on July 21:

“After all the government’s borrowing needs are accounted for, debt held by the public rises from $21.0 trillion at the end of 2020 to $35.8 trillion at the end of 2031 in CBO’s baseline projections. As a percentage of GDP, debt at the end of 2031 stands at 106 percent, about 6 percentage points higher than it was at the end of 2020 and nearly two and a half times its average over the past 50 years.”

As for the federal budget deficit as a share of GDP, things aren’t looking good there either according to CBO forecasts:

“CBO projects a federal budget deficit of $3.0 trillion in 2021 as the economic disruption caused by the 2020–2021 coronavirus pandemic and the legislation enacted in response continue to boost the deficit (which was large by historical standards even before the pandemic). At 13.4 percent of gross domestic product (GDP), the deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year.”

Growing levels of national debt and deficits are never good news but they are particularly troublesome when the rosy forecasts for GDP growth this year have started to dim as a result of the economic hit coming from the upsurge in the Delta variant of COVID-19.

On August 19, Goldman Sachs reduced their GDP estimate for the third quarter from a robust 9 percent to 5.5 percent. Goldman Sachs cited Delta’s impact on reduced consumer spending on “dining, travel, and some other services” as the reason for their sharp cut of 3.5 points from their earlier GDP forecast.

At the same time the U.S. is witnessing a downward trend in economic activity, there is a stark, rising trend in corporate debt levels in the U.S. According to Federal Reserve data, as of January 1, 2021 corporate debt (including debt securities and loans) stood at an historic high of $11.169 trillion. (This excludes debt held by financial institutions.)”

Chuck again… All I’m going to say here about this is, that a friend of mine that’s a doctor, told me once that whenever he asks his patients how much alcohol they consume, he takes whatever the patient tells him and doubles it…. Well, a similar thing can be said about the CBO debt projections, and that whatever they say, I usually about 25-40% more…    Got Gold?

Market Prices 8/26/2010: American Style: A$ .7256,  kiwi .6969, C$ .7926, euro 1.1761, sterling 1.3726, Swiss $ 1.0902, European Style: rand 14.9305, krone 8.8137, SEK 8.7083,  forint 296.60,  zloty 3.8911,  koruna 21.7175, RUB 73.84, yen 110.16, sing 1.3531, HKD 7.7867, INR 75.04, China 6.4748, peso 20.32,  BRL 5.2375, BBDXY 1,151.61, Dollar Index 92.98,  Oil $67.47, 10-year 1.37%, Silver $23.65, Platinum $995.00, Palladium $2,462.00, Copper $4.22, and Gold… $1,782.10

That’s it for today, through to next Tuesday… Man next weekend is Labor Day Weekend! Where did the summer go? Kids here have been back to school since Monday, and the summer is coming to a close… Long time Readers will recall me talking about the Butler Annual Labor Day BBQ, and how much I cooked for it… Well, unfortunately, I had to cancel last year’s BBQ, and as it comes up on the calendar this year, I had to cancel this year’s BBQ too… For fear that I wouldn’t have the strength to deal with everything I do… I guess I’ll have to change the name of it to the Butler sometimes Annual Labor Day BBQ!  Next year, maybe the Covid thing is in our rear view mirrors too…   I’ll still be having the Big Green Egg working overtime that weekend, for any family or friends that want to stop by… I go to see my oncologist this afternoon… The hospital here did a heart check on me while I slept last night… the monitor that resides in my bedroom, contacts my pacemaker, and gets the stored information, and sends it to the cardiologist… I don’t have to go into the office for that!  Pretty cool, eh?  Ok, time to hit send… Credence Clearwater Revival takes us to the finish line today with their song: I Put A Spell On You…  I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

 

 

August 25, 2021

* Currencies & Metals have small rallies on Tuesday

* But Currencies & Metals get sold in the overnight markets… 

Good  day… And a Wonderful Wednesday to you! Man-o-man, my beloved Cardinals can’t seem to stop stepping on their on toes… I sit there watching them and shaking my head in disbelief that my once proud and ever present team in the playoffs, can’t seem to hit their way out of a wet paper sack… Injuries, which all teams have, have definitely played a part in their demise this year, but I don’t get how other teams, work their next man up, to win, and we can’t…  Oh, well, as the Chicago Cubs fans said for years, “wait till next year”….  I’m heading to SW Missouri, NW Arkansas this weekend to spend a weekend with good friends on Bull Shoals Lake… There’s a picture out there somewhere of me at age 5 holding a hangar of fish that my dad had caught while fishing in Bull Shoals Lake… Joanie? Terri? Do you have that picture?  Oh, well… time to move on… The Marshall Tucker Band greets me this morning with their song: Can’t You See?

