Author: admin

April 29, 2021

* Powell leaves traders nothing concrete to trade on

* The price of Oil jumps higher! 

Good Day… And a Tub Thumpin’ Thursday to you! I really feel like going out and doing some Tub Thumpin’ myself today… But I have a cable guy coming this afternoon, so there goes that idea out the window! Maybe tomorrow, when the sky clears, the rain stops, and the sun comes back out, it would be a better day to do some Tub Thumpin’! Two years ago, I dumped the cable and went to YOUTUBE TV, because we could get it in Florida too… Well, that was all fine and dandy, until the YOUTUBE folks got in a peeing contest with Bally’s Regional Sports, who carry my Cardinals and Blues games… Now I have to jump through hoops to watch them both… But not any longer! I’m going back to cable, today… Speaking of my Cardinals… their bats went into a funk again last night, and they lost….Steely Dan greets me this morning with their song: Black Cow… “so drink your big black cow and get outta here”…  

Well… what a turnaround by the currencies and metals yesterday! And wouldn’t you know it, the press conference that saw Cartel Chairman, Jerome/ Jay Powell tell everyone that while he thinks the economy is improving, the Cartel is going to keep rates at zero, and keep the monthly purchases of $120 billion in Treasury and mortgage-backed bonds going for a while longer when he’s sure the economy has recovered, and the COVID cases are dwindling to near nothing, got everything going… So, when will that be? Only the Shadow knows…

So… yesterday morning pre-FOMC, the Dollar Index was 91.05 and had risen throughout the previous night, but… once Jay Powell’s words were heard, the dollar selling began again in earnest! The Dollar Index dropped to 90.60 at the close of the day, and the euro rose through the 1.21 handle, to 1.2131 when U.S. traders handed over their books to the Asian traders, last night…  But the currencies weren’t the only beneficiaries of Powell’s words…  Gold, which in the early trading yesterday was down $5.20 ended the day up $5.70, which makes that a $10.90 turnaround… And Silver which was down a hefty 43-cents in the early trading ended the day only down 7-cents…  So, Gold closed Wednesday at $1,782.50, and Silver closed at $26.29…

The markets don’t like unknowns, and I’ve explained this before many times in the past.. They like to trade on something solid… not something with shadows, and unknowns! And the unknown was left out there for traders to figure out yesterday, by Jay Powell… There’s just too many questions out there like what happens if….  the economy stumbles?  And how will the Cartel explain their yield curve control while they are selling bonds?  And will the first rate hike be 25 BPS or 50 BPS?  And there are more to talk about, but you get the drift, there are unknowns, and traders don’t like unknowns! Period!

Earlier this week I said that if the euro trades above the 1.21 and keeps moving higher through the level, that we would have a good sing that the dollar is preparing for a long ride on the slippery slope…

The Overnight markets… there  was little movement in the currencies, and the euro begins the day at 1.2130. The Dollar Index weakened to 90.57 overnight, and the A$ has climbed to 78-cents! Gold is down $4.90 in the early trading today, while Silver is up 18-cents…  The overnight traders didn’t seem to think that FOMC was a BIG DEAL… So be it… They’re finished for the week… So, I’m sure they didn’t want to make an large moves and have them hanging around all weekend… 

The price of Oil has really jumped  higher this week and the last 24 hours haven’t changed that mode… The price of Oil is trading with a $64 handle this morning, and this news has awakened the Petrol Currencies… The Canadian dollar has risen to 81-cents, and the Norwegian krone is pushing stronger too this morning. And this rise in Oil price won’t help all those that think that inflation is nothing to worry about… 

Things are looking better in the Eurozone economy too… So, it’s not just a sell dollars/ buy euros trade, it’s a sell dollars to buy euros because they have something going for them right now… German 10-year Gov’t Bonds (Bunds) hit their highest yield in 2 months, and they appear to be heading higher… Which in my opinion could be a reason for buying euros right now…

Speaking of Gov’t Bonds… Globally there are more $18 Trillion in negative yielding Gov’t Bonds outstanding… That means some knucklehead bought a negative yielding bond, and instead of getting paid interest, he has to pay interest to own the bond…  OOh, that sounds too good, I want some at the market, I can’t get enough of them!  NOT! AS IF! To me, any country that sells negative yielding bonds, has no regard for their currency… The U.S. doesn’t sell their bonds with negative yields, but after owning them, and the buyer takes into consideration the inflation rate, then these too are negative yielding…

Last May, almost a year ago, I told you that it was my belief that the debts of the world would cause a collapse of the financial system that we all know and love… And that would bring about a default or two or three or more of countries and their debts… I included the U.S. into this mixture of defaulting countries… I still believe that this is all going to come down the pike and when it does it’ll be like an avalanche… Too much Debt… Too much fake money… Too much willingness to deficit spend more, and no willingness to stop, will be the icing on the cake, folks…

I was reading a report yesterday regarding the food delivery chain, and the writer expressed the belief that by the end of this coming summer, food stores will have empty shelves… The supply chain has been so disrupted, and getting it back in order is taking much longer… Now that’s some scarry stuff, eh? I don’t want to be a Chicken Little but come one, did we really think you could shut down everything and then just start it back up without hiccups? I’m just saying…

OK, getting back to Gold for a moment… The good folks at GATA sent me a note yesterday, and they were talking about technicals. They admit that they are fundamentalists, but when the technicals line up with the fundamentals, like they are now with Gold, a HUGE rally could be in store…

Basically, Gold has been in a downtrend since reaching $2,100 late last summer, and more recently, Gold has been range bound, $1,700 to $1,800… But now.. “The chart has provided some clues, however, that suggest the bulls are finally regaining traction and the market is potentially gearing up for a breakout above $1,800 in the coming weeks.” -GATA 4/28/21

The U.S. Data Cupboard today has the usual Initial Weekly Jobless Claims, which have really been on the downward slope the last two weeks… We had a false dawn with the Claims dropping about 2 months ago, and then they shot back above 700,000 for a few weeks in a row. So, it’s anybody’s guess what this number will be today…  In addition, we’ll also see a final revision to 1^st QTR GDP, which should be a whopper!

Tomorrow’s Cupboard has March prints for Personal Income and Spending… Well, I guess we’ll see what people did with their stimmy checks, eh? It’ll all be here tomorrow… If I were a betting man I would bet that U.S. receivers of stimmy checks, banked the bonus from the Gov’t, or paid down credit card debt… Not many stimmy checks were taken down the store to buy a new big flat screen TV…  And the Personal Spending data for March that prints tomorrow, will be the big payoff on my bet! 

To recap…. The currencies and Metals had huge turnarounds yesterday, which came via Jerome Powell’s words in his speech following the FOMC Meeting…  He basically said that the Cartel will keep interest rates at zero, and continue buying $120 Billion in bonds per month, until the economy proves that it can stand on its own two feet, and Covid cases are nascent…  He hinted that if all things go as planned the Cartel would look to begin tapering their bond holdings/ purchases, in the 4^th QTR this year… There’s no guarantee that any or some of that will even come to fruition… So, dealing with unknowns is not currency traders’ cup-o-tea… so they sold dollars, turning around early morning losses in Gold and currencies…

For What It’s Worth… For many years now, I’ve told you dear readers that the way to end Price manipulation, is to demand delivery for all metals contracts… If everyone who bought Gold or Silver and bought it physical, took delivery, the COMEX would fall apart, and take with it the price manipulators… I’ve said that for years!  Well, Craig Hemke of the TF Metals Report, writing for Sprott, does a good job explaining what I’ve been saying for years and years, and it can be found here: Blog – The People Have the Power (sprottmoney.com)

Or, here’s your snippet: “There are many of us “keyboard warriors” who believe that the current fractional reserve and digital derivative pricing scheme is unfair and rife with fraud. There are also a handful of system apologists who claim that the current scheme is fair and equitable and that silver is abundant. Well, there’s one way to find out. Let’s do this.

If you regularly read these weekly columns, then you’ll recall this post from last week. If not, please read it now before you continue: A Time to Fight Back

In summary, it’s time to get to The Truth, and we the people have to power to uncover it. The pricing scheme has endured for decades, and the alchemy that drives it has left in its wake a system where no one knows for certain how much physical gold and silver exists with clear, undisputed title. Oh sure, if you own and hold physical metal, there’s no dispute at all. However, if you hold a futures contract, an unallocated account, or an ETF, all you hold is price exposure to an overleveraged system. This leaves you with an incalculable counterparty risk that you may not have even considered before today.

With this in mind, a grassroots effort to buy and hold physical silver took hold in late January and lasted into early February. The sudden rush of physical silver purchases drained the existing physical supply and created a stress in the just-in-time delivery system that the bullion banks maintain.

The effort was substantial enough that even the LBMA, in their Q1 silver report, admitted to a physical supply strain.”

Chuck again…Just think what could have been had the pressure remained on the COMEX for a few more weeks? We might be finished talking price manipulators!

Market prices 4/29/2021: American Style: A$ .7800,  kiwi .7263, C$ 8141, euro 1.2130, sterling 1.3956, Swiss $1.1007, European Style: rand 14.2446, krone 8.1728, SEK 8.3364,  forint 297.07,  zloty 3.7653,  koruna 21.2826, RUB 74.68, yen 108.98, sing 1.3253, HKD 7.7625, INR 74.07, China 6.4798, peso 19.98, BRL 5.4153,  Dollar Index 90.57,  Oil $64.94,   10-year 1.66%, Silver $26.47, Platinum $1,224.00, Palladium $3,008.00, Copper $4.52, and Gold… $1,776.60

That’s it for today… Things were looking good for a moment or two last night, as our Blues stomped their way back from  1-3 deficit to win 4-3, and while that was happening, the Cardinals were going ahead 3-1… But then the Cardinals, as I said above, lost… Let’s Go Blues! Day game at Busch today, wish I was going, but I can’t! UGH! Darn responsibilities! I have so many cable linescoming into the basement from the different providers I’ve had through the years… Charter, Dish, U-Verse, and finally no cable YouTubeTV… Yes, I used to have this big Dish on my rooftop, and to me the Dish delivered the best picture quality, but wind and rain was a real downer for the Dish… I don’t have any plans for the weekend, so I think I’ll really do some Tub Thumpin’ tomorrow! Yeah, that’s the ticket! And my first wife was a young Elizabeth Taylor! HAHAHAHAHA! John Lovitz cracks me up!  And this is the last Pfennig of April… When I talk to you on Monday, God willing and the Creek don’t rise, it’ll be May! R.E.M. takes us to the finish line today with their song: The One I Love…  “This one goes out to the one I love, this one goes out o the one I left behind”… I hope you have a Tub Thumpin’ Thursday, and follow that up with a Fantastico Friday tomorrow, and while you’re doing that, please take time to Be Good To Yourself!

Chuck Butler

 

April 28, 2021

* currencies see some slippage overnight

* Gold & Silver begin the day down… 

Good Day… And a Wonderful Wednesday to you!  Another beautiful day here, that will begin to be disrupted this morning, and rain and cooler temps will arrive, and stay until tomorrow afternoon… YUCK! April weather remains a crapshoot in my opinion… I ran across a cartoon yesterday that I read every day… Pearls before Swine…  And in it Rat is writing, and Goat asks him how long the rewrite will take, to which Rat replies, “my writing is perfect the first time, revisions are for sad little losers”… And that reminded me of my later years of writing at my old bank, and every day the Pfennig had to be reviewed by lawyers. You wouldn’t believe the things they wouldn’t let me say!  And I’m with Rat on this one… I’m just saying…  The Amazing Rhythm Aces greet me this morning with their song: Third Rate Romance… Interesting lyrics to that song, for sure!

Well, it was bound to happen some time… And yesterday, was some time… A day when the currencies didn’t see many bids, and they were offered but not by much… The Dollar Index rose from 90.81 in the morning to 90.90 at the end of the day… Still not much movement, and the euro remained well within spitting distance of 1.21, at the end of the day… Traders are still hiding under shells waiting for the FOMC to end this afternoon, and they get the latest set of lies, I mean of ideas from Cartel Chairman Jay Powell…  To me Powell’s press conference will be full of incorrect statements that border on lies to the American public… But, even though we didn’t have a say in who took over the chair of the Cartel, we have to deal with what his policies are….

Gold never found a bid yesterday either but… again the moves were small… Gold lost $5.20 on the day to close at $1,776.80. Silver found a way to gain a few shekels on the day, and closed at $26.35, up 7-cents on the day…   So, from what you can see with the Dollar Index move, and the Metals move, you will come to agree with me, that traders have gone on hiatus this week, so far, ahead of the FOMC meeting, which takes place this afternoon…

In the overnight markets… it appears the traders there woke up, and decided to buy dollars ahead of the FOMC… The euro saw some slippage, and the Dollar Index rose to 91.05, from yesterday’s close of 90.91… Gold ^ Silver continue to see nothing but sell orders, with Silver really seeing some selling this morning in the early trading… Gold is down $9.80 and Silver is down $43-cents to start the day. 

The U.S. President has announced a new $1.8 Trillion spending plan called the Family Plan, that he will explain will be a net zero plan because he plans to tax the rich…  More spending, more taxes… I’m at a loss as to how much more of this is going to be introduces to us, and shoved down our throats… I’m just saying… 

I can’t help but think that with all the talk of an infrastructure Bill, and a new Green Deal, and more stimmy checks, and a Family Plan, that Traders will be ready and willing to begin to sell dollars once they have heard Jay Powell speak and not say anything about tapering…  Everything else he has to say will be taken with a grain of salt, which is more than I would give him credit for! I read this morning that the markets are expecting Jay Powell to announce that the Cartel will begin tapering in the 4th QTR… The question I would have is what happens if things change before now and the 4th QTR? It’s not as if we don’t have any experience with things changing overnight! 

