Author: admin

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

 

 

April 8, 2021

* Currencies are back on the rally tracks this morning… 

* Gold & Silver recover nicely and head north! 

Good Day… And a Tub Thumpin’ Thursday to you! My beloved Cardinals got out their brooms yesterday as they swept the Marlins in a 3 game set… A HUGE home run by long time fan fave, Yadier Molina was the margin of victory… Today is the Home Opener… That is if the rain allows it to be! I saw rain yesterday for the first time in over a month! And it’s coming back today just for good measure. The rain has pushed back the schedule that our pool deck will be finished, but that’s no biggie, as we have the whole month of April left to get that done.  Our Blues  ended their losing streak at 7 games, with a 3-1 win last night… It’s finally time they won a game!        Radiohead greets me this morning with their song: Karma Police…

The old saying that I coined many years ago is that A Trend, is not a one-way street…  And that’s what we saw yesterday, as there had to be some profit taking and a bit of selling short, on the day, as the euro, the Big Dog, lost about 1/3^rd -cent. The Dollar Index gained on the day from 92.22 in the morning to 92.44 at the end of the day.  Gold found a way to rally during the day, and had erased its $8 loss in the early trading, but then to close out the day, a flurry of short gold paper trades hit the market, and Gold ended up losing $6.00 on the day… Silver didn’t see a flurry of short Silver paper trades and it ended up only losing a nickel… Which was far better than in the early trading when Silver was down 26-cents… 

In The overnight markets… The dollar was back to getting sold overnight, as the euro, the Big Dog, climbed back to 1.1880, and the Dollar Index dropped back to 92.26…  Gold is back on the rally tracks this morning, with the shiny metal up $9.90 in the early trading, and Silver is kicking some tail up 25-cents this morning.  If these gains in the currencies and metals hold throughout the day, then it will confirm to me in my mind that yesterday’s trading was simply profit taking… 

Well… I had a dear reader ask me what was the problem with the vaccine passport?  I didn’t respond to him because… If you have to have your freedom of movement limited explained, then I’m at a loss to explain it any different than I did yesterday….   

Today is the day that my interview with Dennis Miller of milleronthemoney.com gets printed, and posted to his website…  I’m going to use some of that letter as my FWIW article today…  In the meantime, publishing guru, and best selling author, Bill Bonner, basically wrote a review of the letter without knowing it! He pointed out that China’s digital currency is a BIG DEAL….  He also had this to say in his letter rogueeconomics.com “The U.S. feds can control many elements in their fantasy world.

They can create “money” out of thin air. They can create make-work jobs. They can increase ersatz “demand” – by giving away more fake money. They can goose up stock prices… and suppress interest rates.

The thing they can’t do is control the value of their phony-baloney dollars.

And when it becomes more obvious that the morons have lost control of the dollar, the new digital yuan may look like a handy alternative.” – Bill Bonner

Chuck again…  OK… Well if you want evidence that the Cartel is implementing their Yield Curve Control (YCC), you don’t have to look any further than the movement in the 10-year Treasury’s yield, which has been moving downward for over a week now…  Going from 1.78% to 1.65% this morning…  Basically, in bond, when you buy a ton of bonds, the price will rise and the yield goes down, and vice versa when there is a ton of selling of bonds, the price would go down and the yield would go up…  In the Cartel’s YCC they would be the buyer… thus the drop in the yield in the last week…

In the Cartel’s meeting minutes yesterday, the Cartel’s members were split on their takes of how inflation is rising… I took this from MarketWatch.com “Several” Fed officials said that supply bottlenecks and strong demand would push up price inflation “more than anticipated,” the minutes said.

At the same time, “several” other Fed officials expressed belief that the factors that had contributed to low inflation over the past decade “could again exert more downward pressure on inflation than expected.”

Chuck again… And in the end the cartel believes that inflation for 2021 will reach 2.4%…  I’m going to call them out on that, and say malarkey! Balderdash! Hokum! And so on….  John Williams at Shadowstats.com says that real inflation is running just below 5%…   And it’s rising!  A week or so I titled a Pfennig with these words; If The Fed Really Wants Inflation, They Should Calculate It Correctly! Is that so correct! 

OK… China’s digital currency… I’ve told you previously that all countries are developing their own digital currency… It’s just that China was first… And they will be able to trade in the blockchain with their digital currency, which means…. Countries around the world will be holding digital yuan/ renminbi as reserves… And reducing the dollars they held as reserves…

The question in my mind is this… What is the U.S. going to do about this, for this does not bode well for the dollar’s future as a reserve currency…  And this is where we drop down into a deep rabbit hole folks…  Will this mean war with China? Will there be financial sanctions on China?  There are a myriad of things that could come about and none of them are good for relations between the U.S and China!

The U.S. Data Cupboard yesterday had the aforementioned Cartel Meeting Minutes… So with that out of the way, we can concentrate on the other two prints yesterday… with the first being, The Feb. Trade Deficit, which rose to $71.1 Billion from $67.8 Billion in Jan…  And the Consumer Credit for Feb (read debt) grew $2.7 Billion…   Let’s see, first off I know this isn’t how it works, but let’s just play with this and see what Chuck has in mind…   the difference in the Trade Deficit was $3.4 Billion, and the increase in Consumer debt was $2.7 Billion…  That’s very interesting to me how close those two are to matching…

Today’s Data Cupboard will have the usual Thursday fare of Weekly Initial Jobless Claims…  Now you may recall that 3 weeks ago, the number of Claims fell below 700,000 for the first time during the pandemic phase…  But then two weeks ago, they climbed back above 700,000 to 719,000… So, it will be interesting to see what’s going to print here today…   

Well I didn’t have to wait too long for the number to print, and since the letter is a little later this morning, the Weekly Initial Jobless Claims rose last week to 744,000… Ahem, the last two weeks of claims seem to be going in the wrong direction…  What do the spin doctors say about that? 

Before we head to the Big Finish today, I wanted to point out something that I’ve talked about for a few years, and that is to watch the Euro-wannabes for they will indicate if the dollar is really in a weak trend… So, who are the euro-wannabes?  The Hungarian forint, the Polish zloty, and Czech koruna…   Just the other day there was a blurb from the GATA folks that Hungary had increased their Gold reserves by a HUGE amount… And I don’t know if you follow these three, but the forint has dropped from the 308 handle to 301 in the past week… And the koruna, after months of trying has slipped below the 22 figure..  So, these three are in rally mode… 

I’m well aware of the fact that they have been in rally mode a couple of times in the past and their moves proved to be false dawns…  The dollar always seems to get rescued from a ride on the slippery slope by the Plunge Protection Team (PPT)…  But one of these days, Alice… to the moon! (for the currencies, not the dollar!) 

To recap… The currencies saw some profit taking yesterday, and their recent trend of rallies proved once again that a trend is not a ONE-WAY Street!  Gold worked diligently to rid itself of its early morning loss of $8, but a flurry of short Gold Paper trades flooded the market at the close and Gold ended down $6…. Silver erased all but 5-cents of its 26-cent loss in the early morning trading. Chuck talks about Inflation, the Chinese digital currency, as does Bill Bonner too!   Chuck points out that the Cartel’s YCC appears to be being implemented…

For What It’s Worth… Ok, as I said above, I have a snippet of the article where Dennis Miller interviewed me regarding digital currencies… So, that article can be found at Dennis’s website, or if you subscribe to his letter, it’ll be in your email box this morning, but it can be found here: www.milleronthemoney.com

Or, here’s your snippet: “ Dennis asks, Doesn’t “slowly lose value” mean negative interest rates – confiscation?

CHUCK: Thanks again Dennis to allow me to opine here…

To answer your question, yes it does mean negative interest rates. The thing that I keep talking about is the fact that the banks will then be able to charge you for logging into your account, and everything else, and there’s nothing you can do about it, because…. Well, the “money” is digits.

And, if you want to move your digits down the street to a different bank – that’s not going to help you, because banks will all be under the same fee schedules. Of course, price-fixing is illegal, wink, wink!”

Chuck again…  This is a powerful article folks, and one that I wish everyone would read, so they can begin to protect their accumulated wealth… if not for you, then your kids, or grandkids…

Market Prices 4/8/2021: American Style: A$ .7644,  kiwi .7050,  C$ .7946, euro 1.1880, sterling 1.3765, Swiss $1.0782, European Style: rand 14.5268, krone 8.4798, SEK 8.5876,  forint 301.80,  zloty 3.8313,  koruna 21.7887, RUB 77.28, yen 109.15, sing 1.3401, HKD 7.7779, INR 74.53, China 6.5392, peso 20.15, BRL 5.5980,  Dollar Index 92.26,  Oil $59.62,  10-year 1.65%, Silver $25.45, Platinum $1,237.00, Palladium $2,694.00, Copper $4.08, and Gold… $1,748.50

That’s it for today… Opening Day in St. Louis… it doesn’t get much better than that! I used to get invited to every opening day but, those were the days my friend, we thought they’d never end… It’s funny how business relationships end when you leave… Out of sight, out of mind, and I thought they were my friends! UGH!  Oh, well, if it’s going to be a rainy day, I think sitting in my back yard and watching the game will do me just fine! I’ll still get the goosebumps when those beautiful Clydesdales come trotting into the stadium!  Tomorrow is Friday, and it will be a Big Day for me for a number of reasons, of which I’m not going to talk about now… OK.. this is BIG NEWS!  On April 21 (Frank Trotter’s Birthday) at 4:30 EDT I will join my publishers, Mary Anne and Pamela Aden, along with Omar Ayales on a virtual panel to discuss Gold & Silver…  This is being put on by the Money Show folks, and if you want to register to watch and listen to what we have to say, click here to register: https://online.moneyshow.com/2021/April/money-metals-and-mining-virtual-expo/registration/?scode=052516    I hope you all inundate the system and overload it with large numbers of people that have registered… In fact, I’ll be very disappointed if that doesn’t happen! 