Well, the ambush of the dollar on Monday had little follow up that night in the overnight markets, and yesterday, while the dollar slipped more, the intensity of the selling of dollars has waned from Monday, and that has me concerned… OK, I’m not THAT concerned, but a little concerned…  The BBDXY started the day yesterday at 1,151.18 and ended the day at 1,149.79, so there had to be some currencies that were rallying VS the dollar. For what it’s worth, I really couldn’t find them… The euro seems to be a tight trading range since rallying on Monday, and the Petrol Currencies have had muted rallies to go along with the recent run up in the price of Oil…  The old Dollar Index which I still chart in the Market prices roundup, started the day yesterday at 92.96, it’s first dip below 93, in about 10 days, and the Index ended the day at 92.89, so… this index tells us more of what really went on yesterday, and that was there was some dollar selling, but not a lot…

Gold lost $2.50 on the day yesterday. At one point in the day Gold had rallied to $1.810.00, but then profit taking set in and it ended the day down $2.50, at $1,804.00. Silver had a better day than Gold, and gained 24-cents to close the day at $23.97… I’ve not talked about inflation in a while…  It’s still strong here in the U.S., and one of the things keeping inflation at its current level, is the strong dollar… I’ve explained this many times in the past, but what the heck, here we go again…  Robert Rubin back in the 80’s used to remind the markets all the time that “A strong dollar was in the best interest of the U.S.”  He wasn’t saying that to help our manufacturers that sell overseas, he was saying that to remind traders that inflation can’t get into the country, with a strong dollar…  You see, with a strong currency, a country doesn’t import another country’s inflation…

I went through all that to talk about how prices of just about everything are higher than they were at this time last year… And just for fun… I’ll show you some of these price increases. These numbers were as of the end of June….  Year on year price increases… Car Rental +87.7%, Used Cars +45.2%, Gas +45.1%, Hotels +16.9%, Bacon +8.4%, Fruit +7.3%, Fresh Fish +6.4%, and Milk +5.8%…   Now how’s that for an update on inflation?  Crazy to think that inflation is so strong, but the price movement upward for Gold is being held back…

In the overnight markets last night…. the dollar buying returned, as represented by the BBDXY, which closed yesterday at 1,149.79, and is trading at 1,151.64 this morning… Only the Petrol Currencies have held their ground VS the dollar, as the Russian ruble is trading back below 74, and ever since the Norwegian krone rose above 9, it has rallied to trade below that figure…  The Canadian dollar/ loonie isn’t participating in this Petrol Currency rally, as I believe traders are punishing the loonie for the country’s Covid problems… 

More signs of dollar buying last night is shown in the the price of Gold, which has dropped  by $9.20, and Silver is down 12-cents in the early trading today…  Yesterday, as I said above, Gold had rallied to $1,810, and then it closed at its 200-day moving avg. Obviously, the early trading loss this morning has take Gold back below its 200-day moving avg.  Oh well, the price of Gold doesn’t really matter to me, as I’m not looking to sell my Gold! I just like to see it trade at its true value, without manipulation… 

Long time reader, Bob, sent me an article that I want to highlight, it’s about how Russia’s economy has nearly recovered to pre-pandemic levels…  Let’s listen in to what their leader is saying about this report: “The Russian economy is nearing its pre-Covid-19 pandemic level, President Vladimir Putin said on Sunday at a meeting with representatives of the United Russia party.

“Practically, with the exception of some things that specialists should pay attention to, [Russia’s economy] has generally been restored to the pre-crisis level,” Putin stated.

The thing that has Putin concerned though, is the high rate of inflation, which is 6.5% in Russia… So, even a country like Russia has the same problem as the U.S. and that is with inflation so high, their respective central banks need to hike rates, but that could hurt the nascent economic growth of the two countries… I’ve long said that the Russian Central Bank Gov. is the best in the world, and I have faith that she’ll do the right thing, which to me is to raise interest rates…

OK… In recent days, I’ve wanted to talk about something that kept alluding me…  I would sit for a time and try to think about what I wanted to talk about, but it just wouldn’t come to me… Until… I was reading Bill Bonner’s daily diary and he mentioned something that triggered my mind into actually coming up with what I wanted to talk about…  For the record this is what Bill had to say on 8/23: “This new souped-up “stimulus” program will have no better success than the previous ones. More zombified than ever, by fake money and real debt, the economy will slow.