So, if the markets are expecting this announcement from the Cartel, that explains why bonds got sold off the back of a truck!  The yield on the 10-year Treasury rose from 1.58% to 1.64%. Remember in bonds, when yields rise, the price of the bond goes down, and vice-versa…  

Someone with a bigger mass of gray matter in their heads needs to solve this riddle for me… Riddle me this Batman…  The Cartel has implemented Yield Curve Control (YCC) to bring down the yields of Treasuries, so how’s that going to work (YCC), that is, when you begin to taper? (begin to sell the Trillions of bonds they own)  Ahhh, grasshopper, I would betcha a shiny quarter that the Fed Heads haven’t thought of that yet… 

Yesterday, I tried to spell out the proposed tax increases out for you, but in case you didn’t get it…  There was an article on www.zerohedge.com with some Q.&A’s… Let’s listen in:

Q: Put a 60% tax on capital investments and what happens to investment? 

A: Investment in new businesses will plunge.

Q: Put huge taxes at the state level and what do people do?

A: They move.

Q: What happens to neighborhoods, even states, when the wealthy flee?

A: Think Illinois

Chuck again… And I would add to the states, New Jersey, New York, and California…

OK… but you can’t say I haven’t warned you that this day would be coming for a long time now, right? I’ve said over and over again that this dance is gonna be a drag, no wait! I’ve said over and over again that this uncontrolled debt buildup is going to bring about higher taxes… And these tax increases by the Biden administration will be the first ones in 30 years!

Remember George Bush, in 1988 saying, “read my lips, no new taxes”, and then in 1991 taxes were raised?  Just a little history there for us this morning… Because there’s your last time 30 years ago that taxes were raised…  There are a good number of people in the working world that have never heard of higher taxes… Well, that’s all about to change!

Well, let’s talk about something else besides taxes… And inflation, and debt, Oh no! I can’t think of a single thing to say! Ok, how many of you thought I was serious that I can’t think of something to say? Longtime readers know all too well that, that’s not true!

So, did you hear that Russia & China’s plan to dedollarize is working?  Well, I have an article for you in the FWIW section today that talks about this dedollarization, and so forth, so you won’t want to pass that up and go to the Big Finish without stopping by the FWIW article first!! 

In the U.S. Data Cupboard today… The FOMC meeting comes to an end, and Jay Powell will hold a press conference afterward. That’s the Big Kahuna news item today… An FOMC Meeting… What has our lives become of when we’re looking forward to a FOMC Meeting?  I take that back, if things were different, this could have been an interesting meeting, and press conference, but since things haven’t really changed for over a year now, what else can you expect?

In yesterday’s Data Cupboard we had the Case/ Shiller Home price Index, and it showed exactly what I said it would show, that there was a huge price increase in housing this last year… 12% was the year to date figure for February… Just wait until the next couple of months pass bay and the price increases in building materials drive home prices sky high!

We also saw the stupid Consumer Confidence Index for this month of April, and it shot higher by a huge margin from 109.00 to 212.7!  Like I said, the unemployment bennies are great, the stimmy checks are great, the stock market is setting new highs all the time, life doesn’t get any better than this, for most people… But like I’ve said over and over again… They don’t ask me, my opinion, on what could go wrong… Or better yet, maybe they read the Pfennig, and know better than to ask me? As if! 

To recap … The currencies gave a some ground on Tuesday, but not that much, and Gold never found a bid and lost $5.20, but all in all the markets were quiet, and no big movers were on display, as traders continue to be on hiatus until they see the color of the FOMC’s meeting outcome…  The overnight markets didn’t bring about any major changes in trading, but we did see some slippage in the currencies, and that has Chuck scratching his bald head…  so we all have to wait for the outcome of the FOMC meeting today, and the press conference following.  Chuck goes a step further in talking about the new taxes that are coming your way… And there is more, as always!

For What It’s Worth… Ok, I gave you a teaser above on today’s FWIW article about how Russia’s plans to dedollarize are working, and getting people to notice, that life without having the dollar in the terms of trade and hogging all the shelf space of your currency reserves, is working… For Russia that is, and the article can be found here: Putin’s Bid to Ditch Dollar Picks Up as Exports Move to Euro (msn.com)

Or, here’s your snippet:” Vladimir Putin’s multi-year push to reduce Russia’s exposure to the dollar hit a major milestone as the share of exports sold in the U.S. currency fell below 50% for the first time.

Most of the slump in dollar use came from Russia’s trade with China, more than three-quarters of which is now conducted in euros, according to central bank data published late Monday. The common currency’s share in total exports jumped more than 10 percentage points to 36%, the data for the fourth quarter show.

Multiple rounds of sanctions and the constant threat of more to come have pushed Russia to find ways to isolate its economy from U.S. interference. The central bank has also stripped back its holdings of Treasuries in its international reserves, loading up on gold and euros instead.

The shift away from dollar trade with China accelerated in 2019 when oil major Rosneft PJSC switched export contracts for crude shipments to euros. Lots of mid-cap companies are now also seeking ways to reduce exposure to the U.S. currency, with many switching contracts to yuan or rubles in trade with China, according to Daniel Haindl, the co-head of FX & interest-rates sales at VTB Capital in Moscow.

“We also see that a growing portion of settlements between Russia and former Soviet countries is in rubles,” Haindl said.”

Chuck again… I know this doesn’t make you want to say hip hip hurray  for Russia, but it does tell you that the world will eventually come around to Russia’s way of thinking that the U.S. has not shepherded the dollar away from danger and potential collapse from so much debt, and money printing… And that Idea that many other countries could follow suit, realizing that they haven’t the need to hold so many dollars in reserve, and that idea scares the bejeebers out of me!

Market Prices  4/28/2021: American Style: A$ .7744,  kiwi .7214,  C$ .8063, euro 1.2069, sterling 1.3865, Swiss $1.0924, European Style: rand 14.3601, krone 8.2687, SEK 8.3795,  forint 299.60,  zloty 3.7993,   koruna 21.5114, RUB 74.90, yen 109.00, sing 1.3264, HKD 7.7624, INR 74.43, China 6.4813, peso 20.06, BRL 5.4390,  Dollar Index 91.05,  Oil $63.38,   10-year 1.64%, Silver $25.93, Platinum $1,218.00, Palladium $2,956.00, Copper $4.47, and Gold… $1,767.30

That’s it for today…  well I got another opportunity to go the Busch Stadium again last night with good friends Gus & Dianne… And I saw a great pitched game, and some timely hitting for once in a Blue Moon, for a Cardinals win! Then got home late last night, and I’m really dragging the line this morning… So, as soon as I hit send on this letter this morning, I’m going back to sleep!  There are times I’m so very glad that I’m retired! So, if I stumbled around this morning I didn’t mean to… My good friend Gus had been to the Blues game the night before and saw a winner, and then last night to the Cardinals game and also saw a winner, I told him he might want to contact those teams management, and lease himself out to games for a price! HA!  I got a Jack Buck statue (small) that has voice chip that has two of his most famous calls, last night at the game, this will fit in nicely with my Stan Musial statue I have on my back bar… The giveaways they have at the ball game these days are much better quality of things than they used to be.. .The Marshall Tucker Band takes us to the finish line today with their song: 24 Hours At A Time…  I shouldn’t be listening to this song, because I won’t be able to go back to sleep afterward!   I hope you have a Wonderful Wednesday, and I hope you will Be Good To Yourself!

Chuck Butler

April 27, 2021

* Currencies & metals gain small amounts on Monday

* Palladium reaches $3,000! 

Good Day… And a Tom Terrific Tuesday to you! 85 degrees in Florida is not the same as 85 degrees in Missouri… I know it took me quite a few years to figure that one out, but I did, and yesterday was a prime example of that… My Accuweather app told me it was 85, but, I was tempted to go inside and grab a sweatshirt! In another month, once the earth turns on its axis, I’ll be sweating in 85 degree weather here… Just not now…  Thanks to all who sent along a note about the Money Show Panel I was on last Thursday.. My good friend, Dennis Miller, called to tell me he compared my picture that appears on the www.dailypfennig.com site, and a picture he took from the zoom screen and he said, “holy cow, you have lost a ton of weight!”  Ok, the group Gallery greets me this morning with their 70’s hit song: I Believe In Music…  “I believe in song..” 

And I do believe in music, it can soothe your sorrows, or lift you up, or make you wanna dance, and sing along…  I bet I didn’t have to tell you that about me did I? HA!

Well, my fears about Traders taking a siesta to begin this week, until they see the color of the FOMC’s meeting, looks to be coming to fruition…  The currencies gained a little bit yesterday, the Dollar Index began the day at 90.88, and it closed at 90.83…  The euro continues to knock at the door of 1.21, and a true test of weather or not this is beginning to look like a long ride down the slippery slope for the dollar, would bring about the euro charging into the 1.21 handle…

Before I get to Gold & Silver… I wanted to point out that the Chinese renminbi / yuan has really been on an appreciation move lately…  From all I read, China’s economy is working on all 8 cylinders these days, a far cry from their shutdown last spring. They’re back, and with all the commodities that they produce, rising in price, I believe good times are back for China’s economy, and in the next couple of years, I expect them to revisit 10%+ GDP growth! 

With the renminbi / yuan on a roll, guess what other Asian currency is tagging along with its own rally? OK, longtime readers will recall me telling them that when the renminbi rises VS the dollar, so does the Singapore dollar, and that’s what we’re seeing take place once again… I was beginning to think that the renminbi / yuan would never rally strongly again… Good thing I didn’t say it out loud! HA!

The other currency that has seen deep dark depression, excessive misery, is the Russian ruble. I talked about how the ruble was getting punished for the perceived troubles rising between Russian and Ukraine…  Well, I don’t know what caused traders to forget about those troubles, and start buying rubles, but they did, and I’m happy about that!

OK… Gold & Silver didn’t move that much yesterday either, but at least their moves were positive as opposed to the two day spanking they got Thursday & Friday last week… Gold ended the day up $4.10 to close at $1,781.00, and Silver ended the day up 21-cents to close at $26.28…

And in the overnight markets, the traders there have gone into hiding too, and there was little to no movement in the currencies and metals… What movement there was tended to be positive for these two asset classes… The Dollar Index begins the day at 90.81, and Gold & Silver are flat to begin the day.   

I did notice that Palladium reached $3,000 today… J recall a few years ago when Palladium lagged the price of Platinum, and a Palladium mining owner said that Palladium would bypass Platinum that year, and he was correct, and Palladium hasn’t looked back since!  

I just keep thinking about all those home builders and remodelers that are having to buy lumber these days… Remember that I told you that in the last year lumber is up 251%, and that was as of two weeks ago, it’s probably even higher now! So, let’s say you contract with a builder to build you a home a year ago, and he quotes a price based on lumber prices then… About 2 months later he calls you up and says, Ahem… the cost of a 2×4 is skyrocketing, along with a sheet of plywood, I’m going to have to adjust your price… And you stubbornly say, “but we had a contract”, and he smugly points out that the fine print says, building materials’ prices are subject to change…   Uh-oh!

And here’s the thing that really will get you later on, when inflation comes back down and things get priced normally again… Your house cost basis will be extremely overpriced…  I’m just saying…

The reason I got to thinking about all that, is Commodity prices are going through the roof, and Gold is still lollygagging below $1,800… I’m going down to see the witch with the gold capped tooth, and bring her some eye of newt, and other strange things, to see if she can mix something up right there in the sink to put a hex/ spell, on the price manipulators…  A curse on your houses!

Patience, Chuck, patience…  Your time will come… You know it in your heart of hears, but patience, while maybe being a virtue, is not one of my strong points!

On a sidebar… the price of Copper keeps rising, and this morning trades with a price of $4.48!  I’ve said all along that Copper is a good inflation indicator… Now, I heard David Rosenberg, the well followed economist, say that “he had never seen someone walking down an aisle in a store asking for a ton of copper”…  thus refuting the claim that Copper was an inflation indicator…  Hmmm, longtime readers know that I simply adore David Rosenberg, so here’s where the relationship gets a spanner thrown in the works…  (I’m sure he doesn’t even know I exist!) 

OK, the folks at www.Wallstreetonparade.com , Russ and Pam Martens, really did some research on the Banks and their derivative positions yesterday… They contend that the Fed is lying to us about the strength of the banks, by way of the Fed’s “Stress tests”…   They point out that the Fed should no longer be the regulator for these banks since they also act as those banks’ sugar daddy…  And I agree! It’s time there’s a 3^rd party regulators for the banks…  I’ll give you the link to the article, it’s very good and will have you wondering when these derivatives will  all implode… The Fed Has Misled the Public about the “Strength” of the Wall Street Mega Banks: This Chart Shows the True Picture (wallstreetonparade.com)

Ok, it’s earning season once again… This should turn out to be quite interesting… But even if the Corporations report horrid earnings, it won’t stop this stock market’s mania phase…

The U.S. Data Cupboard finally had some worthy prints yesterday, with Industrial Production and Capacity Utilization… Well, they both improved in March, from their rotten negative prints in Feb, but they failed to meet expectations… Industrial Production gained 0.5% in March, VS the -negative -0.9% in Feb, but didn’t meet expectations which were to gain 2.2%… Hmmm…  And Capacity Utilization basically brought the Feb/ March months to flat, with a March gain of 0.9%, reversing Feb’s negative 0.8%…  So, nothing that makes you wanna shout, throw your hands up and Shout, no wait! Not now Chuck…

Today’s Data Cupboard as the Case/ Shiller Home Price Index, which will tell us how much home prices have gained in the last year…  I’m thinking that they have gone up quite a bit!  In addition today, we’ll see the stupid Consumer Confidence report for this month… Everyone has the stimmy checks, the stock market is still setting records, what’s there to be worried about?  Of course I jest… There’s plenty to be worried about! And Bank holdings of derivatives is just one of them!