On a sidebar… The woman who puts these things together at the Money Show, contacted me and wanted a bio and picture of me…  I said, “I don’t know if you were there or not, but… I used to speak at Money Show presentations 3 to 4 times per year.Surely you have that info and phot on file… And she said, “Oh, of course, I remember you now Chuck Butler, we’ll use what we have”… Whew, I did not want to write another bio!

Ok… The Climax Blues Bank takes us to the finish line today with their 80’s song: Couldn’t Get It Right… “kept on looking for a sign in the middle of the night, but I couldn’t get it right”….  I hope you have a Tub Thumpin’ Thursday, and please Be Good To Yourself!

Chuck Butler

 

April 7, 2021

* currencies rally again on Tuesday… 

* Gold & Silver have a good Tuesday, but are down today… 

Good Day… And a Wonderful Wednesday to you!  That was a real grinder of a game last night, but my beloved Cardinals rallied and won 4-2.. Baseball games can be exciting, full of action, and slow and grinding at the same time… I love baseball…   We had the pool deck coating removed yesterday for a new coating, and talk about a mess! I’m sure some of my neighbors will be complaining about the dust on their patios! But there’s no other way to do the job… I guess we’ll have to offer to clean their patios and decks… UGH!  Johnny Nash greets me this morning with his rock classic song: I Can See Clearly Now… 

The currencies had another day of rallying VS the dollar yesterday… The Dollar Index fell to 92.30 at the end of the day from 92.73 at the beginning of the day. The euro really moved higher in the 1.18 handle, and all the other currencies followed the Big Dog, chasing the dollar down the street. Even the Japanese yen, which had seen nothing but selling in recent weeks, found a way to move back to the 1.09 handle… I’m going to repeat myself here… As I said yesterday, I do believe that the currency traders are finally looking at all the currency (dollars) that has been printed, and what’s going to BE printed, and decided that buying dollars was foolish…  

Gold & Silver were some really bright spots in the markets yesterday, with Gold rising $15.10 on the day to close at $1,744.60, and Silver rose by 31-cents to close the day at $25.25…  So, what’s changed with these two from all the bloodletting they were absorbing the past month? Well, I’ve always contended that you can’t teach stupid…   But stupid can finally see the light…  And to my way of thinking, this is what has changed… stupid saw the light…  

On a sidebar… My grandkids would be all over me like a cheap suit, if they read the Pfennig, and I said the “s” word so many times!   I always point out to them that if it was good enough for Charlie Brown, then I can say it!

In the overnight markets.. There has been more selling of the dollar, but not as much as the last two U.S. sessions. The Dollar Index has slipped further down to 92.22 this morning, and the euro is within spittin’ distance of the 1.19 handle… Gold & Silver are seeing some profit taking this morning as Gold is down $8 and Silver is down 26-cents…  Those are small amounts and can be reversed easily… so maybe use the cheaper price to buy some additional metals? 

OK… Well… the goose that laid the golden egg, is dying… That is the U.S. as we know it… Changes are coming folks, and they are not changes that we will embrace…  All of our deficit spending is killing the goose, slowly but surely… Sort of like Chinese torture… Speaking of the Chinese… tomorrow in Dennis Miller’s milleronthemoney.com letter, I will discuss the Chinese and their new digital yuan/ renminbi… This is a game changer folks…  And once his letter hits the streets, I’ll share a snippet with you from it, but you should be signed up for his letter now!

I have to go out on limb here, and hope people understand that I’m merely trying to alert them to things that could be happening to them… And the need to make sure you have a store of wealth to keep you and your family strong in the future…   OK… Last week I mentioned how ticked I was about this so-called Covid-passport…  Some states have already said they will not be a part of this, like Florida and Michigan… There may be others but those are the two that I’m aware of right now…  What I’m reading now is that the Gov’t is not going to be the monitor of the passports… But the government will set the rules that people will have to abide by…  The talk now is that private corporations will be the monitors of the passport…   Here’s James Rickards on the passport: “This would be a document of some sort, likely in digital form as a QR code on your mobile phone. If you have the COVID vaccination, you’ll get a QR code to put on your phone. With that, you’ll be able to board airplanes, attend concerts and sports events, go to classes and basically live life as ‘normal’…

“Without the QR code, your ‘papers’ will not be in order and you will be denied transportation, entertainment and educational options. It’s basically a way to force people to be vaccinated if they want to live a normal life.”- James Rickards, in the 5 Minute Forecast, 4/6/21

You know me… I’m against anything that limits my civil liberties and freedoms of movement…  Everyone should contact their representative and tell them how they feel about this, if in fact, you are in agreement with me that this is going to be the end of our civil liberties and freedoms of movement…

While I’m out on a limb, I might as well throw this up against the wall…  I’ve had a few dear readers ask me this question. “What do you think of MLB pulling the All-Star game out of Atlanta Georgia?” Ok, for those of you living under a rock, Major League Baseball pulled the All-Star game out of Atlanta Georgia, because they didn’t agree with Georgia’s new voting law that will require photo ID…  Wait! What?  That’s crazy! The pulling out of the All-Star game that is… not the voter law…  To me… This is a case of MLB succumbing to the woke cancel culture…  There I said it…

Ok, back to regular programming here…  I told you yesterday about how inflation is all around us, and it is… You know, it’s not just price increases of the same items you’ve been buying for some time now, it’s also the changing of the size of the item that you are purchasing… You may be paying the same price, but in the end you have to buy more to make up for the size difference…  I’ve talked about this for years, so this is nothing new to long time readers.. Probably just had to jog their memories, that’s all… Well, I have an article for you to day in the FWIS section that talks about this downsizing to deflect the price adjustments, so make sure you stay turned for that!

The U.S Data Cupboard yesterday had the IMF’s World Economic Outlook, and they are looking through rose colored glasses, folks… The IMF believes that the Global GDP will rise 6% in 2022… Now here are some interesting numbers… The IMF also believes that the driver of the Global economy will not be the U.S. but China and India, with GDP’s of  8.4% and 12.5% respectively… 

If , and that’s a BIG IF, India is going to grow 12.5% in 2022, currency investors should be backing up the truck to buy rupees…   I’m just saying…  (of course it will be too late to buy rupees by the time the 2022 GDP prints )

Speaking of GDP growth… Dig This! The IMF says that Australia will outperform the major economies of the world in 2021, with a 4.5% GDP…   But before we break out the champagne and orange juice, the IMF said that they believe the GDP for Australia will fall back in 2022 to 2.8%…  Hmmm…. That’s quite a drop from 2021, isn’t it? And makes me think that the IMF will revise that figure in the coming months… Just like that did with the 2021 forecast, that that originally said would be 3.5%, and now have revised it upward to 4.5%…  Either way, it does help to explain the strength in the A$ so far in 2021…

Today’s Data Cupboard has the Feb Trade Deficit… look for this to rise to $70 Billion from $68 Billion in Jan.   We’ll also see the color of Consumer Credit, read debt…  And finally the Cartels’ FOMC Meeting Minutes from the last meeting…. There’s nothing to see here, so move along… These are not the droids we’re looking for!

To recap… The currencies had another day of rallying VS the dollar on Monday… The Dollar Index fell from 92.73 in the morning to 92.30 at the end of the day… Gold & Silver had a good day, with Gold gaining $15 and Silver gaining 31-cents on the day.  Chuck sure is getting feisty in his old age…  A wise man once told him that as you grow old you can say whatever you want, because no one listens to you, and so he’s testing that theory this morning…  The IMF says India’s GDP will grow 12.5% in 2022… beep, beep beep, that’s the sound of the truck backing up to load up with rupees, ahead of the Indian economy’s rise…  Chuck thinks that this call for 12.5% GDP is a longshot… But, IF it does happen… You saw it here first!

For What It’s Worth… Once again today, like yesterday, good friend, Dennis Miller sent me this article and while reading it I knew it was FWIW material! It’s about the inflation that businesses can’t hide, and it can be found here: The Inflation They Can’t Hide – The Burning Platform

Or, here’s your snippet: “You can’t reduce the size of a 4×8 sheet of plywood to hide the rising cost of one – or shave some length off a 2x4x8 – without it being not only obvious but an issue, functionally. Try siding a house with 4×7.4 sheets of plywood, for instance.

So, instead, the price goes up. Which is really a measure of the value of your money going down.

The same has been happening for some time at supermarkets, less noticeably. Or at least in a way that makes many people not notice it because that pack of bacon they just bought still costs about the same as it cost a year ago.

Only now it’s 12 ounces instead of 16.

Fewer rolls of paper towels – but the price seem unchanged. Such illusions of economic stability are to be found in practically every aisle and on every shelf of the grocery store – the happy spell only broken when you check out your handful of stuff and discover it cost you $100 – or more – for what used to cost you $60 or less.

But the destruction of the value of money – manifested by its ominously decreasing purchasing power – is becoming impossible to not notice when it comes to products that can’t be skimmed, put less of into the same size packages.

A very objective measure of how fast things are slipping – by observing how fast things are rising – is what you could call The 4×8 Plywood Index. About two years ago – in the fall of 2018 – the average national cost of a sheet of 4×8 construction-grade plywood was just $10 or so.

Fast-forward two years and that same sheet of plywood now costs $25 or more (depending on the finish). Some cost $40 per sheet.”