And this “stagflation” will bring more discontent… more spending… and more inflation.”

And now for what I wanted to talk about… And that is how the U.S. keeps coming up with these stimulus plans, like they are on a shelf and they can just take them off the shelf and use them…  Now, I’m going to call on all the long time readers of the Pfennig to confirm this, but back in the 90’s and even into the 2000’s, I used to write about how Japan had issued another Budget adjustment, and stimulus plan for their economy that was mired in a long drought…   And none of them worked! And then remember when I used to use the lyrics by the Vapors, “I’m turning Japanese, yes, I really think so”…  But only instead of the word, “I’m”, would change it to We’re…  And now here we are at least 20 years later, and we, as a country are still following the Japanese to an economy that has no chance of growth…

Oh I hear you saying, but Chuck, the U.S. has a 6% GDP this year….  And to that I will point to the fact that the 6% GDP is like a castle built on sand… One good crashing wave, and the castle is wiped out, just like the 6% GDP…   It’s built on fake money, fake stimulus, fake illusions about our future, and fake banking institutions…. 

And then this headline article that appeared on Bloomberg.com, talked about how the Fed was decrying the wealth gap that they helped perpetuate…  Here’s a snippet from the article: “Federal Reserve officials often decry the unprecedented disparity between the wealthy and poor. But they usually avoid mentioning the direct role they have played in widening these financial disparities over the past few decades.”

That’s our Central Bank,,, drawing attention to something, but not doing a darn thing about it… I was surprised that in the article that the Cartel didn’t say that the wealth gap was “transitory”… HA!

Long time readers know that I’m no fan of our Central Bank…  It is my contention that they should not be in charge of setting interest rates, that the markets be responsible for that.  We would have more markets driven interest rates, and not interest rates that are arbitrarily set by a group of economists that we don’t vote on to sit on the FOMC….  I’m just saying…

So.. this Friday is the day that Cartel Chairman Jerome Powell will speak virtually I might remind you. And in recent days, I’ve read many opinions that think that this is the day that Powell, will lay out the framework of Tapering the Cartel’s bond buying…  I’m still of the opinion that I don’t believe he’ll do that on a virtual network, as it loses its emphasis…   and to add to that, was this Tweet from David Rosenberg…. “FOMC… In discussing the uncertainty and risks associated with the economic outlook, many participants remarked that uncertainty was quite high, with slowing in progress on vaccinations and developments surrounding the Delta variant posing downside risks to the economic outlook.”

Now if that sounds like a unified Central Bank in announcing Tapering, I’m not seeing it… or as the old time saying goes… I’m a monkey’s uncle! 

The U.S. Data Cupboard yesterday, had Existing Home Sales, and for the info on that print I turn to Dave Gonigam of the 5 Minute Forecast: “new home sales — which rose 1% from June to July, more or less as expected. Year over year, that’s down 27.2%; gone is the pandemic buying frenzy that began when 30-year fixed mortgage rates fell below 3% for the first time.”

Today’s Data Cupboard has the Durable & Capital Goods Orders for July… And in the frame of what I talked about yesterday, regarding recent data prints disappointing the markets, I would think that Durable Goods Orders will keep the disappointing prints going… As far as Capital Goods Orders, this data has been changed so much, that I can’t get a reading on what’s going on here…

For What It’s Worth…  Looking through the news stories, like I do every morning, while drinking a cup of coffee, I came across this article that features legendary investor, Jeff Gundlach, and I knew in an instant that this article was a FWIW article, for in it Jeff Gundlach talks about how the U.S. doesn’t care if the U.S. loses the Reserve Currency status for the dollar, and it can be found here: Legendary investor Jeff Gundlach says the US is running its economy like it doesn’t care if the dollar loses its status as the world’s reserve currency | Currency News | Financial and Business News | Markets Insider (businessinsider.com)

Or, here’s your snippet: “Billionaire investor Jeffrey Gundlach told Yahoo Finance in a video interview on Monday that the US is running its economy like it doesn’t care if the dollar loses its global reserve currency status.

The DoubleLine Capital founder and CEO reiterated his long-held view that the dollar is going to go depreciate further versus peers the next few years, blaming the US’s current economic policies for the situation.