To recap… The currencies did gain VS the dollar on Monday, but their gains were very small, as Chuck’s fear that traders are in a wait-n-see mode to what the FOMC will do on Wednesday… Gold & Silver also gained VS the dollar, or the dollar lost VS the metals, either way, the moves were muted as well, and that leaves Chuck wondering why if Commodity prices are soaring, what’s holding Gold back? Oh, that’s right price manipulators, of which Chuck has contracted a witch to place a hex on price manipulators!  Chuck points out the rallies in Chinese renminbi/ yuan, Singapore dollars, and Russian Rubles… And as always he ventures out into uncharted waters…

For What It’s Worth… OK… since I spent some time this morning talking about building costs rising, this article talks about how while the Fed may brush this off as temporary, the mindset of people is that inflation is rising, and will act accordingly, and it can be found here: Forget 2% Inflation. With Margins Forcefully Squeezed, Big Companies Raise Prices, Point at Massive Inflation Overshoot | Wolf Street

Or, here’s your snippet: “Big companies, such as Procter & Gamble, have used their earnings calls to prepare investors, customers, and consumers for what is coming: Surging input costs are creating hefty margin pressures, and companies are confident they can regain their margins by passing on those surging costs by implementing large price increases. Smaller companies face the same scenario of surging input cost and margin pressures.

Todd Miller, President of Classic Metal Roofing Systems, which manufactures metal shingles in the US, sent me an email today where he goes into detail as to what his industry, and the broader home remodeling industry, is facing, in terms of surging costs, shipping issues, and supply constraints. This is Todd Miller, a long-time reader and supporter of Wolf Street:

“Our industry is dealing with supply chain shortages as well as rapidly increasing prices. While we have not had to go to this extreme yet on the types of specialized products we produce, I have seen the selling prices of “commodity-based” metal roofs increase by 30% over the last six months, with additional increases projected.

“We’re also seeing the industry-leading asphalt shingle market in a pickle. Prices are going up, manufacturers have distributors and contractors on allocation, and lead times of 30 weeks are being reported. We’re also seeing the industry cut back on product offerings.

“The end result is we have a very robust remodeling and construction market, with limited product availability and spiraling prices. Everyone is aware of the lumber issues, but we’re also hearing of major issues with windows, doors, and siding products.

“As a metal roofing manufacturer, here are some of the raw material increases we have experienced over the past six months:

• Unpainted aluminum: up 15%
• Unpainted galvanized steel: up 57%
• Coatings used on our products: up 10%
• Corrugated packaging: up 15% on average
• Lumber for packaging: up 34%
• Fasteners: up 5 to 8%.

“Typically, the metals and coatings make up about 85% of our product costs.”

Chuck again…  that’s crazy folks… and while it may only last a while, it also may last longer than your houseguest that likes to make his eggs with his shirt off! And I’m afraid that once that the Fed acknowledges that inflation is running hot, it’ll be too late, too late baby… 

Market Prices 4/27/2021: American Style: A$ .7784,  kiwi .7227, C$ .8059, euro 1.2087, sterling 1.3905, Swiss $1.0954, European Style: rand 14.3331, krone 8.2830, SEK 8.3874,  forint 299.96,  zloty 3.7757,   koruna 21.4156, RUB 74.89, yen 108.26, sing 1.3256, HKD 7.7616, INR 74.59, China 6.4842, peso 19.92, BRL 5.4608,  Dollar Index 90.81,  Oil $62.32,  10-year 1.58%, Silver $26.32, Platinum $1,250.00, Palladium $3,000.00, Copper 4.48, and Gold… $1,782.30

That’s it for today… Well I was the star of the show yesterday at the Oncology office! Everyone there wanted to know my secret to losing so much weight… I told them… when you can’t eat sweets, you can’t add salt, and you cut out white bread carbs, there’s not much point to eating… I do eat, folks, just not like I used to eat…  Our Blues were very impressive in their win last night, playing all three periods. My beloved Cardinals found the going tough to hit the ball last night, and lost… UGH! I had the baseball game on the TV, and the hockey game on my phone…  Well, my heart doctor, my primary doctor, and my oncologist have all given me the thumbs up and to keep doing what I’m doing… So, there you have it! At least for another month! HA! Tom Petty, whom we lost way too soon, and the Heartbreakers takes us to the finish line today with their song: I Won’t Bank Down… “you can stand me up at the gates of hell, but I, won’t, back, down”  OK… so now it’s up to you, to go out and make this a Tom Terrific Tuesday, and while you’re at it, you might want to Be Good To Yourself!

Chuck Butler

 

April 26, 2021

* Currencies gain VS the dollar on Friday… 

* Taxes, as a result of every growing debt, to rise… 

Good Day… And a Marvelous Monday to you!  Well, did you tune in for the panel discussion that I participated in last Thursday? I thought it went pretty well, and I thoroughly enjoyed doing my bit, that’s for sure! I hadn’t seen Mary Anne and Pamela Aden for a few years, and afterwards I had the thought that maybe they had found the fountain of youth, for they looked the same to me, as they did the last time I saw them in Orlando, years ago! And Omar spoke as well as he writes, which sometimes is a tough trick to pull off…  And as far as I’m concerned, I have fun speaking, even more than I do writing… not that I do either of them very well, but I have fun!  So…  for all of you who had to work on Thursday during the Money Show presentation, I have a link to a YOUTUBE of the panel discussion, and here it is: https://youtu.be/Pn7Znetr9XY   How’s that for a quick turnaround? HA! Gerry & The Pacemakers greet me this morning with their song: Ferry Across The Mersey…  I used to sing this song to Alex when he was a toddler to get him to sleep…  Alex is nearing 26 this summer, so that tells you how long ago that was!

Friday was an interesting day as far as the currencies are concerned… The dollar bugs were sent back to their wall boards, and the currencies romped and frolicked all about all day long, which saw the Dollar Index end the day fall below 91 to 90.85…  The euro is pushing toward 1.21, which is where we saw the PPT come in BIG TIME the last time the euro got to 1.21, and it’s been a tough row to hoe for the euro ever since, but after some back and forth trading of the last 5 weeks, the single unit is pushing toward 1.21 once again…  And kiwi has pushed through 72-cents, and so on… it was a day to frolic in the sun for the currencies…

But Gold & Silver were not allowed to go outside for any frolicking and they suffered their second consecutive day of selling on Friday.  Gold never could find a bid to end the week, and I have a sneaky feeling that the price manipulators were seeing to that!  The cryptocurrencies are seeing fear enter into their trading days, and for this I would have thought Gold & Silver to be the beneficiaries of any slippage in the cryptos…  But that was not to be, at least on Friday…  Gold closed the day down $7, to close at $1,777…  I have to apologize right here, right now, for deep sixing Gold last Wednesday, when the title of my Pfennig was Gold Inches Toward $1,800… Because ever since that morning, Gold has seen selling… Hmmm… Maybe I didn’t jinx it so much but rather I alerted the price manipulators, who were sleeping at the wheel, that Gold was nearing $1,800….    Either way, I should have just allowed Gold to fly under the radar…

Silver closed the day on Friday down 16-cents to end the week at $26.06.. I have to say this about Silver…  You know with the all the talk of a Green Deal, you would think that Silver would be inching higher daily…  I know you know this, but Silver is a major component of Solar Panels…  And that’s only one of its uses that don’t have anything with stores of wealth!  My spider sense is tingling folks, and it’s tingling because I think Silver is about to take off for higher ground. Traders just don’t know it yet, but they will very soon, that is if my spider sense is anything like it used to be!

In the overnight markets….. there’s been not much movement overnight, with the Dollar Index inching up to 90.88, but that’s about as noticeable as removing a bucket of sand from a beach… And Gold & Silver are basically flat in the early trading today…  I have this feeling that the markets traders have gone into a batten down the hatches mode, ahead of the FOMC Meeting on Wednesday this week.  Why would do they do this? Because the Cartel is a wild card, and traders don’t trust that they will keep everything moving along, and not mention tapering or anything like that. 

Ok, part of the discussion on Thursday’s panel was about how this “all -everything bubble’ dominates everyone’s thoughts these days…  I had chimed in and called this the “mania phase”, where investors just pile in and buy everything, no matter what the fundamentals are, like does the company make money?  And items that make no sense, like NFT’s, and crypto that were created as a joke.. Basically, this “mania phase” is the 3^rd phase of a bull market. In the bull market of 1982 to 2000, in stocks, the mania phase didn’t kick in until 1995… Remember when Big Al Greenspan saw this, and tried to stop it with his “irrational exuberance” speech? So, the mania phase ran 5 years before bursting, and cause pain and losses everywhere… This one could very well last just as long, with interest rates at zero, and the Gov’t sending out stimmy checks like money grows on trees. With all the fake money on the streets, it will continue to drive up prices for things that everybody wants to buy, but nobody needs… Remember during the last weak dollar trend, when euros were the new king, and they were being use in movies instead of dollars? That was the mania phase for currencies… And in 2011 that was over…  So, that’s the whole story that I would have loved to explain on the panel discussion, but due to time constraints, we move ahead in the program…

So, last Thursday, I gave you a list of soft commodities that were flying high and in rally mode… Things like soybeans up 72%, heating Oil up 107%, food prices up 10%, copper up 83%, and lumber us 265%, all in the last year… I talked about how inflation is all around us, but there is no technical inflation… But the currency traders see these rallies and know that 1. Given the stress on the food and commodities delivery system in the past year, that now that things are opening up again, that there will be this HUGE rush to buy, and that will drive up prices, thus signaling inflation, and 2. The amount of fiscal stimulus that the U.S. is supplying will eventually drive price higher too, and that’s reason to mark down the dollar, and buy Gold…   Got Gold?

On a sidebar here… Don’t you just love when the President puts all Americans in one big pile and accuses us of things? I take major exception to him when he does this… he doesn’t know me, so until he takes the time to get to know me, he might not want to include me in his generalizations!  I know this has nothing to do with the markets, but, it was on my  mind since last Thursday, and I had to get that off my chest this morning… 

Ok… back to the markets, economies and dolts…  Ok, longtime readers have heard me crying wolf about the debt in the U.S. for more years than I care to count off…  But one of things I always told people about this rising debt was that taxes would be going higher…  And with that thought, here’s Dave Gonigam at the 5 Minute Forecast, on taxes….

“President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6% to help pay for a raft of social spending that addresses long-standing inequality, according to people familiar with the proposal.”

The higher rate would affect those with incomes of $1 million or more. The present rate is 20%. If you toss in the 3.8% Medicare surtax, it’s 23.8%. So in reality, the 39.6% proposal is 43.4%.

➢           That Medicare surtax on capital gains took effect as part of Obamacare. It kicks in whenever modified adjusted gross tops $250,000. And that $250K figure is not bumped up each year for inflation.

In states that impose steep capital gains tax like California and New York, the total government take would top 50%.”

Chuck again…  So, I can here a lot of you saying, “well that $1 Million in income, excludes me” Au Contraire Monfrere… Just wait… Because this is how this will play out… After a couple of years of not reaching the goals for tax receipts from this program, the Gov’t will come for your tax dollars… Trust me on that one folks, it starts at the top and trickles down, to you and me…

Debt just keeps moving higher every minute of every day… And there’s nothing I can do to stop it, so I just sit here and think of all the things that are being disrupted by it…  The research paper of Rogoff and Reinhart says that when a country’s debt get’s to 90% of GDP that it will cause a negative to GDP… And we’re currently around 130% of GDP, which explains why the GDP of the U.S. has averaged about 2.1% for the last decade…  This year will be an exception because of the shut down of the economy in 2020, but if you average out the two years, then it will no longer be an exception!

The U.S. Data Cupboard was very lacking last week… But this week will be different, starting this morning with March prints of Industrial Production and Capacity Utilization..  you may recall that these two were very disappointing in Feb at -1.2% and -.9% respectively…   Tomorrow we’ll see the stupid Consumer Confidence, which is really just a pulse of the stock market…  And Wednesday is an FOMC Day! How did that sneak up on us?  Well, it will be a FOMC meeting day with a press conference afterward…  The Cartel is not going to make any changes, so it will all be about what Jay Powell has to say in the press conference afterward!

Later in the week we’ll see the Weekly Initial Jobless Claims, and on Friday Personal Income and Spending will print for March…   So a fun-filled week packed with lots o’ data… Should be an interesting week… stay tuned!

To recap… The Currencies romped and frolicked over the dollar bugs on Friday, sending the euro to near 1.21, and the Dollar Index down to 90.85….  Gold & Silver were not allowed to participate in the dollar bashing on Friday… Gold was down $7, and Silver was down 14-cents… Chuck describes his thesis on the mania phase, and then goes into a discussion of taxation because of the debt, so you won’t want to have missed that!

For What It’s Worth…  Well… this is an article that the good folks at GATA posted this weekend, and so unless you are a member of GATA it’s not a public article, but I’ve got it here for you! This about a guy who has changed his mind on metals manipulation…  Don’t forget the recap of the article at the end, for I have a comparison for you… 

Or, here’s your snippet: “What does Ross Norman, formerly chief executive officer of London bullion dealer Sharps Pixley, now CEO of Metals Daily, think about gold market manipulation?

Three years ago, in an interview with Grant Williams’ Real Vision, Norman said “you betcha” when asked if central banks had an interest in manipulating the gold market, adding that while he didn’t know if they were doing it, he thought they “probably” were:

But now he does a 180:

“That same narrow linear thinking in my view — and this is where I disenfranchise many of you — applies to those who maintain that the gold market is manipulated. My frustration is firstly that there is not only no evidence to support that view and less regard or critical thinking around the second-order ef fect of pushing the mantra. I have many personal friends who would not consider investing in gold because they believe the bullshit … those morons pushing the line are working against their own interests, no matter the damage to the ‘brand.'”

No evidence?