Chuck Again… As I said, inflation is all around us and closing in fast… And the one thing that will destroy a currency’s value?  Inflation…  simply said…

Market Prices 4/7/2021: American Style: A$ .7634,  kiwi .7038,  C$ .7941, euro 1.1893, sterling 1.3821, Swiss $1.0768, European Style: rand 14.5220, krone 8.4568, SEK 8.6057,  forint 302.28,  zloty 3.8463,   koruna 22.7830, RUB 76.75, yen 109.80, sing 1.3388, HKD 7.7860, INR 74.27, China 6.5464, peso 20.16, BRL 5.6356,  Dollar Index 92.22,  Oil $59.78,  10-year 1.66%, Silver $24.99, Platinum $1,230.00, Palladium $2,635.00,  Copper 4.06, and Gold $1,735.20

That’s it for today… I perused through my library of books yesterday, and found an oldie but goodie, that I read many years ago, so many I’ve forgotten when, and thought… I’m going to read it again… The book? Catch -22, by Joseph Heller… the first 100 pages were kind of remembered but not really, so this is going to be good! Well a day game today in Miami for my Cardinals, and then they come home for the home opener tomorrow, which is supposed to be kind of a rainy day… Boo!  As I said last week, a St. Louis baseball home opener is something that everyone should experience, they pull out all of the stops… And when those beautiful Clydesdales come prancing in, goose bumps appear… I’m just saying… Jefferson Starship with Marty Balin, take us to the finish line today with their song: Count On Me…  “Precious love, I’ll give it to you, Blue as the sky and deep In the eyes of a love so true”   I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

April 6, 2021

* Gold & Silver rally in the overnight markets… 

* Mortgage bonds are in peril… 

Good day… And a Tom Terrific Tuesday to you! My beloved Cardinals got back on track last night with pitching and defense… Now, they need to do it again tonight! I got a visit from good friend, Mike Kettler last night, who watched a couple of innings of the game with me… I was outside to watch the game, but had to fold up tent, and go inside for the last 2 innings… The Final game of the NCAA Tournament did not go the way I expected it to go… But Congrats to Baylor!  And what the heck has happened to our Blues? They’ve now lost 7 games in a row! And are out of the playoffs at this time! UGH! My fave AC/DC song greets me this morning as my iPod plays their song: You Shook Me All Night Long… 

Well, as traders got back to work, not all, but some, they saw the writing on the wall regarding more deficit spending and more dollars being printed, and decided that enough dollar strength was enough! That is for one day… You see, the Plunge Protection Team (PPT) is still hanging over currency traders like the Sword of Damocles… So, for a day, it was about selling the dollar… The euro climbed back above 1.18, and the Dollar Index lost 36 BPS to end the day at 92.60… That’s a significant move in the Dollar Index for one day’s trading. 

I wasn’t told that the recognition of all the new deficit spending was the reason the currency traders all decided to sell dollars yesterday…  In all my years experience of not only trading currencies, but writing this letter and observing the markets, I’m pretty darn sure that was the motive for selling dollars yesterday…  That’s my story, and I’m sticking to it!

Gold & Silver tried like the devil to get back to even after starting the day down… And they both almost made it, but fell a few shekels short… Gold ended the day down $1.80  to close at $1,729.50, and Silver was down 7-cents to close at $24.94… In the after markets trading Gold was up $6.30, and Silver was up 12-cents, and back above $25….

In the overnight markets… Well, Gold & Silver did hold their aftermarket gains overnight, and have added a bit to them in the early trading, with Gold up $8.30, and Silver remaining at up 12-cents…  The Dollar Index was fought back and is 92.73 this morning, which means the dollar saw some buying overnight, not much, but some…  I read this morning that Treasury Secretary Janet Yellen has proposed a minimum tax rate for Corporations, globally…  Really? Ok, you’re going to be the tax monitor for a country in Africa, or the one of the stans in Asia? Come on, get serious here…  I do believe that Corporations should play more than their fair share to keep their buildings and personnel safe (Police and Fire) but to play tax monitor is something that’s impossible to do, in my humble opinion! 

I don’t know if you noticed the price of Copper yesterday, but it had fallen below the $4 figure for the first time in 2 months… But overnight the price of Copper skipped higher to $4.04… As I’ve told you previously, the price of Copper is a good indicator of coming inflation… I don’t know if you pay attention when you go to the grocery store, but inflation is all around us folks… All around, and please do not listen or pay attention to the CPI data behind the curtain!  And you won’t see it in the yields of Treasuries, because the Fed is performing their yield curve control… UGH! So, for now, watch the price of Copper… 

I was really put off by a comment to me yesterday… The reader told me to stop quoting Bill Bonner, as he reduces the integrity of my letter….  Really? Bill Bonner is one of the most respected analysts around, and has been for a couple of decades! And he’s my friend… So, no… whenever I get an opportunity to quote Bill Bonner, I will do so…  Now, we’ve put that to bed!

I had a dear reader ask me for the name of a book that would explain the relationship of Gold & Bond Yields… I responded that I wasn’t aware of such book, but would give my own take on that, and then told him: But what is a bond yield at all? The bond yield is a return on investment, expressed as a percentage, for a bond. In other words, they are interest rates offered by bonds. The bond yields are inversely related to the bond prices. The lower the price, the higher the yield, and vice versa. Because both gold and Treasuries are considered to be safe-haven assets, there is a positive correlation between gold and bond prices, and negative correlation between gold prices and bond yields. This is because there are opportunity costs of holding gold, which does not bear any yield, so capital flows from gold to bonds, when yields become sufficiently high, and it flows in a reverse direction, when bond yields become too low.

OK… onto other things…  Long time Reader Bob, sent me a note yesterday regarding the Russian ruble, and I thought I would share a piece of that with you… “Hopes that Russia’s ruble will rise at the beginning of the year have been dashed. Despite relatively good fundamentals – from the Russian economy’s recovery rate to oil prices – the national currency remained volatile. The situation will be uncertain in the second quarter of the year, too, said experts interviewed by Izvestia.”

“The risk of sanctions is the main thing that prevents the Russian currency from strengthening,” Finam analyst Andrei Maslov noted. “Many analysts believe that the ruble is underrated because with oil prices above $60 per barrel, the Russian currency is still weak against the dollar and the euro, which is the result of a serious lack of investor trust based precisely on geopolitical risks,” the expert explained. According to him, the ruble will strengthen over the course of the year, provided that oil prices remain above the $60 level and no tough sanctions are introduced.” From TASS…”

I read an email from the good folks at GATA who quoted Dave Kranzler, of whom I’ve quoted a few times through the years. Mr. Kranzler was talking about the recent sell off of Gold & Silver, and that he thought it was probably due to the price manipulators attempting to get the long holders of the metals to sell their April Contracts or roll them out to July…. Now, I hear you asking, why would that be their goal?  Ahhh Grasshopper… You see, if the April Contracts all stand for delivery of the metals, the COMEX could have a problem making delivery…  Now do you see why the price manipulators were working to achieve this goal?

Yesterday, I loaded up for bear, and really came out firing after a brief holiday… Today, I’m just going to talk a bit about something that I’ve gone through a few times in the last year.. .And that is the danger of armegeddon with housing… The lack of payments on the bonds, and the end holders holding worthless paper…   Well, I have this whole scenario in the FWIS section today, so don’t change that dial!

The U.S. Data Cupboard yesterday had Factory Orders for Feb… In January Factory Orders rallied 2.7%, but February saw it go negative -.8%…  Not a good indicator for the economy….  Today’s Data Cupboard has Job Openings for Feb… really old news… And the IMF will print their World Economic Review…  talk about some boring reading!

To Recap…  The currencies rallied on Monday, and Chuck thinks it had to do with traders seeing the amount of deficit spending coming down the pike… Gold & Silver started the day down but rallied and fought back to close down by a small margin… The Dollar Index yesterday went from 92.96 to 92.60…  A significant swing in Chuck’s mind… And Dave Kranzler tells us that the recent bloodletting in Gold & Sliver was due to the price manipulators trying to get long metals holders to sell their April Contract, or roll it to July… And Chuck explains why!

For What It’s Worth…  The Day of Reckoning is coming for banks and lending companies and the mortgage bonds… You don’t stop receiving payments on debt for over a year, and not have ramifications… I’ve talked about how this could all end up in tears previously, but this time I’m goig to let Bloomberg tell you about what’s coming… And that article can be found here: Mortgage Firms Warned to Prepare for a ‘Tidal Wave’ of Distress – Bloomberg

Or, here’s your snippet: “Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said Thursday.

The Consumer Financial Protection Bureau warning is tied to forbearance relief that’s allowed million of borrowers to delay their mortgage payments due to the pandemic. To avoid what the bureau called “avoidable foreclosures” when the relief lapses, mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.

“There is a tidal wave of distressed homeowners who will need help,” Dave Uejio, the CFPB’s acting director, said in a statement. “Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.”

In a separate compliance bulletin released Thursday, the CFPB said that companies “that are unable to adequately manage loss mitigation can expect the bureau to take enforcement or supervisory action.”

More than 2 million borrowers as of January had either postponed their payments or failed to make them for at least three months, the bureau said. Once government-authorized forbearance plans begin to end in September, hundreds of thousands of people may need assistance getting back on track.”