“We’re running our economy in a way that is almost like we’re not interested in maintaining global reserve currency status,” Gundlach said.

The investor – who has been nicknamed the “Bond King” from calls he’s made on the US fixed-income market – explained that in the aftermath of the pandemic, the strongest economy “by far” has been China, not the US.

While the US economy rebounded by consumption, a lot of the consumption went straight to China, he said. In fact, Gundlach said China’s economy is growing at such a rapid pace some economists are estimating it will become the largest in the world by as early as 2028.

“China’s made no secret of the fact that they want to be a global player and have at least a seat at the table of global reserve currency status,” he said, adding that China has “made no secret of the fact that they want their military to be dominant, maybe the biggest in the world.”

Combine this with the fact that the US is “growing debt like crazy,” and it’s clear the dollar is headed towards losing its reserve currency status, Gundlach said.

In a July interview, the investor said the dollar is “doomed” in the long term, but it will be stronger in the short-term.”

Chuck again….  Man, Mr. Gundlach sure got that last call. at least the first part, bang on! I’ve said that the U.S. doesn’t value the dollar like it should be. considering its used all over the world… They keep debasing the dollar, by keeping interest rates below inflation rates, and they keep printing more dollars thus rendering the existing stock of dollars, less valuable… 

Market prices 8/25/2021: American Style: A$ .7250,  kiwi .6947,  C$ .7938, euro 1.1738, sterling 1.3718, Swiss 1.0935, European Style: rand 14.9587, krone 8.8496, SEK 8.7087,  forint 296.88,  zloty 3.8941,  koruna 21.7348, RUB 73.87, yen 109.90, sing 1.3542, HKD 7.7842, INR 74.15, China 6.4331, peso 20.24, BRL 5.5352,  BBDXY 1,151.64,  Dollar Index 93.05,  Oil $67.75, 10-year 1.30%, Silver $23.85, Platinum $1,003.00, Palladium $ 2,528.00, Copper $4.23, and Gold… $1,794.80

That’s it for today… It’s a hot one…. Like seven inches from the midday sun… A heat wave has taken over the Midwest, but as I think about this, it IS August, and it IS supposed to be hot! I recall a week when I was a young man where the temp went over 100 every day… And we didn’t have Air Conditioning to stay inside and play video games… In fact, I was a catcher in my early days of playing baseball, and we wore the old wool baseball uniforms… And we played a game during that week where temps went over 100… I remember being just fine, during the game… I would pay good money to watch some young kids do that today without all their whining, and complaining! OK… enough of that! Soft Cell takes us to the finish line today with their song: Tainted Love…  “sometimes, I feel, I’ve got run away, I’ve got to get away, from the pain you drive into the heart of me”…   I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

 

 

August 24, 2021

*Currencies & metals kick sand in the dollar’s face

* What’s going on at the Cartel?

Good Day, and a Tom Terrific Tuesday to you!  Well, my pre event excitement did not fail me yesterday… You may recall me telling you about an event I was going to with son Andrew last night… It was fabulous!  Well worth the money I paid to attend the event, that’s for sure!  The Cardinals know how to stage an event like last night, it’s all top notch, the way the organization is perceived by the public to be… I’m still a little giddy this morning about it… Chicago greets me this morning with their song from their sappy phase: Hard To Say I’m Sorry…  After the great guitarist and singer, Terry Kath died, Chicago depended on their bass player, Peter Cetera, to write and sing most of their songs, and they took on Cetera’s mantra, of sappy songs… There were some good ones though, and this is one of them.

Well, I told you yesterday that the Good Witch Glinda had told the markets that it safe of come out, and so come out they did! When I left you yesterday morning the BBDXY had fallen overnight from 1,158 to 1,155. And it didn’t stop falling throughout the day yesterday… By the end of the day, the BBDXY was 1,151.91, down over 6 points on the day! And all of the currencies look a bit better this morning, after yesterday’s ambush of the dollar. 

The metals were also on the rally tracks yesterday. Gold traded up to $1,807 at one point in the day before seeing some profit taking to end the day up $16.  And Silver was up 60-cents on the day. Gold’s closing price on the day was  1,806.50, and Silver’s closing price on the day was  $23.72.  Now we need to see if this was a one and done, correction, or does it have legs? And today, is that day…

So what the heck happened? Did Traders finally wake up and smell the coffee? Did they finally see the rot on the U.S.’s vine, the debt they are getting ready to add to the total that is unsustainable already, or did they finally realize they had too many dollars on hand?  It’s probably a combination of all three, along with the stories about the Covid virus…

This from the good folks at FXStreet: “The dollar edged lower against all of its major rivals, as stocks recovered their shine. The coronavirus situation in the US seems to have worsened, which in turn, would mean continued financial support from the US Federal Reserve.”