GATA cordially invites Norman to support his assertion by responding to the decades of documentation”

Chuck again… Ok, so he thinks I’m a “moron”… Well, as Pee Wee Herman would say, “I’m rubber and you’re glue and everything you say bounces off me and sticks to you!”   Ok, here’s my comparison… First of all something along the way made him do this 180, right?  Maybe something to the tune of his new job makes him say these things?

I compare this to Big Al Greenspan… Many of you don’t know that Big Al was a student to Ayn Rand, who was the ultimate Gold Bug, which means Big Al was too a Gold bug, but then he went on to become the Fed Chairman, and suddenly, Gold is a Barbaric relic?  Never moving off that thought all his years at the Fed, but… as soon as he goes back to civilian life, he starts to tout the benefits of owning Gold…  Think what you want here, but I’m saying he was told to be the Fed Chairman that he would not be allowed to bestow his learnings of Gold…

And why is that, you ask? Because the Gov’t does not want Gold to be more popular than the dollar, and the Fed is the captain of the dollar’s ship, that’s why! 

Market Prices 4/26/2021: American Style: A$.7780,  kiwi .7218,  C$ .8037, euro 1.2082, sterling 1.3891, Swiss $1.0921, European Style: rand 14.2742, krone 8.3095, SEK 8.3806,  forint 300.80,  zloty 3.7711,   koruna 21.3649, RUB 74.83, yen 108.01, sing 1.3262, HKD 7.7594, INR 74.79, China 6.4944, peso 19.85, BRL 5.4741,  Dollar Index 90.88,  Oil $61.25,  10-year 1.59%, Silver $26.11, Platinum $1,240.00, Palladium $2,954, Copper $4.43, and Gold… $1,777.50

That’s it for today… We started the weekend with rain, and it lasted all day on Saturday, giving way to a beautiful day on Sunday…  I was able to sit outside, watch my beloved Cardinals sweep the Reds, and barbeque some very delicious Chicken Breasts… A Chamber of Commerce day for sure! Our Blues rallied on Saturday to defeat the Avalanche… they need more efforts like that to make the playoffs!  Billy Paul takes us to the finish line today with his song: Me & Mrs. Jones… This used to be a fave song of the guys on the trade desk back at Mark Twain Bank… I hope you have a Marvelous Monday, and will Be Good To Yourself!

Chuck Butler

April 22, 2021

*Currencies & metals rally on Wednesday… 

* You don’t want to miss this, Chuck thinks he’s in line for a Nobel Prize! 

Good Day… And a Tub Thumpin’ Thursday to you! A bonus Pfennig day to boot! Man was it cold here yesterday! I went outside for a moment, and turned right around and went back inside, for it was too darn cold for me! Remember, I spent 3 months in a very warm climate, and therefore my body is unaccustomed to having cold air blow on it! HA!   And today and tomorrow won’t be much warmer! UGH! From what I see, I won’t be back outside to sit in the sun until Sunday!  Sunday, Fun day, as my good friend, Duane often says… Cardinals blow two chances to win the game yesterday, and blow a great pitched game by their pitcher to lose 1-0… UGH!  OK, all you 70’s bands fans turn up your machines, because today, Vanilla Fudge greets me this morning with their song: You Keep Me Hanging On… I love this version of the song, and for once the remake was better than the original…

OK… Well the all clear horn sounded yesterday morning giving currency traders the green light to sell dollars, and that the PPT was gone, for now that is…  Tuesday saw the currencies give back a good portion of their previous 3 days of trading gains… And yesterday morning the PPT was still hanging around to scare off any dollar sellers… But midday on, the dollar selling began again in earnest, and the Dollar Index fell from 91.42 in the morning to 91.13 by the end of the day… The euro and the Aussie dollar (A$) recovered nicely, and the currencies that didn’t succumb to the dollar buying on Tuesday, added to their gains…

And Gold & Silver really swung a mid section punch at the price manipulators, and moved higher on the day, all day, until the normal trading hours closed, and then these two metals didn’t stop gaining VS the dollar… Or, as I like to think of it, the dollar lost ground to the metals… Gold was up $14.80 on the day to close at $1,794.60, and Silver really took a chunk out of the dollar’s armor rising 73-cents on the day to close at $26.65…

Here’s you last chance saloon to sign up for the virtual Money Show presentation this afternoon, featuring The Aden Sisters, Omar Ayales, and yours truly… Click this link to take you to the sign in page with all the info you need…

https://online.moneyshow.com/2021/april/money-metals-and-mining-virtual-expo/speakers/1e45e94ad4c911d487fc0050da180a7f/chuck-butler/?scode=052583

In the overnight markets… The currencies have continued to push the currency envelope across the desk, and have the dollar bugs on the run as I write this morning… The Dollar Index begins the day at 91.09, which is down from last night’s close of 91.13… The European Central Bank (ECB) met this morning and left all their stimulus in place in hopes of an economic rebound soon…  yeah… sort of like crossing your fingers and hoping… The ECB used to be dynamic, and now they sit on their hands, cross their fingers and hope… I just got a thought in my mind here, that hopefully you won’t mind me sharing… 

Back in the last weak dollar trend from 2002 – 2011, I used to type European Central Bank (ECB) nearly every day, for they were always in the news with their currency trading hot every day…  But they’ve faded from the news front, and take a back seat to the Cartel now…  Funny how times change, eh?  Ok, back to the overnight markets!

Gold & Silver start the day in the red this morning…  Don’t know why this is going this way this morning, but it doesn’t mean it will be the way these two trade all day… Gold is down $9.80 this morning and Silver is down 22-cents…  Up, down, Up, down, it’s like the price manipulators are making these two metals do their exercises! UGH!  Oh well, these two have had good weeks so far, let’s not lose fact of that! 

I received an email in the Pfennig Replies box yesterday that got me thinking about something that could very well be coming down the pike… It was just a couple of days ago that I read an article by an “insider” who said that strong regulation on digital currencies, like Bitcoin, was coming from the SEC… And then I noticed that Bitcoin and the other digital currencies were all backing off their recent highs… Could this news be what’s scaring the digital bugs?  I still truly believe that once the U.S. has their own form of a digital currency that they will outlaw owning the other digital currencies. I say that from my history with how the U.S. does not like competition with the dollar…  Look at all the years of the price manipulators trying to scare investors from buying Gold… 

OK… There was another piece of news that I talked briefly about last week, and that is the $814 Billion in Margin Debt…  And how right before the last 2 stock crashes, margin debt ran up very high, not this high, but high… And what really got my goat about the news was that when Cartel Chairman Jerome Powell was asked about the size of the debt, he replied that he didn’t follow it so he couldn’t comment on it…  Wait! What?  Well, if any of the economists that you employ, at the Cartel,  happen to be reading this right now, maybe they’ll share this bit of information with you so you can do something about it… In 1929 only 2.5% of Americans owned stocks, and you think that stock crash brought about a lot of misery? Well, today 55% of Americans own stocks, and if there is a stock crash, there will be pain and misery all around and about… Especially if a ton of these Americans have their stocks leveraged with debt…  

Here’s what you can do right here, right now, and it’s something that Big Al Greenspan should have done in 1996 when he said that the stock market was full of irrational exuberance… And that is… drum roll please, because I should get a Noble Prize for this suggestion…   RAISE THE MARGIN RATE TO 65%!

Back in 1974 when I was doing margin for a brokerage firm, the initial margin rate was 65%, and it kept all those little accounts that shouldn’t be buying on margin from doing so,  because margin gives you leverage, that can end up going either way… Stop this now Jay… stop it from getting too much larger, and you’ll be made a hero…

OK… I was going through Twitter to look for something yesterday that I thought I saw come across on my phone, and I came across this…

Commodity prices over last year… Lumber: +265% WTI Crude: +210% Gasoline: +182% Brent Crude +163% Heating Oil: +107% Corn: +84% Copper: +83% Soybeans: +72% Silver: +65% Sugar: +59% Cotton: +54% Platinum: +52% Natural Gas: +43% Palladium: +32% Wheat: +19% Coffee: +13% Gold: +3%

And you wonder why these items are all heading higher in price?  Egon Von Greyerz tells us why… Let’s listen in on his latest Twitter donation:” As of April 2021, the M1 supply has gone from $4.5T to $18.1, a rise of 450%.

Such data represents a pretty bad report card for the Fed’s failed monetary experiment of unlimited #QE.

The Fed’s solution to the problem? Hide it. – Egon Von Greyerz on Twitter

Chuck again… Well, our current National Debt is greater than $28 Trillion, that’s $80,000 liability for each citizen is greater than $85,000, and if they only divvy it out to tax payers the bill would be $225,000…  Ok, do you want to stop the illegal immigration of people into the U.S.? Have them sign a document telling them to become a citizen they will have to divvy up $225,000 to remain…  Now that would cause a lump in one’s throat, now wouldn’t it?

And that’s just the current debt… The Unfunded Liabilities are $162.7 Trillion! Folks, that’s never going to be paid off, so we might as well just go ahead and default on it now and get it over with!

All I can say about all of these things that keep causing a swell to form that eventually will turn into the Perfect Storm on our Financial markets, is… Got Gold?

The U.S. Data Cupboard is finally going to produce something for us to look at today, with last week’s Initial Jobless Claims…  Recall that the previous week saw a huge drop in the number of claims filed from 769,000 to 576,000… recall that I pointed out that the previous week’s numbers were 1 day short, so maybe we’ll see this all illustrated with today’s data, and then maybe we won’t, only the Shadow Knows…

To recap… The currencies rebounded nicely yesterday after the all clear horn had sounded signaling to currency traders that the Big Bad Wolf, I mean PPT, had gone home, for now… The Dollar Index fell on the day from 91.42, to 91.13.  Gold & Silver gained again on Wednesday, with Silver really outperforming its kissin cousin, Gold… Silver gained 2.85% which was equal to 73-cents… Chuck talks about all kinds of things that are piling up against the U.S. financial system, and so therefore you had better not skip to my daisy through the letter and go back to read it! Chuck thinks he might be up for Noble prize… Yeah, as if! HA!

For What It’s Worth…  Well, I mentioned leverage above, and then Ed Steer highlighted an article about how there’s too much leverage, and thought, well, by jove, you’ve got yourself a FWIS article! And so here it is, this is an article about leverage in the U.S. and if you think it can’t come back and bite us in the rear, then let me introduce you to Bill Hauwn of Archegos… Any way, the article can be found here: Stock Market Leverage in La-La Land, Rises to Historic WTF High | Wolf Street

Or, here’s your snippet: “Archegos shows how leverage is the great accelerator of stock prices on the way up, and on the way down. One of its bets, ViacomCBS, after skyrocketing, collapsed by 60%.

Vast, unreported, and at the time unknown amounts of leverage blew up Archegos Capital Management, dishing out enormous losses to its investors, the banks that brokered the swaps, and holders of the targeted stocks. The amount of leverage became known only after it blew up as banks started picking through the debris. ViacomCBS [VIAC] was one of the handful of stocks on which Archegos placed huge and highly leveraged bets, thereby pushing the shares into the stratosphere until March 22, after which they collapsed by 60%.

Archegos is an example of how leverage operates: It creates enormous buying pressure and drives up prices as leverage builds, and then when prices decline, the leveraged bets blow up as forced selling sets in. Most of the leverage in the markets is unreported until it blows up. The only type of stock-market leverage that is reported is margin debt – the amount that individuals and institutions borrow against their stock holdings as tracked by FINRA at its member brokerage firms. Margin debt is an indicator for overall leverage, and it has reached the zoo-has-gone-nuts level.

FINRA reported on Friday that margin debt jumped by another $9 billion to $823 billion in March, having soared by $163 billion in five months, and having exploded by 72% from March 2020 and by 51% from February 2020, to historic highs”

Chuck again… well… looky there margin debt rose $9 Billion more in the past week! But how much of it would have actually been booked if the Initial Margin Requirement was 65%?  I’m betting a free undercoat with your paint job, no wait! I’m betting it would have been a much lower number… the other thing here with this article, is that Bloomberg magazine just arrived the other day with the front page in big block letters: How TO LOSE $20 BILLION IN JUST TWO DAYS!  That’s the damage from the Archegos failure… 

Market Price 4/22/2021: American Style:  A$ .7744,  kiwi .7186,  C$ .7997, euro 1.2045, sterling 1.3894, Swiss $1.0918, European Style: rand 14.2739, krone 8.3975, SEK 8.3975,  forint 301.85,  zloty 3.7798,   koruna 21.4574, RUB 76.71, yen 108.08, sing 1.3278, HKD 7.7594, INR 75.00, China 6.4934, peso 19.92, BRL 5.5676,  Dollar Index 91.06,  Oil $61.02,  10-year 1.57%, Silver $26.43, Platinum $1,209.00, Palladium $2,916.00, Copper $4.29, and Gold… $1,784.80

That’s it for today, Well, not quite… Today is EARTH DAY So let’s go celebrate EARTH DAY! When I was a young hippie with long hair, and wore ragged jeans and wife beater T-shirts, we used to celebrate EARTH DAY at Forest Park flying kites, as a local radio station KSHE provided the tunes… Man, now that I think about that, it was a very long time ago! UGH! Go hug a tree, or lay a kiss on a flower bud… Oh, I know there are real things that people can do, but I’m not here to tell people how to live their lives… My wife has been ill the past two nights, and so that leaves me to make something for dinner… the first night it was pizza, and last night it was chips and salsa… I really know how to live it up, eh? HA!  I’m looking forward to Sunday, Fun day, since that will be the only day in the next 4 that will be worth bragging about… The Cardinals will be playing the Reds, in a day game on Sunday, so I’ll be able to sit outside and watch it! YAHOO! Day Baseball! The Rolling Stones take us to the finish line today with their song: Can’t You Hear Me Knocking?  One of Keith Richard’s best guitar works… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and please, pretty please with sugar on top, Be Good To Yourself!

Chuck Butler

April 21, 2021

* Currencies give back some gains on Tuesday & overnight

* Chuck to talk at the Money Show once again! 