Chuck Again.. Unintended Consequences… They always come back to bit you in the ask me no more questions, I’ll tell you no more lies…. I’m just saying…

Market Prices 4/6/2021: American Style: A$ .7626,  kiwi .7020,  C$ .7957, euro 1.1808, sterling 1.3828, Swiss $1.0666, European Style: rand 14.5086, krone 8.5298, SEK 8.6857,  forint 304.97,  zloty 3.8850,   koruna 22.0602, RUB 76.34, yen 110.31, sing 1.3409, HKD 7.7767, INR 73.38, China 6.5669, peso 20.29, BRL 5.6851,  Dollar Index 92.73,  Oil $59.93,   10-year 1.69%, Silver $25.06, Platinum $1,214.00, Palladium $2,744.00, Copper $4.04, and Gold $1,737.80, 

That’s it for today… Man… I had to put a new battery in my car upon returning home, and it’s not like it used to be…where you loosened a couple of bolts and  took the old battery out, and then put the new one in, and tightened the bolts… I had to do all kinds of releases and then I dropped a bolt and when I went to reach it, I sliced open my arm on some metal… OUCH!  I hope no one was around because I let off a set of swear words that would make a Sailor blush! I didn’t need stitches, but it was close… UGH! Well… I’m now down 65 lbs from last Rocktober, and my blood sugar numbers are in line, finally! I would like to lose another 50lbs… But getting here has been very difficult to do for me… But, I’ve got to try! My weight through the years has been up and down, with more ups than downs… So, to get where I need to be, and stabilize that, would be a giant step in the right direction for my health! My visitor last night reminded me that I said that if the weather was good that I would have a driveway happy hour this Friday… And it looks like the weather will be good, so if you’re reading this and want to join us, with safe distancing, come on by!  The Babys  take us to the finish line today with their song: Midnight Rendezvous…  “driving faster than you want me to, Can’t help myself when I’m alone with you, Alright!”  I hope you have a Tom Terrific Tuesday, and will Be Good To Yourself!

Chuck Butler

 

 

April 5, 2021

* Currencies begin the week flat… 

* Gold & Silver start the week down a bit… 

Good Day… And a Marvelous Monday to you… Easter Monday at that! Yes, a lot of the world takes this day as a holiday, but not me… Unfortunately! I could have easily gone back to sleep this morning, but being the writing soldier that I am, I conquered the sleepy feeling!  Aren’t you proud of me? HA! Sad news last week, when I read that one of my all-time favorite Cardinals players, Kenny Reitz, aka The Zamboni, had died… I have one of his baseball cards hung on my pictures wall that faces me as I write the Pfennig.. Not the greatest hitter, but boy could he play 3^rd base! He set the record for least errors by a 3^rd baseman 2 times… with 9 one year and 8 on the other…  I guess as I go along in years, I’ll have to deal with many of my younger life faves… UGH!  The Grass Roots greet me this morning with their song: Let’s Live For Today…  Now that’s some good advice, eh?

Well, last Friday was Good Friday, and for the most part, markets were closed… Except the currency markets! Gold & Silver weren’t traded, so the charge on the dollar was left to the currencies. And well, they didn’t charge too hard, because the Dollar Index gained 9 BPS to finish the week at 93.02…  The euro fared better than most currencies on the day, gaining about 10 BPS Vs the dollar, which is, in reality, a pretty muted move… 

In the overnight markets last night… There’s really not been much movement in the currencies, as the Dollar Index has fallen about 6 BPS, which really indicates that everything here is flat…  Gold & Silver are back to trading this morning, and maybe they should have stayed on the sidelines, because Gold is down $7.80 this morning and Silver is down 10-cents…  Those losses could very well be turned around easily today, so I’ll be watching for that!  

So, since there was little in the markets to talk about from Friday and last night, I’m going to got out on a limb and talk about some things going on that really get my goat… And throw it up against the wall to see if it sticks…  ready? OK, let’s go!

Last week I told you that the dollar’s ratio of currency held as foreigner reserves had fallen to a low that hadn’t been seen since 2010, which was before the hidden debts of Club Med countries of Europe was exposed, and the dollar’s long time weak trend turned on a dime…  That’s a Big Development folks… I can’t begin to express how BIG this is…  But let me just give you this bit of information to see if it gets your mind thinking about how big this news is…   The share of Chinese renminbi in foreign reserves hit an all-time high!  

The dedollarization that was started by Russia, and then joined by China appears to be catching on around the world… China and Russia have stared a clearing facility like SWIFT, that they say anyone in the world can use, and won’t be used to punish countries, like SWIFT does… (of course the U.S. runs SWIFT, so you get what the new facility is saying)…  This means that countries that join the new facility will be able to trade with another country using the facility in their home currencies, and not have to buy dollars in the terms of the transaction…   

Add to this the fact that China’s digital currency is ready for prime time, and I can’t even begin to express how important this is in the future for the dollar…  I do explain it in an interview that will be running in Dennis Miller’s Milleronthemoney.com soon… So, if you aren’t already a subscriber to his free letter, and you want to know what I said… well, go to the site and sign up!  You’ll be glad you did!

Ok, switching gears here…  Ok. Last week President Biden presented his latest deficit spending bill… It was a $2.3 Billion so-called infrastructure bill…   So, here’s the skinny on how that $2.3 Billion will be spent… courtesy of Bill Bonner’s www.rogueeconomics.com… get out your calculators to check my math if you want….  “Most of the $2.3 trillion will buy votes rather than infrastructure, including $400 billion for “elder and disability care,” $213 billion for “green and affordable homes,” $174 billion for electric vehicles, $137 billion for “school and childcare infrastructure,” $100 billion for “job training” and so forth.

It’s a smorgasbord for Democratic Party urban constituencies that leaves $180 billion for “R&D in tech of the future” and $300 billion in manufacturing subsidies as an afterthought.” – Bill Bonner… 

As Bill points out…”You may wonder why $2.3 trillion would be needed. After all, roads are supported by gasoline and road taxes… And except for the Interstate highway system, they’re a local matter.

Bridges, too, are paid for by users – either via tolls or taxes.

Ports? Same story, paid for by the shippers who use them. And airports, by ticket sales.

Railroads? Except for the money-losing Amtrak, they are privately owned. If they need more track or rolling stock, they can apply their profits or raise more money honestly.

If a new airport is needed, it is easily funded by the people who use the airport. And if it can’t be paid for in such a reasonable and obvious way, why is it being built?

If the Port of Long Beach, for example, needs more capacity, wouldn’t it make sense to charge the ships that come into port with their containers… and the railroads and trucks that haul it away?

Of course, it would. They know what is needed and how much it is worth. The feds do not. ” – Bill Bonner

The big take away here is that another $2.3 Billion of money that the Gov’t doesn’t have will be spent, which means that $2.3 Billion new dollars will be printed…  And one wonders why the share of dollars as reserve currency has dropped to a decade low?  Hmmm… 

OK… here’s another thing that’s been on mind… And that is… that we as a country have passed the $28 Trillion in Debt mark like a car passing a picket fence… Now, that didn’t take too long now did it?  Well, actually it was just 13 months since we passed $27 Trillion…   And during that time we’ve added $4.2 Trillion of money supply…  And again one wonders why the dollar’s share of reserves has fallen to a decade low?  Well, I don’t wonder, because I know! 

Friend, Dennis Miller, sent me an article that talks about the debt increase, and I have it for you as our FWIW article today, so stay tuned, don’t touch that dial! 

Well, if we’re looking for any direction from the U.S. Data Cupboard this week, we’ll be disappointed… There’s really not much to speak of in the cupboard scheduled for this week. We will see the Fed’s FOMC Meeting Minutes on Wednesday from their last meeting…  Those are always good for some rogue comment… So, we’ll have to wait-n-see that on Wednesday… 

To recap… The markets for the most part have been closed since Thursday evening, as the Good Friday and Easter Monday holidays that surround the holy day of Easter, have seen little to no trading…  So, Chuck goes out on a limb and talks about some things on his mind… Not all things on his mind, for he doesn’t have the time or space to empty his brain!  HA!   Gold & Silver are down a bit this morning, and the currencies are flat to start the week… 

For What It’s Worth…  Ok, I gave a teaser above about this article and so to finish that, this is an article that really gets into the debt rise above $28 Trillion, and it can be found here: US National Debt Passes $28 Trillion, +$4.7 Trillion in 13 Months. General Treasury Account Down by $480 Billion in 2 Months, $620 Billion to Go | Wolf Street

Or, here’s your snippet: “It finally happened, that glorious moment, when, after teetering on the verge for weeks – for reasons we’ll get into shortly – the incredibly spiking US gross national debt, after kissing the line a couple of times for a moment, finally, and suddenly by a big leap, jumped over the $28-trillion mark, with a $143-billion leap in one day on Wednesday, March 31, following some big Treasury sales. It gave some of that up on Thursday as some bonds matured. And it now amounts to $28.08 trillion, as per US Treasury Department on Friday.

The US gross national debt has now spiked by $4.7 trillion in 13 months since the end of February 2020, in the days before this show started.

During the final months of the Mnuchin Treasury, it was decided to start spending down the balance in the checking account by borrowing a little less, and by early January, the GTA had dropped to $1.6 trillion.

Early on in the Yellen Treasury, the drawdown was formalized. In early February, a schedule was announced: the balance would be brought down by $1.1 trillion to $500 billion by June. And they’re now well into it.

The drawdown has the effect that the government spends money it doesn’t have to borrow at the moment because it already borrowed it last spring when the Fed was still monetizing essentially all of the borrowing. This has some implications for the markets.

The government’s TGA is at the Federal Reserve Bank of New York and is reported weekly on the Fed’s balance sheet as a liability (banks report deposit accounts as liabilities) because this is money the Fed owes the government.”