In the overnight markets…. There really was not much follow up to yesterday’s ambush of the dollar. The overnight markets did see some dollar selling, but it was muted at best… The BBDXY this morning is 1,151.18, so down from its close, but not by the 6 point downward move is saw yesterday… Gold this morning is up 30-cents in the early trading, and Silver is up 9-cents…  So, I would say that the overnight markets didn’t really tell us anything… So we turn our attention to today’s U.S. session to see if there is follow up or if yesterday was a one and done… 

Well… the 3^rd time wasn’t a charm for those pundits that continue to go to the well with their calls that the stock market is going to collapse on “X” day… Yesterday, as I reported to you, was that day, and it never got off on the selling side, as stocks were up on the day.  I would think that pretty soon these pundits are going to become the new “Boy that cried wolf”…  And no one will listen to them, and when they cower and put their tails between their legs and like Puff The Magic Dragon, they will slip into their caves…   And that’s when all hell will break loose in stocks…  So, if you’ve procrastinated and failed to update or even put stop losses on your stocks, you got a reprieve for a day, now… What Are You Waiting For?

Regular readers will recall me repeating myself a lot saying that there’s something wrong here in the U.S. and I can’t put my finger on it….   Well, yesterday, in Dave Gonigam’s 5 Minute Forecast, he talked about what we do know is wrong… Let’s listen in: “The most recent spate of U.S. economic data is “missing expectations at the highest pace since the depths of the pandemic,” says the Financial Times.

“Several closely watched US economic measures published in recent weeks have come in well below Wall Street expectations, indicating the powerful economic growth from the depths of the COVID crisis may be losing steam.”

Chuck again… Since I was on vacation, and then an extended stay, I really wasn’t following the Data Cupboard, and it appears from what Dave wrote about, I should have been… So this week’s Durable Goods and Capital Goods Orders, along with Personal Income and Spending will get further scrutinization from the markets…  That might mean more down days for the dollar, at least that’s how I see things playing out with the Data Cupboard…

You know there are many things that get me riled up, but chief among them is the Fed or Cartel which is really a more suitable name for them… The Fed Reserve is a misnomer. They might as well be called:” Larry’s Fly By Night Roundtable of Idiots”…    But I digress….. What I wanted to talk about is this report I read yesterday from Russ & Pam Martens of www.wallstreetonparade.com  In the report the Fed has dropped mentioning the repo loans that the Cartel has been making since last September, to Congress….  Apparently the Cartel doesn’t want Congress to know how weak the banking sector is that they need daily loans from the repo outlet…

I thought that Cartel Chairman Jerome Powell had made it clear that the Cartel would be transparent with their decisions…  I guess not, eh? I find this omission of who got what, to Congress is a point of contention, and Congress needs to grow some intestinal fortitude and call the Cartel out for this omission. 

And that brings me to another group of people that tick me off more than they should… Congress… If the Cartel had the information in their last report to Congress, and then removed it, wouldn’t it behoove Congress to ask, Where did it go? And why isn’t it here? Are you attempting to hide something from us, Mr. Powell?  I find it very interesting that whenever Powell is grilled by Congress that he states that the Fed can only make emergency loans with the approval of the Treasury.  Hmmm… Do you recall him asking for permission to do these repo loans from the Treasury?  It’s all a bunch of bunk folks… fake this fake that, and now the Cartel is leaving out the repo loan information as to who receives what dollars….   I find this to be embarrassing, not as embarrassing as the leaving of Afghanistan, but very embarrassing, our G-7 allies just be laughing out loud at us…

OK… time to go on to something else before I bust another blood vein and cause another hematoma to form! Hey! How about this… Forbes is reporting that Social Security recipients may see an increase of 6.2% this year in the COLA (cost of living adjustments)….  I find that very difficult to believe don’t you? Well, as my good friend Dennis Miller of www.milleronthemoney.com often says… Whenever we get a COLA positive adjustment, we also see the premiums for Medicare increase, thus leaving us right back where we started…  

And then there’s this… In a Business Roundtable’s 2019 “statement on the purpose of a corporation” was hailed as a revolutionary moment for capitalism: 181 CEOs were pledging to run their company for the benefit of all stakeholders, not just shareholders.