Good day… And a Wonderful Wednesday to you! Well, it was April 20^th, and if you looked outside yesterday, you saw snow falling and accumulating on tree limbs and tables… not on the streets though, as they’ve been warmed for over a month now… Strange sight, for sure!  Well, my primary doc was quite pleased with me yesterday… He told me I should celebrate my weight loss, and I said, “but then I would gain it back!” He laughed…  and I said, “ you don’t know how much I love to celebrate things”!  Well, my beloved Cardinals won Monday night, scoring 11 runs, with 4 home runs, and then they struggled to score 2 the next day and lose… UGH! Tyrone Davis greets me this morning with his song: Can I Change My Mind…  Los Lobos did a remake of this song, but nothing beats the original!

Well… guess what? My oncologist called yesterday, and said she needed to change my visit date from this week to next Monday… That means this won’t be THAT short, of a week for Pfennigs! You’re stuck with me for this Tub Thumpin’ Thursday, and that’s that! HA!

When I left you Monday morning, the currencies were forcing the dollar bugs back into the wall boards, and everything looked to be going in the right direction… The dollar was down, currencies and metals were up, the price of Oil was up, and Treasuries yields were down…  And the rest of the day on Monday pretty much played out the same way as it started, with only Gold & silver seeing major price manipulation to end up down on the day.

All the major bullion dealers were present and accounted for at the COMEX window with their respective arms filled with short Gold & Silver paper trades… This was a major effort to stem the price rise of Gold & Silver and it worked, but for only one day, as Gold & Silver rebounded on Tuesday…

On Tuesday, the currencies were still pushing the dollar bugs around most of the day, with the Dollar Index falling to 91.01 at one point, but when you least expect them to show up, they do… The Plunge Protection Team (PPT), that is…  And the Dollar Index rallied to end yesterday at 91.19…  But as I just said, Gold & Silver rallied, with Gold up $7.80 to close at $1,779.80, and Silver up one penny on the day to close at $25.92… After all those short paper trades on Monday, Gold was right back to where it began Monday at $1,779…  I’m just saying…

In the overnight markets… the PPT has made sure that there was more dollar buying, and the Dollar Index has risen to 91.42, with the euro falling to just above 1.20, and the Aussie dollar (A$) losing about 1/2-cent in the overnight trading.. Not all the currencies are losing ground this morning, currencies like the renminbi, real, and krone are still holding to their gains VS the dollar, and adding to them. 

Gold & Silver are up again in the early trading today… Gold is up $6.30, and Silver is up 4-cents…  As Gold creeps toward $1,800 again, one has to wonder when an engineered takedown will occur?  Maybe it will, maybe it won’t… You see, in my opinion, the Cartel heads have to be wanting Gold to rise, as it would fuel inflation fears, and getting inflation to really move does depend on consumer feelings… If they fear rising inflation they will go out and spend now before inflation eats away their buying power, and this will beget even higher inflation rates.. 

So, each time the price manipulators do one of their engineered takedowns of Gold, I can imagine the Cartel heads, banging their respective heads against a wall, and saying, “We told them to lay off these takedowns, why won’t they listen?” 

It’s really a shame that the price manipulators won’t listen… I wish we could get them to listen the same way my dad would get me and my sisters to settle down…  He would walk into the room, and hang his belt on the door knob… That would do the trick!  So… A memo to the Cartel heads, hang a belt on the door knob, and see if they listen then…  

I was going over things I want to talk about for Tomorrow’s virtual Money Show Panel that I will be participating in…  The thing I want to be careful of is not stepping on anyone’s toes… Omar Ayales, for instance is a Gold guru, and has been for many years, so I don’t want to dive into something he might want to talk about.. Pamela Aden is an asset chartist, and I don’t want to go there either…  I need to “stay in my lane”… Hopefully you’ll be able to log onto the show, and hear what I have to say!

The panel is only supposed to last 45 minutes, with 10 minutes at the end for Q&A…  So, I don’t see how I’ll be able to talk much, but… you know me, I’ll get my thoughts across! 

OK… back to the markets…  I was reading the 5 Minute Forecast by Dave Gonigam at Agora yesterday, and he printed something that I’ve talked about before, but this has more defined lines for us, and it refers to the crazy times we live in where things are being priced at outrageous levels for things that nobody needs… This is called the “mania Phase”…  I plan to talk about this tomorrow on the panel, so there’s your teaser…

On Monday’s FWIW I had an article on China allowing Gold imports again, and how much they these Gold Imports were rising… And then yesterday, the folks at GATA sent me a note telling me that Gold Imports in India are up 23% in the last year.. That’s investors looking to buy and own Gold at cheaper prices before it heads higher…

Yesterday, after returning home from the doctor visit, I sat down to read Doug Casey’s International Man article on Empires…  Remember Bill Bonner’s “Empire of Debt” book? Well, these two basically describe the same thing, in that Empires grow to large, deficit spend, raise taxes, and then collapse, Here’s Doug’s 10 steps of an Empires ruin…

1. The reach of government leaders habitually exceeds their grasp.
2. Dramatic expansion (generally through warfare) is undertaken without a clear plan as to how that expansion is to be financed.
3. The population is overtaxed as the bills for expansion become due, without consideration as to whether the population can afford increased taxation.
4. Heavy taxation causes investment by the private sector to diminish, and the economy begins to decline.
5. Costs of goods rise, without wages keeping pace.
6. Tax revenue declines as the economy declines (due to excessive taxation). Taxes are increased again, in order to top up government revenues.
7. In spite of all the above, government leaders personally hoard as much as they can, further limiting the circulation of wealth in the business community.
8. Governments issue bonds and otherwise borrow to continue expansion, with no plan as to repayment.
9. Dramatic authoritarian control is instituted to assure that the public continues to comply with demands, even if those demands cannot be met by the public.
10. Economic and social collapse occurs, often marked by unrest and riots, the collapse of the economy, and the exit of those who are productive.
11. In this final period, the empire turns on itself, treating its people as the enemy.

Chuck again, Doug thinks that the U.S. is now at #8 going on #9…  I would say that I’m in agreement with him 100% on this… Every Empire that has collapsed in the history of Empires on Earth, have all come about by high taxes, currency debasement, and wars… Think about that… 

The U.S. Data Cupboard is still empty today… This is the craziest 3 days of no data that I ever remember seeing before! But it is what it is… And tomorrow, we’ll finally see something in the Weekly Initial Jobless Claims…

To recap… The currencies were going along very nicely pushing the dollar bugs around, until the PPT showed up and put a stop to the currency rally yesterday…  The Dollar Index had fallen to 91.01 before being rescued yesterday and finishing the day at 91.19… And have gotten sold more in the overnight markets… Gold & Silver rebounded Yesterday, from Monday’s truck load of short paper trades that pushed Gold & Silver prices down.  But after three days of trading Gold is right back to where it was Monday morning, before the onslaught of short paper trades… And Gold & Silver are up in the early trading today… 

For What It’s Worth…  Ok, the folks at www.wallstreetonparade.com have uncovered some news that find to be very interesting… It’s about the major banks being told to report to Congress in May for hearings, but not having any news on what the hearings will be about. This article can be found here: Wall Street’s Mega Bank CEOs To Be Hauled Before Congress in May; Nobody Will Say Why (wallstreetonparade.com)

Or, here’s your snippet: “We’ve been closely monitoring the Senate Banking and House Financial Services Committees for the past 15 years. We can think of no other time when the Committees issued a joint statement to announce they were hauling the most powerful men on Wall Street to testify, without offering a scintilla of information on the topic of the hearing.

The press statement simply indicated that the Senate Banking Committee would hold its hearing on Wednesday, May 26 at 10 a.m. and the House Financial Services Committee would hold its hearing the following day on Thursday, May 27 at 12 noon.

The announcement indicated that the following CEOs are scheduled to testify: Jamie Dimon of JPMorgan Chase; David Solomon of Goldman Sachs; Jane Fraser of Citigroup; James Gorman of Morgan Stanley; Brian Moynihan of Bank of America; and Charles Scharf of Wells Fargo.

The joint press release did not give a title for the hearings nor the topic for the hearings. There is nothing on the websites for either Committee that sheds any further light on the matter.

The only conclusion that we can draw is that more than a month before the hearings are set to be conducted, the Chairs of these two Committees – Senator Sherrod Brown (D-OH) and Maxine Waters (D-CA) – wanted to send a message to Wall Street’s CEOs that they have them in their crosshairs.”

Chuck again.. my guess is that Congress wants to know about the Archegos failure… But then maybe, just maybe Congress will grill them like a well done steak, and get some answers from this group, eh? Yeah, like that could happen, Chuck… you know better than to even suggest that Congress would do their duty and get answers from these guys… The Congress I know is too yellow bellied, and naive…  I’m just saying… 

Market prices 4/21/2021: American Style: A$ .7714,  kiwi .7175,  C$ .7917, euro 1.2008, sterling 1.3898, Swiss $1.0893, European Style: rand 14.2768, krone 8.3861, SEK 8.4583,  forint 302.25,  zloty 3.7954,   koruna 21.5628, RUB 76.53, yen 108.04, sing 1.3306, HKD 7.7622, INR 75.52, China 6.4960, peso 19.90, BRL 5.5442,  Dollar Index 91.42,  Oil $60.91,  10-year 1.56%, Silver $26.09, Platinum $1,194.00, Palladium $2,851.00, Copper $4.26, and Gold… $1,786.10

That’s it for today, except to send out a GREAT BIG HAPPY BIRTHDAY to my good friend, Frank Trotter! Frank is 11 months older than me. I recall years ago, when Frank was going to turn 50, his wonderful wife, Carol, asked me to send out a request to all his contacts to send him Happy Birthday emails, and on his birthday, his email box was filled with HB notes! Then when I turned 60 Frank returned the favor sort of, he sent out to some contacts of mine and asked them to send their notes to him, and then he put them all in one message, printed it and gave it to me… Frank was and is, the smartest man in the room, any room, any takers. And I’m so glad that we got to know each other way back in the 80’s at Mark Twain Bank! So… Happy Birthday, Frank!  With my new schedule I’ll be back tomorrow, full of you know what and vinegar, so be sure to tune in for that! HA! Well the snow stopped yesterday afternoon and the sun came back out! What a weird day for sure! A Flock Of Seagulls takes us to the finish line today with their song: Space Age Love Song…  “I saw your eyes, and you made me smile. For a little while, I was falling in love” I hope you have a Wonderful Wednesday, and have some birthday cake for Frank! And I also hope that you will Be Good To Yourself!

Chuck Butler

April 19, 2021 

* What’s it gonna be boy, inflation or deflation?

* Gold & Silver move higher once again.. 

Good day… And a Marvelous Monday to you… Not a great weekend for St. Louis sports teams. The Cardinals lost 2 of 3 to the Phillies, and the Blues blew a 2 goal lead to lose Saturday night. The Blues are now out of the playoffs, but 13 games remain, so they need to lace up the skates, and get to work! The weather here turned chilly, and I received a freeze warning for Tuesday night here… Crazy April weather! Back in the day… I was appointed by the football coach to go with a couple of my teammates and attend a banquet and accept our trophy for winning the PHL football Championship the previous fall… It was April and it snowed a few inches, that night, making the drive home a little treacherous given I was driving my dad’s station wagon that night! Just a prelude for what I would experience living in Des Moines, Iowa a few winters later! Blind Faith greets me this morning with their rock classic song: Can’t Find My Way Home…   ( I love this song!)

Well… how was your weekend? The highlight of my weekend was that little Evie and brother Braden came to stay with us Saturday night… She’s 18 months old now, and she bring me books to read to her, so darn cute! Longtime readers will recall me carrying on about my first grandchild, Delaney Grace back in the day… Love them all to pieces!   Ok… I know, I know, I seem to beating around the bush before taking on today’s letter… So, I guess there’s nothing else I can ditter about… So, here goes!

The Currencies put in a good week last week, ending the week on a a strong note, and pushing the dollar bugs back to the wall boards they crawled out of…  The Dollar Index began the week, last Monday at 92.02, and ended the week at 91.55…  And since the euro is the most heavily weighted currency in the Dollar Index, the euro was the main mover during the last half of the week, and ended the week getting even closer to the 1.20 level…  The Aussie dollar (A$) and kiwi, aka the antipodeans, had very good week, along with the Petrol Currencies.

Gold & Silver also got on board with the kicking sand in the face of the dollar bugs. Gold started last week at 1,744.20 and ended the week at $1,777.50, up $12.90 on Friday…  But that’s only half the story regarding Friday’s upward movement…  About halfway through the day, Gold was flying high and appeared it could breach 1,800, and then the rug was puled out from the shiny metal, as the price manipulators showed up at the COMEX with arms full of short Gold paper trades…

The same held true for Silver… Silver started the week at $25.27, and ended the week at $26.50, up just 13-cents on the day, but as I said above, was knocked down at the end of the day, by the price manipulators…

I think this is good place to remind you dear readers that I’ll be appearing along with my publishers, Mary Anne and Pamela Aden, and Gold guru Omar Ayales this Thursday April 22^nd, at 4:30 pm EDT, and it will be virtual, so here’s link for you to sign up to view it: https://online.moneyshow.com/2021/April/money-metals-and-mining-virtual-expo/registration/?scode=052516

This will be a Big Deal for yours truly, because I’ve not been a speaker for 5 years now… I’m wondering if I still “have it”…

In the overnight markets…. the dollar has been led to the woodshed, and we start the week with the Dollar Index at 91.10, almost 100 bps from where we started last week! The euro has pushed higher into the 1.20 handle, and it’s as though there’s no stopping the A$ and kiwi from moving higher these days…  Gold & Silver are basically flat in the early trading today with Gold up $2 and Silver 4-cents… 

OK… So, everybody’s talking about whether we are going to see inflation or deflation will continue… There are so many things like shipping prices have gone up 50%, and World Food Prices have gone up 10%, rising for the 3^rd consecutive month in March… that point to inflation, but then there’s the lack of wage inflation, and some other things that balance out the argument either yay or nay…  The thing that I keep in the back of my mind on this argument is what I talked about in the February 11, Pfennig, let’s listen in : (systemic inflation) is that the economy cools down. Fake money, false price signals, regulation, bubbles, giveaways, and COVID-19 shutdowns could simply cause a cutback in buyable output… while the supply of available money continues to rise.