Chuck again.. Basically what’s happening here folks is that the Gov’t now spends the proceeds from debt sales last spring that the Fed had monetized back then?   I really don’t know how the markets will take this development, but, in my mind I believe that the markets should punish the dollar for these monetary crimes… 

Market prices 4/5/2021: American Style: A$ .7629,  kiwi .7046,  C$ .7969, euro 1.1759, sterling 1.3866, Swiss $1.0610, European style: rand 14.6130, krone 8.5421, SEK 8.7510,  forint 306.61,   zloty 3.9004,   koruna 22.1271, RUB 76.39, yen 110.51, sing 1.3440, HKD 7.7758, INR 73.32, China 6.5660, peso 20.26,  BRL 5.7060,  Dollar Index 92.96,  Oil $59.71,   10-year 1.73%, Silver $24.92, Platinum $1,197.00, Palladium $2,696.00, Copper $3.97, and Gold… $1,723.50

That’s it for today… Well, a fantastico day, weather wise yesterday, led to a huge backyard Easter celebration with family yesterday…  My little Evie, was so darned cute and is getting around free and easy these days! It was great seeing some family members that I hadn’t seen in 3 months…  The grandkids hunted eggs, and the food was great! A grand time was had by all! Well, my beloved Cardinals started the season on the right foot, and then stumbled the next two games, and now head to Miami after losing 2 of 3 to the Reds… Deep Purple takes us to the finish line today with their rock classic song: Smoke On The Water…   I hope you have a Marvelous Monday, and will be Good To Yourself!

Chuck Butler

 

April 1, 2021

* Currencies drift again on Wednesday and overnight

* Chuck asks, Has the bottom for Gold been put in? 

Good day… And a Tub Thumpin’ Thursday to you! Another beautiful, very warm, day here… The weather people tell me that today will be a day of rain… We haven’t had a drop of rain here since the first weekend of the month… So, even though it’s my last day here for a while, I’ll be OK, with rain… For all that came to visit us this month, you’ve had some of the best weather ever!  As the days get warmer and warmer, I find that I can’t sit out in the sun as long…  After about an hour and a half yesterday, I called it a day!  We’ve made some good friends down here this year… And one of them (Karen) was trying to talk me into staying!  I would, but… family and Easter…  3 years ago, I spent most of the summer down here by myself, as the construction was being done on our new unit… Don McClean greets me this morning with his song: Vincent… Starry, starry night… paint your palette blue and gray…   that song always makes me tear up… and I don’t know why!

The assault on the currencies & metals seems to have ended, for now… The currencies drifted along yesterday, and had no real direction. The Dollar Index which was trading at 93.17 in the morning, ended the day at 93.19… So, as you can see… little change in the currencies…  Gold & Silver finally saw a bid after a week of seeing only offers… Gold ended the day up $22.80 to close the day at $1,709.50, and Silver also gained on the day 41-cents to close the day at $24.41…  Finally!  Was the bottom for these two metals put in on Tuesday?  I sure hope so!

In the overnight markets… There’s been little to no movement in the currencies. The Dollar Index is trading at 93.15, this morning, so compared to last night’s 93.19, you can see that there’s been little movement. Gold, however, is starting the day up about $6 as I write… Silver is down 9-cents, but that can be turned around quickly, and I do believe it will be today…  So, if Gold can hold its gains today and even add to them, that would signify that the bottom was put in on Tuesday… 

Well, the good folks at GATA sent me two emails yesterday, and both are going to featured here in the Pfennig today… The first one goes like this: “U.S. Rep. Alex Mooney, R-West Virginia, today re-introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.

The Monetary Metals Tax Neutrality Act (H.R. 2284), backed by the Sound Money Defense League and free-market activists, would clarify that the sale and exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.”

And the second one goes like this: “The dollar’s share of global currency reserves dropped in the fourth quarter to around 59%, the lowest in 25 years, according to International Monetary Fund data.

The slide came in a quarter when a gauge of the greenback fell the most since 2010, and amid questions about how long the dollar can maintain its status as the pre-eminent reserve currency.”

Chuck again… Ok, first off, I would like to tell you to contact your representative and tell him you’re behind the H.R. 2284….  This guy, Alex Mooney, has been fighting for this for some time, he implemented it in his state of West Virginia, but now would like to see go nationally… And so would I! Talk about a boon to Gold & Silver!  People love tax free stuff!

And second of all… I’ve been telling you for ages now that the dollar’s ratio of reserve currency held by foreigners was going down… And now we learn it’s the lowest its been since 2010?   If Foreign Central Banks can see the dollar’s future with all the supply in dollars floating around, then why can’t currency traders?  You don’t think that… Nah, don’t go there Chuck!, Oh, you might as well, you already started to tell them your thoughts…  You don’t think that currency traders have gotten the memo from the Gov’t that they are not to short the dollar, do you?   I do!

And before I go on… I have a bone to pick with the Gov’t for even thinking about implementing a vaccine passport… That is a gross violation of our rights!  And why would tax paying citizens be required to have a vaccine passport, when the President is allowing thousands of illegal immigrants into the country without a vaccine?  I’m an so up in arms about this thought, that It makes me want to scream!

Ok… I had better get back to the regular programming before I really tick everyone off!  Hmmm..  let’s see… Well,, the other day I mentioned that the Cartel had announced they would be implementing yield curve control (YCC) s  YCC is another way of interest-rate setting that involves buying as much U.S. Treasuries and government-backed debt as necessary to keep yields below a certain level… 

Now you may be saying, isn’t that a form of interest rate manipulation?  Well, you would be exactly correct! What had happened in recent months is the bond boys saw inflation rising, and the Cartel’s desire to let inflation run hot, and they began to sell bonds to lower the price of the bond, and raise the yield…  Thus higher interest rates/ yields would combat inflation… But the Cartel saw this and decided that they would teach the bond boys a lesson… They’ll buy truck loads of bonds, and thus cause the price of the bonds to rise, and the yield to drop…

That’s all fine and good… Let the Cartel do what they want to do, because not even Congress can stop them now… But the thing to think about here is that they don’t give these bonds away for free! You have to pay for them, and since the Cartel has no money to spend on them, guess what happens? Ahhh grasshopper, you’ve learned well… Yes, they will print the currency needed to pay for the bonds… And even more dollars hit the economy… When will it be too much, and the dollar gets punished?  I guess we’ll have to wait-n-see, eh?

The U.S. Data Cupboard yesterday, had the ADP Employment Report for March, and it was quite impressive, with 517,000 new hires taken on in March…  If the ADP is 517,000 you can only guess what number will be pulled out of hat by the BLS for their Jobs Jamboree on Friday/ tomorrow…

Today’s Cupboard has the weekly Initial Jobless Claims to print from last week… Recall that last week’s print for the previous week, saw the Claims drop below 700,000 for the first time since the Pandemic came to our shores a year ago…  Even with this drop, the number was still higher than the highest number during the Great Recession of 13 years ago… 

We’ll also see the ISM Manufacturing Index for March and Construction Spending for March… No real market moving prints, although the ISM used to be a market moving print…

To recap… The currencies drifted all day yesterday, with no real directional movement, and in the overnight markets there was more drifting in the currencies. Gold & Silver finally saw a bid yesterday, and ran with it, with Gold closing up $22.80, and Silver closing up 41-cents… In the early trading today both are       . Chuck is upset with the vaccine passport idea… And goes the whole nine yards in describing yield curve control…

For What It’s Worth…. The FWIW articles well was pretty dry this morning, that is as far as thing s I want to talk about and not get people ticked off at me! And then I went back in my email box and found an article from the good folks at Wallstreetonparade.com. This is an article about how those dastardly derivatives have caused some major damage, and it can be found here: Shades of 2008: Derivative Bets Blow Up Archegos Hedge Fund; Inflict Billions in Losses on Global Banks (wallstreetonparade.com)

Or, here’s your snippet: “The Archegos Capital Management hedge fund implosion has, thus far, delivered billions of dollars in losses to the shareholders of global banks Credit Suisse and Nomura, whose market values have plummeted; done serious reputational damage to Goldman Sachs and Morgan Stanley, both of whom are allowed to own federally-insured banks even after they came close to blowing themselves up in 2008 and surely would have without gargantuan secret bailouts from the Federal Reserve; cut the market value of ViacomCBS in half; dropped the market value of Discovery by 40 percent; shaved billions of dollars off the market value of major Wall Street banks yesterday as rumors ran wild about who is hiding losses; and raised critical questions, once again, about the competency of the Federal Reserve to supervise these federally-insured trading casinos.

The Archegos meltdown has done one more thing. It has reminded the readers of Wall Street On Parade that our decade of hand-wringing over the dangerous brew of allowing federally-insured, deposit-taking banks to own tens of trillions of dollars in opaque, over-the-counter derivatives remains the biggest threat to the financial stability of the United States.

What has been pieced together thus far, and not denied by any of the parties involved, is as follows:

After pleading guilty to wire fraud involving insider trading in 2012 on behalf of another hedge fund he founded, Sung Kook “Bill” Hwang sometime thereafter quietly founded a “family office,” a hedge fund that is allowed to decide for itself if it needs to register with the Securities and Exchange Commission. There are no filings with the SEC to suggest it knows Archegos exists or how it operates and there are no 13-F filings with the SEC to show the dangerous levels of stock exposure and leverage it had amassed through derivatives contracts with some of the biggest banks on Wall Street. This, of course, raises the question as to just how much of this booming stock market is based on secret derivative contracts between dodgy hedge funds and federally-insured banks.”