Two years later, though, Harvard researchers find that the bosses who signed that document haven’t followed through.

What a crock… These business leaders have no idea what it takes to run a good, profit making, community aware, company…  I’m just saying

The U.S. Data Cupboard yesterday had the ISM Manufacturing Index, and it kept in line with what I was talking about above… The Index was expected to come in at 63.1, but it came in at 61.2, a real disappointing print, even though it’s miles above the 50 level that is the line of demarcation between expansion and contraction…

Today’s Data Cupboard has New Home Sales for July… not a market mover…  So, we’ll move on for these are not the droids we’re looking for..

For What It’s Worth… Ok, I’ve done my  best to highlight each of these cases that involve metals dealers being brought to justice for manipulating metals… Well there was yet another decision to bring traders of JP Morgan to trial for spoofing, which is a way to manipulate metals pricing. And that article can be found here: Ex-JPMorgan metals traders must face racketeering charges: judge | Reuters

Or, here’s your snippet: “ A federal judge in Chicago said four former JPMorgan Chase & Co employees must face charges including racketeering in a case accusing them of manipulating the prices of precious metals futures.

U.S. District Judge Edmond Chang’s ruling on Tuesday paves the way for an Oct. 19 trial in the case, which is the U.S. Department of Justice’s most aggressive attempt so far to police commodities spoofing, a tactic involving placing orders to move prices and quickly cancelling them.

Prosecutors allege former global precious metals desk head Michael Nowak, traders Gregg Smith and Christopher Jordan and salesperson Jeffrey Ruffo manipulated the prices of gold, silver, platinum and palladium between 2008 and 2016.

Attorneys for Jordan and Nowak and a spokesperson for the DOJ declined to comment on Wednesday. Counsel for the other defendants did not immediately reply to requests for comment.

In his ruling, Chang rejected the defendants’ argument that the allegation that they engaged in a single spoofing conspiracy was not enough to support the racketeering charge.

Chang also allowed the other eleven charges to stand, including market manipulation, spoofing, conspiracy, and commodities and wire fraud. He cited other spoofing cases in which judges allowed prosecutors to pursue those charges.”

Chuck again…  as I’ve said before, this spoofing stuff is bad, but it’s not the real meat that hangs on the tenterhooks… That is reserved for the short paper trades… And until the CFTC, decides to get it’s head out of its arse, we will continue to see paper short trades dominate price manipulation… But racketeering charges? That’s harsh folks, and I say they should throw the legal book at these guys, and send them to jail! 

Market prices 8/24/2021: American Style: A$ 7245,  kiwi .6947,  C$ .7920, euro 1.1743, sterling 1.3721, Swiss $1.0965, European Style: rand 15.0638, krone 8.8512, SEK 8.6932,  forint 297.63,  zloty 3.8965,  koruna 21.7373, RUB 74.08, yen 109.65, sing 1.3558 HKD 7.7894, INR 74.05, China 6.48.33, peso 20.29, BRL 5.3792, BBDXY 1,151.18, Dollar Index 92.69,  Oil $66.59, 10-year 1.26%, Silver $23.81, Platinum $1,021.00, Palladium $2,541.00, Copper $4.22, and Gold… $1,806.80

That’s it for today… I still can’t say enough about the event I attended last night… I was lucky to have seen both Tim McCarver and Ted Simmons play in the Cardinals organization in the prime of their careers, and brother were they ever ball players! There was a lot of walking involved throughout the stadium last night, that had me so worn out when I got home that I immediately took my Chemo and other medicines and went to bed! I was plum tuckered out! I did get to shake Ted Simmons’ hand and tell him who I was, and where he might remember me from, and he smiled at me and said, “yes, look at us, we all grow up”…  My former colleague, Tim Smith, which also happens to my metals guru, recently obtained for me a Ted Simmons Bobble head for my bar…  I’m hoping I bounce back today from all that walking last night, but so far, I feel like I’m really dragging the line… And so… Mitch Ryder and the Detroit Wheels take us to the finish line today with their song: Devil With The Blue Dress…  If Mitch Ryder can’t get me going, then it’s going to be a long day… I hope you have a Tom Terrific Tuesday, and please Be Good to Yourself!

Chuck Butler