So that would throw out the need for wage inflation, but in the end, inflation is what the Fed wants, and the Gov’t needs to reduce the value of the dollar by inflation, to pay back debts with weaker dollars… making $20 bills, $5 bills…   So, by nook, crook and cranny, the Fed will get what they want and the Gov’t needs, eventually… And while 2021 might just be building blocks for the coming inflation, that will hit our shores in earnest in 2022…

Oh, and one more thing… don’t look now but Copper has really jumped higher and is trading at $4.31 this morning, indicating that inflation is all around us… 

Ok… above I talked about the price manipulators, and the this weekend I received this email from the good folks at GATA, that I’m going to give you a snippet of here, so this is from GATA and here goes:

“Chris Marcus of Arcadia Economics has assembled a compelling list of questions about what seems like the indifference of the U.S. Commodity Futures Trading Commission to misconduct and manipulation in the silver market, which the commission is supposed to regulate.

Marcus is undertaking to raise $100,000 via GoFundMe.com to be donated to a charitable cause if the commission answers his questions, or possibly to be used to sue the commission if it refuses to answer.

Of course the CFTC isn’t likely to answer any important questions about misconduct and manipulation in the monetary metals market, in light o f the overarching question it has repeatedly refused to answer for GATA and for U.S. Rep. Alex X. Mooney, R-West Virginia:

That is, does the commission have jurisdiction over manipulative trading undertaken by or at the behest of the U.S. government or governments trading with the approval of the U.S. government?

Indeed, the architecture for manipulative trading for or with the authorization of the U.S. government long has been in place in plain view, just not widely understood. They are:

— The U.S. Treasury Department’s Exchange Stabilization Fund, which is authorized to manipulate and rig not only all markets in the United States but all markets in the world, quite without the approval of the governments with direct responsibility for those markets:”

Chuck Again… That sounds promising doesn’t it? But don’t expect any miracles here, like the CFTC fessing up or even answers the challenge… I think that the CFTC will ignore it, just like they have all other attempts to come clean. But to me this tells us more if they don’t fess up… It tells me that they are hiding something BIG…

OK… countries all over the world, sans Russia, and Singapore, are experiencing the same problems as the U.S. too much debt…  And all of them are looking for ways to inflate their economies to lessen the pain of the debts they have accumulated, with more on the way probably!  The Reserve Bank of Australia came out and said something about leaving interest rates unchanged until wages begin to rise… I’m sure that’s the mantra for most of the Central Banks of the World…

The problem with wages is that they haven’t been a strong component of inflation since the 60’s…  What makes anyone think that they will suddenly become a major player in inflation again?  The U.S. has a real problem right now… There are probably 90 Million people that don’t want to work any longer, they get unending unemployment benefits, while receiving a bonus stimmy check about every 3-5 months… There’s no push to work any longer and that will keep wages under wraps for some time to come… I’m just saying… 

But, as I always say… The U.S. is supposed to be better than the other countries of the world, because they are the caretakers of the reserve currency of the world… Instead of being better than the other countries, for the most part they are worst, debt wise…

Speaking of debt…  Publishing guru, and best selling author, Bill Bonner, had this little tidbit about our debt, and I’ll let Bill take it from here: “In March 2021, the feds collected some $267 billion in tax receipts. But they spent $927 billion – a new record. And a record monthly deficit of $660 billion, approximately equal to the entire U.S. annual budget during the Ronald Reagan administration.

Not only do income and outgo not match… they’re never going to get together.

Losing money at this rate implies a loss for the year of about $8 trillion… More likely, March was an outlier, and the loss will be “only” about $3-$4 trillion, still far more than can plausibly be borrowed.

And this is on top of other big numbers that don’t add up, either.” Bill Bonner… www.rogueeconomics.com

The U.S. Data Cupboard last week has a couple of surprises for us… First off the weekly Initial Jobless Claims fell to 576,000 the previous week, and were being hailed as a sign the economy is roaring again, but… did these spin doctors stop to think that the previous week was a day short because of Easter Monday in many locations? I’m just saying…  Then we had a Big number from Retail Sales for March as they rose 9.8% VS the -2.7% in Feb… That’s a big turnaround, but then we, as consumers did begin to get our stimmy checks in March now didn’t we? What will be the follow up here?  I’m thinking it won’t be anywhere near 9.8%!  Then Industrial Production for March was up 1.4%, but that didn’t meet expectations, nor did it reverse Feb’s -2.6%… And Capital Utilization (CAPU), rose to 74.3 from 73.4. Recall last week I questioned the call for a rise to 75.5?

And that was all last week’s late week data… But this week’s data is a non-event, at least for the first 3 days this week, there are no data prints, none, nada, nil, zilch, a big fat goose egg!  So… until we get to Thursday this week, which by the way won’t be a Pfennig day, we won’t see any data…

To Recap… The Currencies and metals had good performances last week… And in the overnight markets   there was more dollar selling, with the Dollar Index falling to 91.10. Chuck talks about the argument between the inflationists, and the deflationists and gives points of view from both sides…  He also talks about debt in the countries around the world, and Bill Bonner adds his 2-cents!  There is also the price manipulation talk that just continues on and on and on and on…

For What It’s Worth… I first saw this article this weekend in a GATA release… Then, I saw it highlighted in Ed Steer’s letter this weekend, and then when I was reading the latest edition of Grant Williams’ Things That Make You Go Hmmm, he had highlighted it, and I knew then that I had to use it today in the FWIW… It’s an article about how China’s economy has recovered and is importing Gold again, and this should all be good for Gold, and it can be found here: Exclusive: China opens its borders to billions of dollars of gold imports – sources (yahoo.com)

Or, here’s your snippet: “China has given domestic and international banks permission to import large amounts of gold into the country, five sources familiar with the matter said, potentially helping to support global gold prices after months of declines.

China is the world’s biggest gold consumer, gobbling up hundreds of tonnes of the precious metal worth tens of billions of dollars each year, but its imports plunged as the coronavirus spread and local demand dried up.

With China’s economy rebounding strongly since the second half of last year, demand for gold jewellery, bars and coins has recovered, driving domestic prices above global benchmark rates and making it profitable to import bullion.

The local premium is now about $7 to $9 an ounce, according to gold traders in Asia, and would probably have increased further if more imports to satisfy demand had not been allowed.

About 150 tonnes of gold worth $8.5 billion at current prices is likely to be shipped following the green light from Beijing, four sources said. Two said the gold would be shipped in April and two said it would arrive over April and May.

The bulk of China’s gold imports typically comes from Australia, South Africa and Switzerland.”

Chuck again… Gold can use any help it can get to get back firmly on the rally tracks! But I want to point out that this could go a long way toward what I described China doing with all their Gold, many years ago… And that is to issue a Gold backed currency…  I’m just saying… 

Market Prices 4/19/2021: American Style: A$ .7772,  kiwi .7187,  C$.8005, euro 1.2035, sterling 1.3935, Swiss $1.0944, European Style: rand 14.2279, krone 8.2863, SEK 8.3885,  forint 299.25,  zloty 3.7760,  koruna 21.5195, RUB 75.58, yen 108.15, sing 1.3305, HKD 7.7666, INR 74.84, China 6.5193, peso 19.84, BRL 5.5865,  Dollar Index 91.10,  Oil $62.98,  10-year 1.58%, Silver $26.09, Platinum $1,214.00, Palladium $2,889.00, Copper 4.31, and Gold $1,779.10

That’s it for today… Quite wordy today, but it’s been a few days without a Pfennig, so there was some catching up to do!  So… as I told you last week, I now have two Dr. Appts. This week… So, no Pfennig tomorrow, and then I’ll be back on Wednesday, and then no Pfennig on Thursday… So, in other words, a short week for Pfennigs… Thursday is my visit to my oncologist whom I’ve not seen for 4 months, should be an interesting visit… I can and can’t believe the weather is going to be cold this week… If I didn’t have these Dr. Appts. This week I would be on a plane back to Florida, where it was 90 on Saturday! It was so chilly here that there was no driveway Happy Hour last Friday! And this Friday there won’t be one either, unless the weather takes a U-Turn! My beloved Cardinals now head to the Capital to play 3 games before returning home. I just don’t get how they can score 9 runs one day, and get shut out on 2 hits the next game… UGH!  That’s 3 times in the past week they were shut out!  Double UGH! The Hooters takes us to the finish line today, with this 80’s hit song: All You Zombies…  “All you zombies hide your faces, all you people in the street”… I hope you have a Marvelous Monday today, and will BE Good To Yourselves!  (talk to you Wednesday)

Chuck Butler

 

April 15, 2021

* Currencies & Oil rally on Wednesday… 

* Margin Debt is soaring once again, we had better beware… 

Good day… And a Tub Thumpin’ Thursday to you!  Well, the visit to the heart doc went well yesterday. My heart is functioning better, and is much stronger than when he first saw me in 2017…  That was right after I had been on huge doses of steroids for over a year, and apparently they did major damage to my heart… But that’s all in the past now, and with me losing weight, should be much better going forward.  We had a wonderful dinner last night at a restaurant, where we met Grace’s mom, Lori… What a Southern Belle! For those of you not keeping up… Grace is youngest Son, Alex’s steady girlfriend, now for about 4 years!  Grace is from Arkansas… and was the alternate rifle shooter at the Rio Olympics… So, I don’t mess with her! HA!   But what a joyful evening with my kids,  and little Evie, and getting to meet Lori…  Kansas greets me this morning with their song: Song For America…  It’s a rock classic that’s over 9 minutes long!

Well, the currencies sure did like the fact that I was away for the day yesterday… Just like in the days of old they rallied while Chuck was away!  The dollar started the day getting sold and ended the day getting sold and all points in-between getting sold… The Dollar Index which ended the day on Tuesday at 91.93, and ended the day on Wednesday at 91.62… We’ve seen this drop in the Dollar Index before and every time it looks like it’s headed to the deep south, the Plunge Protection Team (PPT) steps in and buys dollars to protect it, and then we have to put up with a week or so of the Dollar Index heading higher, but has been the recent trend, it turns around and heads south again eventually…

Yesterday’s dollar selling was brought about curtesy to the strong & stupid CPI (consumer price index/ or consumer inflation whichever you care to call it) Here’s a snippet of the report I received from the folks at MarketWatch.com “Consumer prices rose in March for the fourth month in a row and the pace of inflation hit the highest level in two and a half years, underscoring new pressures emerging on the economy as the U.S. recovers from the coronavirus pandemic.

The consumer price index jumped 0.6% last month, the government said Tuesday, spearheaded by the rising cost of oil. Economists polled by Dow Jones and The Wall Street Journal had forecast a 0.5% increase in the CPI.

The rate of inflation over the past year shot up to 2.6% from 1.7% in the prior month, marking the highest level since the fall of 2018.”

Ok, this is what I was talking about earlier this week about how the numbers are going to be skewed because of the base numbers being during the pandemic…  President Biden echoed the words of Cartel Chair, Jerome Powell, yesterday, saying that he believed inflation will only be temporary… Ahhh, even the president gets to play spin doctor, eh?  This is where I’m torn between two lovers… While I firmly believe that inflation is here and spreading like wildfire, I’m torn because actual wages in the U.S. have fallen for 3 consecutive months, and that’s deflationary… So, something has to change there for me to be “all-in” on inflation staying…  If I were a gambling man, I would bet on inflation coming and staying awhile… I’m just saying…

So, let’s see… Monday Gold was down, Tuesday Gold was up, and Wednesday Gold was down, so it’s Gold’s turn to have an up day! UGH!   Gold dropped in price by $9.40 yesterday to close at $1,737.40. And Silver was up 7-cents to $25.50…  I’m thinking that everyone including all traders haven’t gotten the memo from the Cartel that they have started their Yield Curve Control (YCC)…  Don’t look now but the yield on the 10-year Treasury has now fall to 1.59%… It was just two weeks ago that people were celebrating the 10-year’s yield at 1.80%…  

I have to feel that once everyone gets on board that the Fed is buying so many bonds to keep yields from rising that Gold will finally get back on those rally tracks it was on last year, when it climbed to $2,000…  At least that’s what I’m thinking will happen… 

Dodododododododo…  we just went back in time to last year, when the yield on the 10-year treasury was .76%, and Gold was rising daily… But then the bond traders began seeing signs of rising inflation, and the next thing we knew the 10-year’s yield was back to 1.00%, and Gold was off the rally tracks…  OK, now we can go back to the future…

OK… onto other things… While the euro was rising within the 1.19 handle, the price of Oil was also rallying yesterday, gaining almost $3 in price, to $62.95..  so we had two of three anti-dollar assets moving higher VS the dollar.. The third anti-dollar asset, Gold… wasn’t able to join its peers… One of these days Alice…. To The Moon!

In The overnight markets…. the dollar selling has abated, and the Dollar Index, this morning, is still 91.62… So no movement overnight in the currencies, but… As I said above today is Gold’s day to rally, and it is in the early trading today Gold is up $13.10, and Silver is up 18-cents, so a good day for these too so far, but I would certainly like to see these early gains get added to as the day goes one… 

The rise in the price of Oil has the Petrol Currencies all lathered up and their jeans pressed tight for a good night! The beaten and battered Russian ruble has even joined in on the Petrol Currencies rally…  Shoot Rudy, the Mexican peso is below 20! 