Chuck Again… Pam and Russ Martens of WSOP, do an excellent job of laying out the problems and explaining how they collapsed… And once again, there’s no way in my mind that Banks should be dealing in derivatives, other than hedging their mortgage pipeline… 

Market prices 4/1/2021… American Style: A$ .7563,  kiwi .6975, C$ .7947, euro 1.1743, sterling 1.3776, Swiss $1.0575, European Style: rand 14.7275, krone 8.5498, SEK 8.7418, forint 308.47, zloty 3.9350,  koruna 22.1974, RUB 75.62, yen 110.80, sing 1.3460, HKD 7.7769, INR 73.42, China 6.5536, peso 20.40,  BRL 5.7184,  Dollar Index 93.15,  Oil $60.20,   10-year 1.72%, Silver $24.42, Platinum $1,188.00, Palladium $2,684.0, Copper $4.01, and Gold $1,715.70

That’s it for today… Happy April Fools Day!  And welcome to April… I forgot to say that at the beginning today, so here it is now!  I hope you steer clear of having any April Fool’s jokes pulled on you today! Tomorrow is a long day of travel for yours truly, with a 3 hour layover in Nashville a part of the day! UGH! And on Sunday, it will be Easter… A very holy day for much of the world…  And the end of lent, so meat can be eaten again on Fridays!  When I was a young man, we couldn’t eat meat on ANY Friday… Lots of fish sticks and mac & cheese, were the fares at the Butler House…  So, I hope you have some great family plans this weekend… I know I do… it will be good to see my little Evie again, and her big brother Braden… It’s going to take some time for Evie to warm up to me again, I’m sure… I used to be able to make her smile very easily… But 3 months away, and she’ll probably look at me like deer into the headlights! I can’t wait to see Delaney Grace in her Easter Bonnet!  Oh My Goodness… What am I thinking about! Today is OPENING DAY for baseball! It should be a national holiday, but since it isn’t, folks in the home ball parks will have to call in sick today!  Go Cardinals!  Our city’s home opener isn’t for another week… The Clydesdales, the Hall of Famers, the pomp and majesty of a St. Louis Cardinals Home Opener will give you goose bumps! The Marshal Tucker Band takes us to the finish line today with their song: Can’t You See?   I hope you have a very blessed Easter on Sunday, and before that a Tub Thumpin’ Thursday, and a Fantastico Good Friday, and will try to Be Good To Yourself!

Chuck Butler

 

 

March 31, 2021

* The selling of currencies & metals has ceased for a day… 

* Rogoff says dollar’s dominance is fragile… 

Good day… And a Wonderful Wednesday to you!  As my time down here in the South of Florida dwindles to just a couple of days left, I think about just staying here… That is until I know for sure that the weather has turned warmer for good back home… Yes, it’s been nice there recently, but.. it’s April, and April is a crapshoot as far as weather is concerned… But I’ll go home and spend Easter with my family, and then decide whether to return or not… Like my good friend, Duane, said in the stairwell of a French Quarter apartment, “I don’t want to go home”…  Soft Cell greets me this morning with their song: Tainted Love… Now there’s an old classic for you!

So, I hear you saying, “enough whining Chuck about having to go home”…  Maybe in the time it takes me on Friday to travel back to St. Louis, the markets will have figured out how wrong they are about the dollar’s future, and Gold’s future, and so on…  And next Monday, Easter Monday, I’ll have nothing but good news to bring to you non-dollar holders…  And then again, pigs might be seen flying…

Well.. the currencies tried to mount a challenge to the dollar yesterday, but were put down just as quickly as they thought about rallying… The PPT (plunge protection team) has really stepped up their game regarding protecting the dollar lately… . Yesterday’s drop in the currencies wasn’t that bad, as the Dollar Index moved from 93.19 yesterday morning to close at 93.26… That’s the good news…

The bad news is that Gold never recovered from its early morning loss of $23.00 and ended up losing $25.70 on the day to close at $1,687.00… And Silver followed Gold down the slippery slope to show a loss of 63-cents and close at $24.10…  Again, these are very ugly closing numbers for these two precious metals… Why has all this selling in Gold & Silver come about in the past week?  Well, Bitcoin has reached a new all-time high, for one… And the price manipulators are having their way with the metals, which isn’t a good thing…

In the overnight markets… There’s been little to no movement in the currencies & metals overnight… The Dollar Index has given a few shekels back and trades at 93.17 this morning, and Gold & Silver are both flat this morning, moving up only pennies to start the day.  In these crazy days of large price movements it’s nice to see a day of rest for the weary…   Not to say I want to see this kind of price action every day, but once in a while it is a welcome relief… Especially when the dollar protection, and metals suppression has been ruling the roost lately… 

Do you recall the name Kenneth Rogoff?  Well if you don’t I suggest you Google his name and do some background work, for he’s been at the top of economists lists for years!  Well, Ken Rogoff recently did an interview and I think it would behoove us to listen in…  Here’s Ken Rogoff…

“The mighty U.S. dollar continues to reign supreme in global markets. But the greenback’s dominance may well be more fragile than it appears, because expected future changes in China’s exchange-rate regime are likely to trigger a significant shift in the international monetary order.

For many reasons, the Chinese authorities will probably someday stop pegging the renminbi to a basket of currencies, and shift to a modern inflation-targeting regime under which they allow the exchange rate to fluctuate much more freely, especially against the dollar. When that happens, expect most of Asia to follow China. In due time, the dollar, currently the anchor currency for roughly two-thirds of world GDP, could lose nearly half its weight.” – Ken Rogoff from the folks at GATA…

Now that’s what I’ve been thinking for some time now, as the dollar pushes higher every day, that its time atop the currency heap will be short-lived… But right now it’s very difficult to try and stop this runaway bus that is the dollar…  So.. if I were you, I would be looking to buy more currencies and metals on these drops…  My former colleague at Mark Twain Bank World Markets, Ty Keough, used to explain to people that when the dollar rallies, it’s the time to buy currencies, because… you can buy more of them!   I heard him explain this to clients through the years, many, many times, and each time I would take note that he was 100% right!

Our World Markets trade desk was set up so that I could hear each person’s conversations with clients each day… This way I could add to their explanations to clients, or just take notes that there was a different way of saying what they said… I could hear Chris Gaffney, Ty Keough, Aaron Stevenson, Tim Smith, Antione Lawrence and any others all the time… Sometimes they would be on personal calls, and I had to tune them out…  Just thought you would be interested in how we used to deal each day…

I just knew in my heart of hearts that I had given the kiss of death to the Indian rupee on Monday, when I talked about how it was a shinning light in the currencies, having held on to its gains… And On Tuesday I was presented with the award for “dumb comment of the year”… As the rupee last ground to the dollar by the basket full…

So, riddle me this Batman… The dollar gets love when the Cartel buys bonds… But then why does the euro get sold when its Central Bank buys bonds?  Ever since the European Central Bank (ECB) announced that they would be stepping up their bond buying, the euro has been sold like funnel cakes at a State Fair…  You know, it WASN’T that long ago that we were talking about the euro at 1.22… and this morning it trades at 1.1740…

That right there is a good indication of how swiftly the powers that be can make things difficult for non-dollar holdings… The Treasury Sec. once said, “IT’s our currency, but it’s your problem”… And he was talking about how strong the dollar was… That Treasury Sec. was John Connally, and he was speaking at the time about how strong the dollar was, and how that meant that all other currencies had a problem… 

Weak currencies allow inflation to be imported into their economies…  And with inflation gearing up for a run at all-time highs across the globe, this dollar strength could be very devastating in the long run…  In opposites, the strong dollar can fight back inflation … But for how much longer? I seem to be with a group of right minded people who believe the dollar is on ropes doing the rope-a-dope…  Ali would be proud… of how well the dollar does his signature boxing move… 

So… when will the Cartel step in and say enough is enough! We’re trying to get inflation to run hot, and you dumbass PPTer’s are making that difficult for us to achieve!  It’s like two family members butting heads over who gets the last piece of cake… They can’t figure out how to work together to achieve something for both…  

The U.S. Data Cupboard yesterday, had some interesting data…  And just like I said yesterday would happen the Feb Case/Shiller Home Price Index increased to 11.2% from 10.4% in Jan.  And also I said the stupid Consumer Confidence Index would rise, in March, since most people received their stimmy checks this month… And that’s exactly what happened with the Confidence index rising to 109.7 VS 90.4 last month…  That’s quite a jump in confidence don’t you think?  Well, all I have to say about that is that they didn’t ask me, if I was confident…  They’d get a far different outcome if they did!

Today’s Cupboard has the ADP Employment report for March…  And according to the so-called experts, the employment numbers for March will have skyrocketed higher…  Recall that the ADP Employment Report is a precursor to the Jobs Jamboree, which will print on Friday this week.. Good Friday that is…

To recap… The currencies attempted to mount a rally yesterday, but it was snuffed out by the PPTer’s . Gold & Silver lost major ground on the day, with Gold posting a $25.70 loss and Silver a $66=cent loss on the day..  Many are there some excellent buying opportunities out there folks… I’m just pointing them out… 

For What It’s Worth… Ok longtime readers of this letter, know that I have no love for government economic reports, for I believe they all to be worthless, cooked, massaged, and made to show the citizens that everything is peachy…  Well, longtime reader, Bob, sent me a note that an article on zerohedge.com talked about this…  So… that’s the FWIW article today, about how the Gov’t economic reports are worthless, and it can be found here: “Missing Prices”: Half The Entire US CPI Is Based On Estimates | ZeroHedge

Or, here’s your snippet: “Policymakers and analysts involved in the lively debate on the future path of inflation need to consider whether the government statistical agencies have the tools or information to provide an accurate general inflation assessment. According to the Bureau of Labor Statistics (BLS), half of the data comprised in the consumer price index (CPI) was “imputed” in the past year.

Reported inflation can be whatever you want it to be. Still, it needs to be measuring what policymakers believe it is for it to be appropriate as a monetary policy tool. Price mismeasurement is a policy problem and perhaps soon a credibility problem for policymakers, as “missing prices” make inflation-targeting a meaningless policy tool.

Since the pandemic, the standard practice of personal visits, which historically accounted for three-fourths of price quotes, was temporarily discontinued. Instead, price data was obtained entirely from online sources or through telephone interviews.

According to BLS, the change in data gathering practices has significantly lowered consumer price response rates. For example, the scale of uncollected prices for non-shelter goods and services ran between twenty and thirty-five percent in the past year, more than twice the average. Shelter prices for homeowners, which account for one-fourth of the price index, are regularly “imputed” each month. Taken together, that means price “imputations” and not actual transaction prices have accounted for more than half of the CPI index for the past year.”

Chuck again… I’ve long thought that IF the Cartel really wants inflation to run hot, they could devise their own CPI, or just calculate the data correctly without hedonic adjustments… But then, that would require them to do some work, and math, and well, we can forget I even mentioned this! 

Market Price 3/31/2021: American Style: A$ .7620,  kiwi .7002,  C$ .7938, euro 1.1740, sterling 1.3773, Swiss $1.0606, European Style: rand 14.8020, krone 8.5038, SEK 8.7086,  forint 309.47,  zloty 3.9047,  koruna 22.2618, RUB 75.78, yen 110.64, sing 1.3442, HKD 7.7739, INR 73.15, China 6.5698, peso 20.52, BRL 5.7699,  Dollar Index 93.17,  Oil $60.45,   10-year 1.72%, Silver $24.16, Platinum $1,184.00, Palladium $2,688.00, Copper $4.00, and Gold… $1,687.30

That’s it for today… Man did I run into some major technical difficulties yesterday… But all was worked out and I’m good to go this morning! Another absolutely beautiful day here yesterday…  Well, it’s the end of March today, one of my fave months… April showers bring mayflowers, what do mayflowers bring? Pilgrims! I know, I know, I use that joke just about every year at the beginning of April! But I do have new readers each year!  I heard from my oncologist yesterday, she really wants to see me… I told her, “I’m feeling fine, there’s no rush to get back and see you, you know the old saying don’t fix what ain’t broken?” I’m hoping that next Friday will be a good warm day, so that I can have a driveway happy hour and get caught up with all my neighbors and friends!  I have to say that I am so darn proud of my darling granddaughter, Delaney Grace.. She stood right out there on that field, and belted out the National Anthem in one take… That song is not easy to sing folks… I should know as I sing it out loud at each game…  this year, with fans so spread out, there was no one around me except my wife when I would sing the national anthem..   OK… man, I’m really rocking this morning as I head to the Big Finish, with Carlos Santana, and his group’s song: Everybody’s Everything…  You should YouTube that song, it’ll get your motor running!  I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

March 30, 2021 

* Currencies overnight get sold… 

* What is taught in economics these days? 

Good day… And a Tom Terrific Tuesday to you…  My last spring training game ended the same way the first one did.. in a tie…  I saw 5 ties this spring… That’s crazy! It was a beautiful day at the ball park though… I love that little stadium (Roger Dean Stadium)… It’s perfect for me, and I’m already longing for next spring when I can come back to the stadium to watch my beloved Cardinals! We say goodbye to out last condo guest today, and then three days later I will be heading home… My friends will all ask me what I think of our Cardinals’ chances this year… Like I said yesterday, the Cardinals will pitch well, play excellent defense, and the offense will struggle… But you can win with that formula… And that’s what I’m hoping will happen this year!  Eric Burdon and the Animals greet me this morning with their song: The House of the Rising Sun… 

Well, so much for the dastardly day for stocks yesterday…  To circle back to yesterday morning, I had told you that many intelligent people were saying that Monday would be a blood letting for stocks… And well that didn’t happen, as the Dow ended up 98 points… That’s a far cry from a blood letting, eh?  Well, now all those that have been calling for a stock sell off are saying that it is going to be an April event…  OK… So, just like everyone else these days, if you just keep moving the goalposts, the score doesn’t change…  I’m just saying…  I might remind you to make sure your stop losses have been updated and are live…

The currencies didn’t do much on Monday… The Dollar Index, which on Monday morning was 92.85, ended the day at 92.91… So in essence there was some additional dollar buying but not much, and certainly not enough to write home about!  Gold on the other hand saw another day of getting chopped and diced by the price manipulators…  Gold lost $21.60 on the day, to close at $1,712.70, and Silver lost 40-cents to close the day at $24.73… Those are some very ugly closing figures for these two, and I for one have grown numb to the price manipulators dealings… Yes, we all know why the price manipulators exist, and who’s behind them all the way… But do they have to go after these two metals as if they are the root cause of their problems?

In the overnight markets… Well, in no other words… All hell has broken loose! Gold is down $23 and no longer owns a $1,700 handle… And Silver is down another 38-cents… The Dollar Index has risen to 93.19, and it’s all about dollar strength… What gives?  Basic economics tells us that the more of something reduces its price… And the Good Lord knows just how much more we have in the form of dollars flooding the economy!  I shake my head and wonder what the hell they teach the young ones in economics these days… 

Don’t look now, but the 10-year Treasury’s yield has surged to 1.76%… And it doesn’t appear to be ready to stop rising….  This is beginning to get very serious folks… The Cartel, has announced yield curve control (ycc), but the bond boys are saying, “Bring it on”!   

OK, I had someone take exception to what I said about our infrastructure’s future yesterday… He pointed out that we have the best highways and interstates anywhere, along with bridges and overpasses… And questioned my mentality to even suggest that the Gov’t needs to get out of the infrastructure business…  Well, I accept that challenge because it was done with class and not snotty like most of the disagreements with what I say come through…

Basically, I’m looking at this as a way to lower our deficit spending… Why do we continue to take on things that cost money that we don’t have to spend?  Quite a few years ago now, I wrote a Sunday Pfennig (yes we used to have those)  and titled it: Chuck’s Debt Solutions…   I suggested that we, as a country, stopped spending money we didn’t have, and we could start by ending all wars… The war on poverty, the war on drugs, the war in the Middle East, etc.    I also suggested that we close all military bases in countries where they don’t’ want us there to begin with, bring the boys home and put them on the border to protect our sovereignty…  In addition, I suggested that we allow entrepreneurs to take over the highway system…  All ways to reduce our deficit spending, going forward…

But these days… These days I sit on cornerstones and count the time in quarter tones to ten, my friend, don’t confront me with my failures, I had not forgotten them…   No wait!  These days no one seems to care about deficit spending… Shoot Rudy, we don’t even have a debt ceiling any longer!  It’s all spend, spend, spend till you drop!   One of my fave Rodney Dangerfield movies was Back to School, where in a college bar he told the waitress to bring a pitcher of beer every 20 minutes, until some one pukes, then bring them every 10 minutes…   So, we, as a country will spend, spend, spend, until somebody pukes, and then we’ll really begin to spend!

And when the rubber meets the road on spending, then the defaults will come, and the negative interest rates, and the digital currencies, and that’s when I’ll sit back and say… I warned you all  that this was coming, but you just wouldn’t listen to me!

The Non-Sequitur comic had a great one a couple of years ago, where a mom and her two kids are sitting in a cave around a campfire heating some form of meat on the fire, and the mom says, “You’re father tried to warn us about this, but we wouldn’t listen”…

OK, enough of that… The U.S. Data Cupboard today has the Case/ Shiller Home Price Index for January, you might recall that December’s HPI was up 10.4%… I can’t imagine that January’s HPI dropped… with mortgage rates still in the 2’s home values are soaring, and people can’t spend enough to get in before the house is gone… thus pushing prices higher and higher..

We’ll also see the stupid Consumer Confidence Index, which is expected to soar in March, because consumers got their stimmy checks!

To recap… The currencies held their ground for the most part on Monday, but Gold & Silver lost major ground on the day …   stocks didn’t collapse as was expected by many analysts yesterday, but now they’ve moved the goalposts and said it will be an April event… So, hold onto your hats, make sure your stop losses are in place, and roll with the tide… Chuck point out why he would prefer the Gov’t to get out of the infrastructure business, and then goes the whole nine yards on ways to reduce our deficit… like anyone cares…

For What it’s Worth…  I’ve been talking about Russia and China’s de-dollarization plans for some time now, and I do believe that it is worth it to circle back and see what’s happening there from time to time, and so, that’s the FWIW article today, which talks about Russia’s new move to dedollarize, and it can be found here: Russia’s National Wealth Fund gets greenlight for gold investments as Moscow pursues de-dollarization policy — RT Business News

Or, here’s your snippet: “Russia’s Finance Ministry has allowed the National Wealth Fund (NWF) to diversify its assets by investing part of the funds into precious metals, including gold.

Chuck Again… Ok… so the question is this: Just how much Gold will they be buying? Could change the direction for Gold these days… I’m just saying… 

Market prices 3/30/21: American Style: A$ .76120,  kiwi .6981,  C$ .7932, euro 1.1733, sterling 1.3753, Swiss $1.0611, European Style: rand 14.9828, krone 8.5764, SEK 8.7342,  forint 309.70,  zloty 3.9709,  koruna 22.269, RUB 75.77, yen 110.36, sing 1.3475, HKD 7.7743, INR 73.64, China 6.5592, peso 20.67, BRL 5.7634,  Dollar Index 93.19,  Oil $60.62,   10-year 1.76%, Silver $24.38, Platinum $1,175.00, Palladium $2,614.00, Copper $4.01, and Gold… $1,669.70

That’s it for today… Well, this will be the first Easter that’s not at my house for 30 years this Sunday… I don’t know how that got changed from the way I always wanted it to be, but it did…  Opening Day for Baseball is Thursday… And in my opinion, it should be a National Holiday!  I told you yesterday that I would bug daughter Dawn about a link… and she came through… National Anthem at Cardinals Spring Training 2021….  Do a YouTube search with that info, and hopefully you’ll see and hear my darling granddaughter sing the national anthem!  So, how have you done with their NCAA basketball bracket? Mine was toast the first weekend when Illinois lost… I should have known better than to pick a Big 10 team! HA! So then I picked a Sweet 16 bracket, and that too has been turned to burnt toast! I guess I’m not very good at picking basketball teams! What a winter down here it has been for yours truly… I have been truly relaxed here, enjoying the sun each day, and reading, reading, reading…  I sure hope it’s warm back home, because it wouldn’t take much to get me back on plane to come here until it is warm back home!  Three Dog Night takes us to the finish line today with their song: Out In The Country…  (before the breathing air is gone, before the sun, is just a bright spot in the nighttime)  I hope you have a Tom Terrific Tuesday and will Be Good To Yourself?