And recently a dear reader wanted to know why I don’t talk about the Aussie dollar and kiwi any more, or like I used to?  Well, here you go… After looking like the A$ might begin a ride on the slippery slope, it has turned around and is now on the rally tracks again, along with its kissin’ cousin across the Tasman, kiwi… 

The Fear Factor is still upon us folks… Just when folks were beginning to come out from under their rocks that they have confined themselves to for over a year, there had to be something the powers that be, could bring up that would induce them to go back under their rocks…  I’ve had it with all this keeping us under lock & key and not living our lives…  We live with risk every day! The moment you walk out of your house each day you’re taking a risk, when you start your car you’re taking a risk… The world just needs to accept the risks they are willing to live with, and move on with their lives, and not be influenced by the Fear mongers…  I’m just saying!

OK, sorry about that tangent… I have no idea why I began to type that and before I knew it, the paragraph was finished, and now I have to somehow get back to the markets… Let’s see how that goes! HA! 

So… today is the day… The day when we get a plethora of economic data… First up with the Usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims… This data has seen weekly claims rise the last two weeks… One has to wonder what today holds?    Next up is Retail Sales, and like I said on Monday the BHI tells me that while there may be a recovery of Retail Sales in March, it’s not going to be anywhere near what March usually holds for us in regards to Retail Sales…   Then we’ll see the color of Industrial Production and Capacity Utilization…  IP is supposed to rebound from Feb’s negative -2.7% print, and CAPU is supposed to rise to 75 from 73…   Hmmm….

OK riddle me this Batman… if for the most part businesses especially in Manhattan, are finding that having employees working from home isn’t exactly ideal, but works, and they’re staying with it for now, why would these same Businesses be spending money on Capital improvements, when no one is going to be there to use them?  Because that’s what the so-called experts are telling us is happening by forecasting a big rise in CAPU…

There are a few other data prints today, that don’t really move markets, so we’ll just leave them at the side of the road, in hopes that someone picks them up!

To recap… Chuck was away, so the currencies rallied yesterday, and the price of Oil rose, but Gold lost $9.40 on the day, while Silver rose 7-cents.. . The dollar got pummeled by the strong and stupid CPI print that showed year on year consumer inflation at 2.6%… But as I explained earlier this week the year-on-year numbers are going to skewed because the base being used is last year during the height of the pandemic.  And Chuck goes off the deep end this morning with a discussion that belongs on the Butler Patio, and not in the Pfennig! Oh well, whatcha gonna do when the money is all gone?

Before we head to the Big Finish today, there’s something else I want to talk about… On Tuesday it was reported that margin debt in the U.S. markets has reached $814 Billion, That’s Billion with a Capital B!  Longtime readers may remember me telling them in a past life I ran a margin Dept for a Midwest Brokerage Firm. I was the youngest person to hold that position ever in that company!  But I digress…  So, I know all about margin, how it works, and where the pressure points are…   Ok, having said that, let me also say that, the last time Margin Debt grew that much was in 2007, before the Great Recession. And the time Margin Debt grew that much before that was 1999, just before the dot com implosion.

Doesn’t that give you the willies?  It does me… And I can hear the margin clerks now calling investors on the phone and telling them their account fell below min. Margin, and they need to deposit stock or money to meet the margin call, or else… They will begin to sell stocks to bring the account back into regulation…   Those are NOT calls you wan to be taking folks…  so this is a public service announcement, to remind you to have those stop losses updated!

For What It’s Worth…  Anything you can do I can do better… Sing that song and it’ll be in your head the rest of the day… I say that because it appears that President Biden has sung the song, and is now proving he can do better… This article talks about the debt explosion in March, and it can be found Here: March Deficit Blowout: US Spends 3.5x More Than It Brings In; YTD Deficit Is Biggest Ever | ZeroHedge

Or, here’s your snippet:” The Covid crisis may be over (with nearly 60% of the population vaccinated, one would certainly hope it’s over), but covid crisis spending is here to stay.

At 2pm, the Treasury released its latest Monthly Treasury Statement which showed that in March, the US budget deficit exploded once again, surging to $660BN, up five-fold from a tiny $119BN last March, driven by a 160% increase in government Outlays which soared to $927 billion – the third highest on record – from $355.7BN a year ago, and from $559.2BN in February.

The large spike is primarily due to the stimulus checks released to households after the passage of the American Rescue Plan (ARP) Act which totaled $339bn and included forgiveness of roughly $87bn in Payroll Protection Program (PPP) loans in March. In total, the government spent $453bn on “income security” in March, with social security ($94BN), Commerce and Housing Credit ($81BN), Health ($71BN), National Defense ($70BN) and other spending far in the rearview mirror.”

Chuck Again…  It’s a race to see who can outspend who… And we, U.S. taxpayers will feel the pain of all this deficit spending in the coming years…

Market Prices 4/15/2021: American Style: A$ .7751,  kiwi .7166, C$ .8000, euro 1.1970, sterling 1.3797, Swiss $1.0832, European Style: rand 14.2100, krone 83860, SEK 8.4593,  forint 299.71,  zloty 3.8052,   koruna 21.6626, RUB 75.76, yen 108.77, sing 1.3341, HKD 7.7677, INR 74.98, China 6.5316, peso 19.95, BRL 5.6957,  Dollar Index 91.62,  Oil $62.75,   10-year 1.59%, Silver $25.68, Platinum $1,196.00, Palladium $2,796.00, Copper $4.16, and Gold… $1,750.50

That’s it for today…  Well, our Blues couldn’t stand the heat of an important game last night, even though they rallied in the 3^rd period, they couldn’t win… UGH!  And after scoring 14 runs on Tuesday night, my beloved Cardinals got shut out in yesterday’s day game… I drowned my sorrows with a zero sugar Gatorade last night… UGH!  But seriously, these outcomes were all forgotten about while I had that joyful dinner last night! My primary doc sent me a note yesterday saying he wanted to see me next week… So now I have two  doctor appts next week! Then I’m finished with doctors this month! Reminds me of that old PeeWee Herman skit… I say we shoot ‘em, I say we shoot ‘em then hang them, I say we shoot ‘em, then hang ‘em, and then kill them… And Pee Wee says, I say let him go! HAHAHAHAHA I was a huge fan of Pee Wee Herman, until…  My Cardinals play this weekend in Philly VS the fighting Phils… with all their high salaried players…  Billy Squier takes us to the finish line today with his song: In The Dark…  send me a note if you’re still reading, OK, Bill?  I hope you have a Tub Thumpin’ Thursday, a Fantastico Friday tomorrow, and a Wonderful Weekend, and please Be Good To Yourself…

Chuck Butler

April 13, 2021

* Currencies & metals lose ground on Monday

* Yellen says China is not a currency manipulator! 

Good Day… And a Tom Terrific Tuesday to you! Well, I do believe the pool deck workers have finally finished, but we can’t walk on it until tomorrow… That means I have to find a different place to sit out and read…  My beloved Cardinals are proving me to be correct, with my Spring Training thoughts about how they can’t hit… They are in need of a Big Bat, lefthanded preferably, that plays the outfield… Chances are… They’ll still be needing that at the end of the season! UGH!   Our Blues had their game postponed last night, and next play in Colorado on Wednesday. There aren’t a lot of what you would call Big Games in hockey’s regular season, but… Tomorrow night’s game is a Big Game for the Blues… Yes, greets me this morning with their song: It Can Happen… 

Well the dollar bugs fought back yesterday, and the dollar saw it’s best day in a week… the moves weren’t strong moves, but moves in the dollar’s favor nonetheless…  The euro dropped back below 1.19, and the Dollar Index rose from 92.02 yesterday morning to close at 92.21…  And Gold & Silver didn’t help any VS the dollar, as Gold lost $11.60 on the day to close $1,733.70, and Silver lost 47-cents to close $24.88…  The Gov’t is spending currency like there’s no tomorrow, the Cartel is printing currency like there’s no tomorrow, and the current debt is more than $28 Trillion, and the all-time best safe haven asset (Gold) is getting sold… Go figure…

In the overnight markets… There hasn’t been much movement in the currencies, as evidenced by the Dollar Index, which is trading at 92.24 this morning up from last night’s close of 92.21…  Silver is outperforming Gold this morning, with Silver up 16-cents in the early trading, while Gold stumbles out of the starters’ gate, down $2.90…  

Well…  Yesterday, I wrote about how we needed to be on the lookout for how the inflation rate is calculated on a year -on-year basis, because of the awful prints in the early months of the pandemic, and guess what the good folks at GATA sent me yesterday? An article on Bloomberg talking about that same thing… I got this from: https://www.bloomberg.com/news/articles/2021-04-12/simple-math-is-about-to-cause-an-inflation-problem-quicktake  And here’s a quick snippet from the article:

“No economic question is being debated more right now than whether the United States will see a sharp rise in inflation. But the answer for the next few months is simple: Yes.

Due to the way the government’s inflation metrics are calculated, what will appear to be significant price increases are all but guaranteed. The phenomenon is known as the base effect, a term worth keeping in mind when new figures make the argument even wilder.”

Chuck again… Crazy how that works isn’t it… Makes me wonder, do the folks at Bloomberg read the Pfennig? Nah… That couldn’t happen, they’re the Big Boys, they don’t need to read the Pfennig!

But if they did… That would be a hoot and half!

OK.. So… Treasury Sec. Janet Yellen, announced yesterday that the U.S. would not name China a currency manipulator…  Boy I can see the Chinese back slapping with congratulations for each other on what a great job they did, hiding their currency manipulation from the U.S. !   HA!  Well, no, really I see them saying, “so what”… “Who cares”…  We’re China and we do what we want to do whether the U.S. agrees with it or not”… So, the renminbi rallied on the day after the announcement… Hmmm…  You know I think I’ve told you this before, but stay with me here… My dad used to tell me that China was a sleeping giant, and the world would behoove itself to not wake them up…  Well, we woke them up about 20 years ago… And ever since, they’ve been out to gain governance of the world!

Speaking of China…  Long ago, and oh so far away, I fell in love with you, before the second show… OMG! Quit that Chuck!  OK… so long ago, I told people that China was gaining a wider distribution of their currency by having these currency swap agreements signed between China and its trade partners, and that a wide distribution of their currency was the first step to gaining a reserve status for the renminbi. The other BIG Step was to have a bond market, that their trade partners could invest their profits in and not have to convert their renminbi holdings to dollars to buy U.S. Treasuries…

Well, yesterday, I was reading the “5” by Dave Gonigam, (Five Minute Forecast)  and came across this bit of information from James Rickards… “China is also creating a Chinese yuan bond market so the countries who earn trade surpluses in yuan will be able to invest in yuan-denominated government bonds instead of being forced to buy U.S. Treasuries.”

Chuck again… all I have to say to that is… Uh-Oh, spaghetti O’s…  (for the dollar!) Now, it will take China a few years to get up and running with a bond market folks, things like this do not happen overnight, but this is just another in the long run of things that will act as a gauntlet for the dollar down the road…

And things in Russia/ Ukraine seem to be heating up again… The last time these heated words turned to armed action, the ruble got whacked badly, and this time, the ruble is already getting whacked because traders are certain that these heated words will turn to armed action once again… For all of you who own rubles, I would simply say that this is a time to batten down the hatches, and don’t open the hatches to look out until the all-clear horn has sounded…  Well, that’s what I’m going to do with my rubles… I’m just saying…

Ok, yesterday I told you I had a graph that showed the loss of buying power in the dollar through the years that the Cartel has been around… And since I can’t get it on the letter I’ll give you the items and let you see it that way… 

A dollar, in 1931 would buy 30 Hershey Bars it would cost you $26.14 today

A dollar, in 1922 would buy 10 rolls of Toilet paper, it would cost you $15.14 today

A dollar, in  1923 would buy 10 bottles of beer, it would cost you $19.91 today (unless you at the ball park where 10 bottles of beer would be $100!

A dollar in 1944 would buy 20 bottles of Coke, it would cost you $14.71 today

A dollar in 1964 would buy you 1 drive-in movie ticket, it would cost you $8.35

There are more but these really show the loss of buying power in a Big way… courtesy of the Cartel’s monetary policies through the years, and Congress’s inability to to rein in deficit spending…

I’m sure you have some examples of loss of buying power too… Because as I’ve always said, inflation is a personal thing…

OK… well the U.S. Data Cupboard last Friday has the March PPI (wholesale inflation), which surprised everyone in the markets, but not me, by rising at the fastest annual rate since 2011! The 1.0% monthly rise should be an indicator of how strong CPI (consumer inflation) will be, because, I don’t think Companies can not afford to not pass on the price increases they’ve received to consumers…

And this morning the stupid CPI will print… There’s no telling what the stupid CPI will print, because of all the hedonic adjustments that are made to it before it gets ready for prime time…

To recap…   The dollar bugs fought back on Monday, and the Dollar Index rose to 92.21 from 92.02… Gold & Silver lost ground on the day, as well as the euro which fell back under the 1.19 figure on the day. Chuck talks some more inflation today… And also talks about China being left off the list of currency manipulators, along with a batten down the hatches warning for rubles.. . And the overnight markets didn’t bring about any change, although the buying of dollars was muted so to speak… 

Before I head to the Big Finish today, I just wanted to give a head’s up on something I will most likely be talking about tomorrow… Long time Reader Bob, sent me a link to a talk by Catherine Austin Fitts, who I like to listen to, and she’s going to be talking about “The Great Currency Reset”…  I didn’t have the time to listen this morning, so that’s my charge for today! 

For What It’s Worth…  Well, it’s been a couple of weeks since I highlighted an article by Pam and Russ Martens of www.wallstreetonparade.com . They do such a great job of researching and digging into stuff that most journalists just forget about… Well, this article is about the Jerome Powell interview on 60 Minutes, and it can be found here: Fed Chair Jerome Powell Goes on 60 Minutes to Present a False Narrative on Mega Banks He Supervises Loaning Out their Balance Sheets to Hedge Funds (wallstreetonparade.com)

Or, here’s your snippet: “The CBS “investigative” program, 60 Minutes, gave Wall Street a pass again last night.