Chuck Butler

March 29, 2021

* Currencies & metals continue to be held to the chopping block… 

* One shining light in the currencies is the Indian rupee… 

Good Day… And a Marvelous Monday to you! Well… Chuck was away, and the currencies didn’t rally! See what I’ve been saying? That the world of markets is upside down… What’s good is bad and what’s bad is good… With most of the market activity dominated by the what’s bad is good… I had a great week of vacation with my daughter Dawn, her husband Jerry, and two of my 4 grandkids, Delaney Grace and Everett… Delaney Grace sang the national anthem at Roger Dean Stadium on Tuesday last week and did a bang up job! I’m supposed to be receiving a link to the audio / video of her performance to share with you, but to date, none has come my way… I’ll bug Dawn again to see if she’s gotten it yet, later today. The Stone Temple Pilots greet me this morning with their song: Interstate Love Song…

Well, I don’t know if you’ve heard this in the past week, but a lot of newsletter writers, analysts, etc. are saying that today, Monday, March 29^th, is supposed to be a day of reckoning in the stock market… A major stock sell off is supposed to take place today… Now I have no idea if they will be correct in their calls for a sell off, but just in case, I sure hope you have your stop losses in place…

Did you receive your stimmy check payments? And we did with it exactly what the Government wants us to do with it… We spent it! I didn’t want to… But we needed to make some repairs at home, and with the extra money, we spent it!  And in doing so, we doubled the GDP for that amount of money spent!

Ok… so the currencies didn’t rally while I was gone… Neither did Gold or Silver… The Dollar Index when I left you on the 17^th, was 91.91, and this morning it is trading at 92.85, so up almost 100 bps…  The price of Oil dropped from $64.19 on the 17^th, to a price below $60 at one point last week, only to rally going into the weekend and get back above $60…  But the more than $4 loss in Oil, really sent the Petrol Currencies reeling… The Russian ruble was on a nice run down to 72.81 and then the rug was pulled out from under it and it trades today with a 75 handle… The Canadian dollar/ loonie, had been trading above 80-cents for a month, but succumbed to the pressure of the drop in the price of Oil, and fell below 80-cents. It was the same for the Norwegian krone, which had seen its price perform nicely and trade down to 8.5225, is trading around 8.56 this morning..

The euro, has really been battered about with all this dollar strength… and this morning it is trading with a 1.17 figure…  Crazy days for sure, and I for one am glad I wasn’t here writing every day about this because I would have been yelling at the walls and waking up the kids!  So now, I get to start with a clean slate, and look forward to what I believe is going to be a rough year for the dollar…

Shoot Rudy, even the Chinese renminbi has lost ground in the past 10 days! There is one shining light in the currencies though… The Indian rupee remains steady Eddie with a 72 handle…  I had mentioned the rupee’s gains before I left, and the currency has held onto them just fine… 

Gold and Silver were up one day, down the next for the last 10 days… Gold finished the week on an up note, and closed at $1,734.30, which was higher than the last price on 3/17, which was $1,729.20… Silver wound up losing ground in the last 10 days, going from $25.96 on the 17^th to $25.13 to close last Friday… Leaving me one question… What happened to the supposed short squeeze in Silver?  Come one, Inquiring minds need to know!  I read a short report last week, from an analysts who said that while Gold was suffering now, he still believed it would be trading at $3,000 by yearend…  Of course, he could have been long Gold and wanting to get buyers keyed up about buying it and driving he price higher… But that would not be ethical….

In the overnight markets… There’s been more slippage in the metals, and the currencies … As I said above the Dollar Index is trading this morning at 92.85, and last night it was 92.81, so some minor slippage in the currencies. Gold is on one of those “down days” as it begins the week down $7.30 this morning, and Silver has lost 25-cents early today. Up one day down the next… Gold was up on Friday, so it must be down today… UGH! 

Well, the ink wasn’t dry on the latest round of stimmy checks, when word came from the White House that they are considering a $3-5 Trillion dollar Infrastructure bill… That just riles me up to no end folks… For years I’ve said that the Gov’t needed to get out of the infrastructure business, and allow entrepreneurship to have at it… Sure they would all be toll roads, but… They would be sound and sturdy, and well maintained, unlike what we have now…

And there’s something else I want to talk about that I believe gets the Gomer Pyle treatment of Shame, Shame, Shame…  The U.S. Gov’t has hundreds of thousands homeless people in this country, many of which are U.S. military veterans… People who have fought for our country… And do we spend $86 Million on hotel rooms for them? NOOOOOOOO… But we apparently do for the Illegal aliens, this headline taken from Business Insider: Biden is spending $86 million on hotel rooms for migrants as his administration struggles to handle the surge of families and kids trying to come to the US…. 

For Shame, Sgt. Carter, For shame…

The U.S. Data Cupboard last week showed some real chinks in the economy’s armor with Personal Income down 7.1%, Consumer Spending down -1.0%… Durable Goods Orders down -1.1% and Capital Goods down .8%…  But what did these awful looking economic prints do to the dollar? Well, contrary to what you would believe would happen, the dollar rallied… Go figure!

The Data Cupboard today is bare, so no economic reports today… And basically most of the week will be void of real market moving data, until we get to Good Friday, this week, when the Jobs Jamboree for March will print…  We’re traveling home on Friday… So, I won’t see this data until I change planes in Nashville…

To recap… It’s been a tough 10 days for the currencies, especially the Petrol Currencies, as the price of Oil fell out of bed in the last 10 days…  Gold & Silver didn’t fare much better, although Gold did post a small gain in the last 10 days, after a week of up one day, down the next… Silver saw about 1/2- cent taken from its value during that same time… Chuck is not happy about the infrastructure bill nor is he happy about spending $86 Million to put migrants in hotel rooms, instead of helping the homeless people in this country…

For What It’s Worth…  Well, remember when I told you (on a couple of occasions) that I truly believed that once the U.S. Gov’t came out with their form of a digital currency, that they would do two things… 1. Outlaw folding cash, and 2. Outlaw all other digital currencies? Including Bitcoin? Well… it was nice to see that a Big Time Trader, Ray Dalio, agrees with me… And this article talks about what Ray Dalio sees as the future for Bitcoin and other digital currencies, and it can be found here: Dalio sees ‘good probability’ bitcoin gets outlawed (yahoo.com)

Or, here’s your snippet: “Billionaire investor Ray Dalio, the founder of the $150 billion hedge fund Bridgewater Associates — the world’s largest — made a case that there’s a “good probability” bitcoin could be outlawed, similar to when the U.S. government made it illegal to privately own gold.

As Dalio points out in his upcoming book “The Changing World Order,” the Gold Reserve Act of 1934 made it illegal for individuals to own gold “because government leaders didn’t want gold to compete with money and credit as a storehold of wealth.” Something similar could happen with bitcoin, which has surged against a backdrop of high levels of debt, low interest rates, a lot of liquidity and stimulus, and investors seeking alternatives to bonds and currencies. At the time of this writing, bitcoin’s price was near $56,559.98, spiking after Elon Musk tweeted that you can use it to buy Teslas (TSLA).

“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control. So I think that it would be very likely that you will have it under a certain set of circumstances outlawed the way gold was outlawed,” Dalio told Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

Dalio pointed out that India’s government is currently exploring outlawing bitcoin and other cryptocurrencies altogether.

“[We] have to see what that means,” the investor added.

A government ban could likely cause demand to plummet. While emphasizing he’s not an expert, Dalio also cast doubt that bitcoin’s privacy could be protected.”

Chuck again… I want to thank the folks at GATA for sending me this link this past weekend… As soon as I saw it I knew it was what I wanted as my FWIW article on my first day back!

Market Prices 3/29/2021: American Style: A$ .7644, kiwi .6998,  C$ .7945, euro 1.1770, sterling 1.3628, Swiss $1.06.38, European Style: rand 14.9911, krone 8.5675, SEK 8.5796,  forint 308.26,  zloty 3.9506,   koruna 22.1618, RUB 75.80, yen 109.60, sing 1.3463, HKD 7.7726, INR 72.74, China 6.5405, peso 20.73, BRL 5.7542,  Dollar Index 92.85,  Oil $61.64,  10-year 1.65%, Silver $24.88, Platinum $1,184.00, Palladium $2,662.00, Copper $4.05, and Gold… $1,727.00

That’s it for today… Kind of tough to jump right into the markets after having spent the last week away from them… But I gave it my best college try… I did an interview with good friend Dennis Miller while I was on vacation, for his letter: Milleronthemoney.com. If you haven’t signed up for his letter yet, You might want to just so you can see what I had to say about digital currencies… Well, the last spring training game is today, for me that is… It’s going to be a hot one… like 7 inches from the mid day sun… But it’s the last one, and I’ll be there! My Cardinals had better learn to hit the ball more consistently or else this is going to be a very long season… The Cardinals will pitch well, and play excellent defense, but their hitting is sketchy at this point… Good news is there are 162 games this year, to get it right… I want to thank everyone that sent me a happy birthday greeting email…  We celebrated my birthday a couple days late, on the deck with condo friends, and family.. I grilled steak on a stick for everyone, and a good time was had by all… Steely Dan takes us to the finish line today with their song: Reeling In The Years…  I hope you have a Marvelous Monday, and that you will continue to Be Good To Yourself!

Chuck Butler