This time around 60 Minutes’ host Scott Pelley interviewed Federal Reserve Chairman Jerome Powell. The Fed, and by extension, Powell, are in charge of supervising the holding companies of the mega banks on Wall Street, including those involved just two weeks ago in loaning out their balance sheets to the tune of tens of billions of dollars to a hedge fund run by a man previously charged with insider trading and stock price manipulations. The man is Sung Kook (Bill) Hwang and the hedge fund is Archegos Capital Management. (Fed-supervised mega banks loaning out their balance sheets to hedge funds for nefarious purposes was previously exposed in 2014 in an in-depth report and hearing by the U.S. Senate’s Permanent Subcommittee on Investigations. The practice has clearly metastasized since that time.)

The 60 Minutes interview comes just two weeks after Archegos blew itself up, along with generating billions of dollars in losses at the mega banks that allowed it to take on obscene levels of leverage in a replay of the financial crisis of 2008 – something that the Fed has continuously assured Americans could not happen again under its oversight.

Rather than dig deep into the insidious rot of the Fed as a lapdog regulator, Pelley devoted just a brief and shallow part of the interview to the topic of what happened at Archegos. ” (failed hedge fund that’s been in the news) 

Chuck again… OK, this is a very good article, and has a transcript of a question the interviewer asked Powell… Powell claims that “this incident doesn’t really raise questions about the stability of the financial system or of those institutions, which are mostly foreign banks.”

Yeah, what did I tell you yesterday, to get used to the Gov’t and Cartel selling you snake Oil?  This is a hefty dose of snake oil folks… 

Market Prices 4/13/2021:  American Style: A$ .7601,  kiwi .7021, C$ .7926, euro 1.1891, sterling 1.3723, Swiss $1.0812, European Style: rand 14.6323, krone 8.5581, SEK 8.5846,  forint 301.97,  zloty 3.8341,  koruna 21.8667, RUB 76.36, yen 109.37, sing 1.3433, HKD 7.7736, INR 75.42, China 6.4889, peso 20.17, BRL 5.6877,  Dollar Index 92.24,  Oil $60.03,  10-year 1.68%, Silver $25.05, Platinum $1,173.00, Palladium $2,760.00, Copper $4.05, and Gold… $1,730.80

That’s it for today… and tomorrow… Yes, sorry about the short notice, but… no Pfennig tomorrow, as I have an appointment to see my heart doctor bright and early in the morning tomorrow. The last time I saw him he told me the good news that my heart function had improved from 60% to 85%… I would have to think that it’s gotten even better with my recent weight loss!  We, here in the Midwest will be getting chilly days for the next 10 days! UGH!  I want to go back to Florida, where it’s 80 and sunny! I sit around with a sweatshirt on all day and evening… Too darn chilly for me! Next week I go to see my oncologist, and then I’m finished with doctors for this month! It’s April, the weather is chilly, and we’ve got our pool open and ready to go…  UGH!  Same as last year, but last year was quite different, with the plandemic going on… That wound I received on my arm last Monday, is taking its sweet time healing. UGH!  Mama’s Pride takes us to the finish line today with their song: Blue Mist…  Mama’s Pride was a St. Louis band back in the day… And I always loved this song!  I hope you have a Tom Terrific Tuesday today, and will be Good To Yourself!  (remember! No Pfennig tomorrow!)

Chuck Butler

 

April 12, 2021

* Dollar Index continues to head downward… 

* Chuck talks about inflation today… 

Good Day… And a Marvelous Monday to you! The weather over the weekend turned chilly once again, as I’ve said before April’s weather is a crapshoot…  But Friday was marvelous, weather wise, and I held a driveway happy hour, for neighbors and friends, and… My old World Markets Desk… All the folks, except one, made it out to my little river town, and we sat out, and got to see each other face to face and have some great conversations! Then we finished the night with our good friends, Gus & Dianne at dinner… It was fun seeing all my former colleagues’ faces… and catching up on what’s new?  And then that night, a cold front moved through, with rain, and Saturday was a dud… Sunday was a little better, but still pretty chilly… UGH!  The band Lighthouse, greets me this morning with their rock classic song: One Fine Morning…  “one fine morning girl I’ll wake up, wipe the sleep from my eyes… “

Well… Friday’s price action in the currencies was almost a non-event, But the currencies did rally just a tiny bit on the day, with the euro holding onto the 1.19 handle, and the Dollar Index falling from 92.22 to 92.16…  And Gold lost $11.60 on the day to close at $1,742.20, and Silver lost 19-cents to close at $25.30… I just don’t get it about the price action of Gold these days… I’m a person that looks at facts, in fundamentals, and then compares them with what has happened in the past when these fundamentals existed, and then combine them and voila! I get a current picture of where something should be going in price…  And Gold has all these ducks in a row for it to be climbing steadily each day, higher and higher… 

I will say this though, the way the Treasury yields steadily climbed higher in the last 9 months was something to be concerned with, but now with the Cartel’s Yield Curve Control (YCC) that should be the end of all that fear that Treasury yields would return to normal levels, and then attract so much investment that it would leave Gold out in the Cold… But with the YCC in the Cartel’s back pocket now, Gold should be able to climb steadily…   And it’s not… 

And one more thought on what is holding Gold & Silver back… It’s the short sellers…  Did you know that in Silver the short positions equal 118 days of production? And Gold is about 75 days of production? On what planet on earth, does a regulator allow these kinds of short sales that are more than the asset’s total above ground?  Oh, that’s right…. The COMEX, and the CFTC…  THAT, my friends is a black mark on our country’s ability to regulate markets fairly and efficiently…  No wonder the Chinese said to hell with the COMEX 10 years ago and started the Shanghai Gold Exchange! Where short sales are not allowed!  Believe me, I could go on and on about how this shouldn’t be allowed in any universe, but it is in ours… UGH!

In the overnight markets… there was a little more slippage in the dollar, and that has given the currencies some good levels to start the week. The Dollar Index has fallen from 92.16 on Friday to 92.02 this morning.  Gold is down a buck in the early trading and Silver is down 8-cents… These sure are crazy times in the markets folks… probably crazier than I’ve ever seen before, and I’ve been associated with the markets since 1973! 

Well I had quite a few inquiries in the Pfennig Replies mail box asking me about inflation, and what was going to cause it to climb higher, since it hadn’t really done so yet…  It’s coming folks, and in some things like groceries, gas, heat, tuitions, insurance health and otherwise, etc. it’s already putting some folks in the red each month…  This form of inflation is called “Structural Inflation, and it’s derived by all the fake money being printed…  Here’s Bill Bonner from his rogueeconomics.com letter on structural inflation…  “Instead of increasing interest rates and thereby reducing demand for credit, the fake money increases debt loads, dependency, and the need for more cheap credit – more money-printing – to keep up with it.

“Structural inflation,” in other words, is not a natural feature of the business cycle. It is government policy. Intentional. Deliberate. And disastrous.” – Bill Bonner

Disastrous it is… because once it gets started… It will be difficult for the Cartel members to slow it down, and I have to think that they know that in their heart of hearts, and do not plan to attempt to stop inflation from rising because….. Remember when I told you many years, ago that the Gov’t needed inflation to inflate away the debt?  Well, the debt has grown by leaps and bounds since I first laid that idea on you many years ago… And I can’t imagine how much inflation we would need to inflate away our debt… Maybe Zimbabwe Inflation, maybe German inflation of the past, but it will certainly be more than the 14% that Fed Gov. Volcker slayed in the early 80’s…

And inflation is a kryptonite for the dollar.. You know, I saw a graph on inflation and the dollar’s loss of buying power over the weekend, and I hope to be able to reproduce it here for you tomorrow… And once you see this loss of buying power in the dollar, you’ll begin to realize that all the things I’ve talked about for years, have been going on, but you were led to believe, by the Gov’t, that there was no inflation… This week we’ll see the stupid CPI (consumer inflation) for March, and it should be heading to 3% even with all their hedonic adjustments, but it won’t… It’ll be lucky to breach 2%!  But as I told you last week, John Williams at www.shadowstats.com has inflation rising near 5%…  

One thing to keep in mind as we go through 2021, and the year-on-year prints of CPI come to light… Their base is a year ago, and what was going on a year ago? Nothing! Absolutely nothing, say it again!  No wait… Of course we were just starting our two -week shut down, no wait, that didn’t happen, but we were just starting a shutdown that would last throughout the summer for most states… And that is going to cause the CPI numbers to be skewed when compared to a year ago… As if the stupid CPI didn’t have enough hedonic adjustments to skew it each month already! UGH! 

OK, let’s talk about something else… Oh, this is important! My darn fat fingers got in the way on Thursday last week when I said that I would be on the virtual Money Show panel to speak about Gold & Silver on April 21^st (Frank Trotter’s birthday), but that was the wrong date, it’s actually April 22^nd. The links I provided were still good, and I’ll provide them again as we grow nearer to the date… I was so embarrassed when the first dear reader sent me a note and said I had the date wrong… I was like: These darn fat fingers, had the wrong date, even though I had the promotion staring me in the face as I typed! UGH!

Tsk, tsk, tsk… I’ve now lost 75 lbs and I still have fat fingers!  What the heck is going on here?  I think I could get down to my H.S. weight, and still have fat fingers!  Oh well, these fat fingers fly across this keyboard when I get them going, so they may be fat, but they are agile! HAHAHAHAHAHA!

A quick look at the U.S. Data Cupboard for this week tells me that except for the stupid CPI that will print tomorrow, we’ll have to wait until our Tub Thumpin’ Thursday, when a plethora of economic data will print, including Retail Sales, Industrial Production, Capacity Utilization, and the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims…  The only one I have a bead on right now is Retail Sales for March. You may recall that Feb’s Retail Sales were down -2.7%… The Butler Household Index (BHI) indicates to me that March’s Retail Sales will be very disappointing…  Even with the Easter holiday the first week of April, having some sales in March…

So, today’s Data Cupboard has the Federal Budget, but who cares any more how much currency we spend that we don’t have?  Americans have all become Comfortably Numb to the numbers…  And that’s a shame…

To recap… The currencies rallied by small amounts on Friday VS the dollar… Some of the moves were so small you couldn’t detect them without a price comparison from Thursday. Gold lost $11.60, and Silver lost 19-cents on Friday… Chuck talks about Inflation, and how it’s going to eat away at your buying power, as the dollar’s value gets whacked by inflation… In the overnight markets… There’s been more slippage in the dollar’s value, as the Dollar Index has fallen to 92.02 this morning, and Gold and Silver are down a smidgen this morning… 

For What It’s Worth… Since I spent a lot of time on inflation this morning, I thought you might like to hear what Cartel Chairman Powell, had to say about inflation… (if you’re like me, then you would like to skip anything Powell has to say!)  Apparently he and I went to different economics classes because I’m not buying what he has to say, and you shouldn’t either… Today’s FWIS is actually a 4:40 in time, video on YOUTUBE…  And the video can be found here: https://www.youtube.com/watch?v=Y2GwFiLhZZw

Or, here’s your snippet” At the Debate on the Global Economy hosted by the IMF this week, Fed Chair Jerome Powell once again re-iterated that he sees a temporary spike in prices, but that inflation would not be a long-term, persistent force.

“There’s a difference between essentially a one-time increase in prices and persistent inflation. When we say inflation that’s what we mean. We mean persistent inflation that goes up by 2% or 4% or whatever it is, year after year, and that level of inflation tends to be dictated by underlying inflation dynamics in the economy, as opposed to things like bottlenecks,” Powell said.

Powell added that bottlenecks in the supply chain will be resolved, therefore, any price increase from a “temporarily tight” supply side would likely not repeat the following year.

Higher levels of inflation are not a phenomenon that advanced economies have seen over the past two decades, he added. “

Chuck again… you may as well, get used to Gov’t and Central Bank leaders selling you snake Oil… For that’s all they have left to sell you… They’ll probably be telling us that they still have things under control when inflation is passing 10%…  I’m just saying…

Market price  4/12/2021: American Style: A$ .7630,  kiwi .7047,  C$ .7976, euro 1.1911, sterling 1.3766, Swiss $1.0826, European Style: rand 14.6036, krone 8.4791, SEK 8.5610,  forint 299.21,  zloty 3.8002,  koruna 21.8797, RUB 77.38, yen 109.32, sing 1.3404, HKD 7.7754, INR 74.96, China 6.5520, peso 20.15, BRL 5.6798,  Dollar Index 92.02,  Oil $60.03,   10-year 1.66%, Silver $25.27, Platinum $1,188.00, Palladium $2,527.00, Copper $4.06, and Gold… $1,733.20

That’s it for today… A very fun home opener for my beloved Cardinals was about the only bright spot of the weekend, as they lost 2 of 3 games… They began the season with a 5-4 record for the first 9 games, and I expect that unless something changes in their roster, that they will hover around .500 all year…  Our Blues had a good weekend wining both Friday and Saturday… Let’s Go Blues! Little Evie came to spend the night with us on Saturday night… She’s my buddy again now, and we played with a ball, I read her 6 books, as she sat still on my lap, which is very unusual for this little girl!  We had a mini-dance party, and she blew me a kiss when she left… ☹ I was just glad she warmed up to me again… I had some strange days Saturday and Sunday… My legs felt like they weighed 200 lbs a piece, and hurt when I walked… And going up and down stairs was not fun! I slept most of Saturday, as I couldn’t wake up, and Sunday I just sat in a chair outside most of the day… UGH!  I’m hoping I bounce back today… The great Barbara Lewis takes us to the finish line today with her song: Baby, I’m Yours… “And I’ll be yours until the rivers all run dry”…  I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler