Author: admin

December 2, 2020 

* The euro & the metals have a great day! 

* Chuck has an early Christmas gift for you! 

Good Day.. And a Manfred The Wonder Dog Wednesday to you…  As a reminder, don’t look for a Pfennig tomorrow, the next one will come your way on Monday, Dec. 7, Pearl Harbor Day, for those of you who are historians, like me! Our first day of infamy… More on the on Monday. All by myself… don’t want to be all by myself, any more… (Eric Carmon)…  It’s only been 3 days, and the house is so quiet and eerie during the day, that yesterday, I just went out to my car, got in it and went for a drive just to break the monotony of the quiet house… Today, my two older kids, Andrew and Dawn, will come to visit me, as we will all be going together to a funeral home, as a family member passed away last week. Not someone that we knew well, but knew. And Kathy, Chuck, Andrew and Rachel attended his wedding a few years back. Too young to pass, that’s for sure… RIP Tommy…  OK… back to the Smooth Jazz Christmas station on Pandora this morning, and they have for me The Stephen Kummer Trio’s version of: Have Yourself A Merry Little Christmas…

I looked up buying the CD that Stephen Kummer’s Trio put together that gets the individual songs played on this station, and it was selling on Amazon for $60!!!  I said, well I guess I can listen to it for free on Pandora, so I passed….

What a day for the euro! The single unit began the morning at 1.1966, and last night when I checked, it was trading at 1.2080!  I have a good friend, Mike, that likes to kid me about getting excited about 25-cent moves… Well yesterday’s move was over $1, Mike… now imagine if you have $100,000 invested in euros, and you bought them a last fall, when we first had this discussion…  You would be up $10,000 in profits…  Of course I cherry picked the dates, because, well, that’s my prerogative! HA! 

The euro, Norwegian krone, New Zealand dollar, and sterling were the top three performing currencies yesterday… I have to think that at some point the European Leaders are going to need a crying towel, for as I said a few months ago, a stronger euro is not what the Eurozone needs right now, but as President Nixon’s Treasury Sec., John Connally told finance ministers in 1971… “The dollar is our currency, but it’s your problem,”  So, when will we see some intervention, first jawboning, then physical intervention to at least stem the growing euro’s value? I would think very soon… So, don’t chase this market… If you haven’t already bought your euros, you probably need to wait to see if there is a pullback due to intervention, to buy…  Don’t fall into the trap that most retail investors fall into… Chasing a market higher…

And the euro was joined in the rally VS the dollar by Gold & Silver… Gold closed up $39 to $1,816.20, and Silver closed up $1.38, to $24.08… Silver’s rise was very impressive, folks… You rarely see a day when Silver rises over a dollar in value, without some response from the price manipulators, who especially like to take Silver to the woodshed.  

In the overnight markets, Gold started down $6 probably from some profit taking… And then went through the night, it fought back, and is trading in the early markets this morning up $7.50… And the euro has slipped just a tiny bit from its lofty figure of last night of 1.2080, to 1.2066, as I write… Still quite an impressive move yesterday for the two anti-dollar asset classes… 

I know I don’t talk about Platinum and Palladium very much, but I do have to note that Platinum has been on a tear onward and upward, and has climbed back above $1,000… Good show! 

And in our daily tracking of the Dollar Index, we see that the index has fallen again down to 91.37…  As I’ve explained in the past, the Dollar Index is heavily weighted with euros (from the combination of all the legacy currencies, francs, lira, etc.) But the markets like to use the Index, and so we use it as a quick show of how the dollar is trading… which for the last 6 weeks has been down… 

Ok, I made a big deal out of the Powell, Mnuchin testimony to Congress on the CARES Act spending yesterday, and it did turn into an exchange of words that became almost like a debate, on how each person sees the economy…  One senator called Mnuchin’s calling back of the unused funds as “malpractice”…  And with that, just like everything else these days, this hearing became Political…  There’s much to talk about here, so I have a recap in the FWIW section today on this, so stay tuned, don’t touch that dial, and you’ll come around to it in about 5 minutes…

There could be some real problems ahead for the economy folks… More shutdowns, lockdowns, whatever you want to call them… They didn’t work the first time, for if they did, we wouldn’t be experiencing a new wave… And people suffered, the economy suffered, and life was changed forever… And now we’re going to go the same thing over again… The World Health Organization says that 130 Million people world wide will starve from Lockdowns…  Tom Woods just gave a speech on this and his video can be found here: What I Told State Legislators About Lockdowns | Tom Woods . But I wan to point out here is that 130 Million people exist on the east coast of the U.S. so if you were to drive from Main to Miami, and saw 130 Million people starving, what would you think?

Ok, and no, I’m not out to kill anyone’s grandma…  So, don’t you dare send me any emails telling me that’s what I’m trying to do! What I’m trying to do is to educate people on the truth on the political science… that keeps putting fear into everyone’s mind, for as long as they keep the fear factor high, they can control us…  I’m just saying…

And you thought this was a letter about investments, economies and dolts… Just another public service announcement from yours truly… Think of it as an early Christmas gift!

Hey! I hear we might get a dusting of snow Thursday night!  Wouldn’t it be wonderful to have just a dusting of snow on Christmas? 

OK… sorry for that change of direction there… I got to the fork in the road, and decided to turn a different direction… 

Now, back to our regular programming…   The U.S. Data Cupboard yesterday had the Nov. ISM Manufacturing Index, which I told you I thought would slip from the Rocktober number of 59, and that’s exactly what it did, slipping to 57 (there are some decimals involved, but I rounded them off!) And next month’s report for Nov. should show more rot on the vine…   When you look under the hood of the report you find that Managers that were surveyed were skeptical of the future, and the employment component of the report was very soft…   

I think this data is very important, as it is showing us that the momentum the economy was building is fading fast… 

Today’s Cupboard only has the ADP Employment Report for Nov. the precursor to the BLS Jobs Jamboree on Friday this week… And again, I believe that the ADP report will be weaker than it was in Rocktober…  We were also supposed to see U.S. Vehicle Sales yesterday, but the data was delayed…  I guess they didn’t have enough time to massage and cook the numbers to be just right, as Goldilocks would say…  

To recap… The euro had a great day, and dragged some selected currencies with it to the dance party. Gold & Silver had great days too! The overnight markets started out on the wrong foot for the metals, but turned around at some point while I was sleeping a bit, and is up $7.50 in the early trading today…  And the Powell / Mnuchin testimony before Congress turned political, just like everything else these days… It turns my stomach when I see it coming… Why is everything politicized? UGH! 

For What It’s Worth…  Well, I built this up earlier in the letter, and the snippet won’t be able to capture the who shootin’ match, so here’s the link to the article I used, so you can check it out in its entirety… Rare Mnuchin-Powell spat takes center stage at COVID-19 hearing | TheHill

Or, here’s Your snippet: “A rare public break between Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell took center stage during a Senate hearing Tuesday as Republicans and Democrats sparred over the expiration of coronavirus relief.

Democrats were eager to exploit the fallout from Mnuchin’s recent decision to close $454 billion in Fed emergency lending facilities set up through the $2.2 trillion CARES Act, a move that elicited public criticism from Powell.

While the Fed initially disagreed with Mnuchin’s decision, Powell eventually relented and agreed to return the unused credit protections by Dec. 31 without endorsing the Treasury secretary’s decision.

Both Mnuchin and Powell sought to play down the divide before the Senate Banking Committee on Tuesday by deferring to each other’s authority and treading carefully around disagreements. Mnuchin insisted he was simply abiding by a statutory deadline to wind down certain programs by the end of the year, and Powell said the Fed did not dispute Mnuchin’s legal authority to make that call.

“Our thinking is that we would have left facilities in place to be backstops. We don’t question the secretary’s decision about the CARES Act money because that’s entirely his decision to make. But I think central banks generally would have done that,” Powell said.

But furious Democrats, who insist the lending facilities could be crucial if the third COVID-19 wave causes more financial turmoil, urged Powell to take a tougher stand against what they called a politically motivated decision to undermine the economy before Mnuchin departs on Jan. 20.

“My decision not to extend these facilities was not an economic decision,” Mnuchin told senators. “I find it implausible that any member of this committee believed that in voting for the CARES Act, you were authorizing me to invest $500 billion to make loans in perpetuity.”

Chuck again…  And now this morning it was revealed that President Trump signed an executive order giving Mnuchin $50 Billion to use for the ESF (exchange stabilization fund, or slush fund if you will) and Mnuchin decided to take the extra $386 Billion on his own…  this stuff is crazy folks, and just shows to go ya that when you start dealing with these large numbers it numbs the minds of people, which is their objective to keep everyone confused…  I’m just saying… 

Market Price 12/2/20: American Style: A$ .7368,  kiwi .7047, C$ .7725,  euro 1.2068, sterling 1.3332, Swiss $1.1156, European Style: rand 15.3760, krone 8.8682, SEK 8.5183, forint 296.27,  zloty 3.7092, koruna 21.8780, RUB 76.02, yen 104.55, sing 1.3403, HKD 7.7515, INR 73.70, China 6.5715, peso 20.09,  BRL 5.2890,  Dollar Index 91.37,  Oil $44.42,  10-year .92%, Silver $24.00, Platinum $1,015.00, Palladium $2,427.00, and Gold… $1,823.70

That’s it for today, and this week… next week will be a full week, the Good Lord willing, and Creek don’t rise… Did you know that the Creek don’t rise, isn’t about the bubbling brook rising, but rather the Creek Indians rising….. Good to know! I’ll see my oncologist today for the last time until April, when I return from Florida…  She’ll be so sad to see me go… HA!   My latest blood sugar numbers were lower and keep going lower, which is a good thing… I don’t want to be a diabetic!  When I go to doctor’s offices they always ask me if I’m a diabetic, and I love telling them no…  and I want to keep telling them no! I’ve cut the carbs I intake, not a keto diet, just a cutback of the carbs… No sugar means so sweets, and brother do I have a sweet tooth! So, that alone is a very big pain to me! But I’ll do what I have to do… You can bet your sweet bippie on that! OK… enough of that talk!  One of these days, medicine will come up with a magic pill that cures all that ails me… Hey! I’ve got to have hope, and dreams right?   Well the jazz Christmas station is playing Beggie Adair’s version of:  The Holly and the Ivy….  I hope you have a Manfred The Wonder Dog, Wednesday, and will be Good To Yourself!

Chuck Butler

 

December 1, 2020

* The dollar bugs fight back on Monday… 

* Gold & Silver are back on the rally tracks today! 

Good Day… And a Tom Terrific Tuesday to you!  And Welcome to December… And good riddance to November!!! I think I’m going to need Tom Terrific today to fight off the Crabby Appleton mood I’m in this morning… You see, the gout in my arm returned over the weekend, and the normal treatment for this ailment is a 5 day pack of steroids. Unfortunately, for me, the first two days of high doses leaves me sleepless in Seattle… Sunday night I got 1 hour of sleep, and last night maybe, 3 in bits… I’m on the downside of the doses now, so maybe tonight some real sleep and rest is in my future. But for today, I’m in no mood to be dealt with, so if you have something not so nice to say to me in the Pfennig Replies, you had better watch out for my reply! Oh, and I’ve decided that I’m not going to write on Thursday morning, as I would be hurried throughout the morning to get it done and out the door, in time for me to be at my oncologist’s office in time.  So, I just made an executive decision for the first time in 4 years!  I haven’t been officially retired for 4 years, but my last couple at the bank were in a reduced capacity mode… They had sent me out to pasture 2 years, before TIAA came along and pulled the pin on my career… But I really couldn’t answer the bell every day any longer, so it was all for the good… I would have liked to been able to make the call myself though, I would have thought that after I had done for the Bank, they would have let me do that, and not just call me on the phone and tell me the gig was up…  I’m just saying…   Ok.. see, I’m in no mood to be nice today! Weezer greets me this morning with their catchy tune: Island In The Sun… 

Ok, that was a long first paragraph… I just thought I would give the folks that only read the first and last paragraphs, something to read while they sip their coffee….   Ok, well, the dollar weakness that we saw yesterday morning, backed off a bit, not much, but by a bit, and it kind of took the edge off the selling of the dollar… For the day, the euro was 1.1987 in the morning, and finished the day at 1.1958, and the Aussie dollar (A$) which was trading over 74-cents in the early morning, finished the day at .7366…  Gold, which began the day down $17 fought back throughout the day, and finished down $11, to close at $1,777.20, and Silver, which began the day down 54-cents, ended the day down 10-cents, to close at $22.70. 

There was no vaccine news, except the VP announcing that distribution of a vaccine will begin in a couple of weeks… Nothing new there, so one has to wonder, what or who threw up the roadblock for the currencies to keep pushing the dollar downward… Strange days indeed, so peculiar momma, Strange days indeed. (John Lennon) I would normally say that it looked like some profit taking was the trading pattern of the day, but these days, with all the manipulations and back room deals, it has become very difficult to decipher what’s what when it comes to a day of selling…  

In the overnight markets, It’s a whole different story for Gold & Silver this morning… Gold is up $31 to $1,808, and Silver is up 78-cents to $23.48. I had a long time reader send me a note yesterday, and asked me  if I thought the low was in for Gold?  I said that I thought that Gold would recover once the delivery period for the December Contracts at COMEX ended, which would began late last week and early this week.  I did say the other day that historically, Gold doesn’t perform too well, during past Decembers… 

But those Decembers didn’t just have the “rout of the month” that Gold experienced in November, so a recovery will be very welcomed, and should erase the dark days of November…  I just thought of something… This year’s November for Gold will be another reason I dislike the month of November so much! 

I had a dear reader send me a note yesterday, to tell me about how he protects his Bitcoin, and I congratulated him on doing that, but… Think about that for a minute, how many people are doing that?  I would think that backing up your computer to a flash drive every night, would be something that most people fail to do, just like changing their passwords, or even turning their computer off and back on, to allow it to refresh… 

OK… I had received a notice from LinkedIn that a former colleague, Peter Mason, has celebrated 1 year at his new job, so I logged into the site to send him a congrats notice, and when doing so I noticed this  message from the Canadian Revenue Agency (CRA) who returned a man’s tax return because of the way he answered this question: “Do you have anyone dependent on you?” the man wrote: 2.1 Million illegal immigrants, 1.1 Million crackheads, 4.4 Million unemployable scroungers, 80,000 prisoners in 85 prisons, and 450 idiots in parliament, thousands of politicians, and an entire group that call themselves Senators.”  

The CRA wrote back that the answer was unacceptable, to which the man answered, “ who did I leave out?”   

Now that’s funny I don’t care who you are, (as Larry the Cable guy says)!  I needed that diversion away from my Crabby Appleton mood this morning!

Of course seeing Gold & Silver back on the rally tracks this morning, and not have to report another “drive-by shooting” cheered me up a bit before reading that CRA stuff…  

The Dollar Index is trading at 91.80 this morning, and shows the pushback that the dollar bugs employed yesterday to bring the Index to that level, from the 91.60 is sat at yesterday morning.  But one day’s trading doesn’t make a trend, like Rome wasn’t built in a day. You have to step back and look at a month’s worth of trading to see the forest from the trees… And that’s what I did yesterday, telling you that the Dollar Index was 93.39 on 10/20…   

I just wish the price manipulators of dollars would realize that their engineered take downs don’t stop of trend when the trend is firmly in place… All they do is give potential buyers of currencies an opportunity to buy at cheaper levels… And we all do thoroughly enjoy cheaper levels, when we’re looking to buy, don’t we? 

Of course if you’re already set on your balances, and not looking to buy more at the time of the price dip, you don’t like seeing a cheaper buying opportunity!  So, as the old saying goes, You can make 1/2 of the people happy 1/2 of the time…   sure does come into play here, eh? 

OK… get ready for this today…  Cartel, I mean Fed, chairman Jerome Powell, and Treasury Sec. Mnuchin will go before a Congressional hearing on the CARES Act spending…  This is where things could get quite ugly, IF the right questions are asked and answers are demanded… Honest answers…  I’m sure our friends over at www.wallstreetonparade.com will have something to write about, since they’ve been all over this ongoing missing funds since the beginning…  

Other than that testimony, the U.S. Data Cupboard has the Nov. ISM Manufacturing Index today. The ISM has been a real mystery to me, in the past couple of months as it recovered from its sub-50 levels of the spring, and jumped to a 58 level in Rocktober… But what about the shutdowns? I think the Nov. report today will show the effects of the shutdowns, and will be weaker… But then I never expected to see the ISM rise so strongly the last few months either…. Hmmm….  

There will also be some cartel, I mean Fed Heads, on the speaking circuit today, with Brainard, and Daly, speaking…  I started to make a joke about it being Ladies Day, but then I thought, that might be not politically correct, so I won’t…    See? I’m waking up and rounding about in a better mood as I write… So, writing is good for my soul, I guess…  It doesn’t put me to sleep is all I know! 

To recap…  The dollar bugs pushed back yesterday, but the move was small, and the currencies are back to pushing the envelope of currency appreciation across the desk once again this morning. And after suffering through another Monday morning of downward movements, Gold fought back, although still ending down on the day, but has reversed its downward course this morning, and is up $31 as I write…  Today, is the day that Powell & Mnuchin speak to Congress about the Cares Act spending, Chuck believes this could be really good Pfodder for the Pfennig tomorrow! 

For What It’s Worth…  OK… longtime reader Bob, sent me a link to an article about businesses shutting down, and at first I thought, no news here, but when I clicked on it, the article talks about how many businesses have shutdown in New Jersey… I have friends that live in N.J. so this interested me and thought it to be FWIW worthy! And you have find the article here: Almost one-third of small businesses in New Jersey have have closed: report | TheHill

Or, here’s your snippet: “A third of small businesses in New Jersey have closed down in 2020, according to a report from The Star-Ledger newspaper.

“It’s really bad… And without federal dollars coming into New Jersey, the Main Street stores and other establishments are not gonna make it through the winter.” said Eileen Kean, the state director of the National Federation of Independent Business.

Harvard-based data project TrackTheRecovery.org estimated that 31 percent of businesses have closed down so far as of Nov. 9. This number is just above the national average estimated by the website. The New Jersey Business & Industry Association reported similar numbers, estimating 28 percent of businesses had closed down by October.

The newspaper notes that despite the holiday shopping season, business leaders are still concerned that the trend could get worse as stimulus talks stall on Capitol Hill.

New Jersey, like most of the U.S., is currently experiencing a surge of new cases. Over 329,000 cases and nearly 17,000 deaths have been reported. On Nov. 21, New Jersey recorded 4,669 cases, the most it has ever reported in a single day.

Last week New Jersey Gov. Phil Murphy was harassed by hecklers who shouted at him while he and his family ate at an outdoor restaurant. Speaking to “CBS This Morning,” Murphy said he understood “the overwhelming amount of stress.”

Chuck Again…  economic shutdowns are really stupid and that’s my take on it and you won’t change my mind!  

Market  Prices 12/1/20: American Style: A$.7361,  kiwi .7035, C$ .7706, euro 1.1966, sterling 1.3321, Swiss $1.1038, European Style: rand 15.3040, krone 8.8613, SEK 8.5350,  forint 298.56,  zloty 3.7447,   koruna 21.9276, RUB 76.17, yen 104.41, sing 1.3408, HKD 7.7517, INR 73.58, China 6.5784, peso 20.11, BRL 5.3411,  Dollar Index 91.80,  Oil $45.18,  10-year .86%, Silver $23.48, Platinum $987.00, Palladium $2,423.00, and Gold… $1,808.60

That’s it for today… A little shorter than the previous 3 Pfennigs, eh? I look up at my pictures on the poster board that faces me at my writing desk, and I see a picture of my darling granddaughter, Delaney Grace sitting on Santa’s knee when she was 2 years old… And I thought, man, is she so darn cute! And then a sad thought came into mind, that kids won’t be able to sit on Santa’s knee this year and tell them what they were wishing him to bring them…  This is American tradition…  Damn plandemic!  Man, I quickly went back to Crabby Appleton there didn’t I?  Ok, I had better end this here before I really say something to tick off everybody!  Faces take us to the finish line today with their song: Ooh La La…  One of my all time fave songs for sure!  I hope you have a delightful December, and a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

November 30, 2020 

* Currencies have a good week, and start this week up!

* Ed Steer called the takedown in Gold last week “another drive-by shooting!” 

Good Day… And a Marvelous Monday to you! I hope everyone had a very nice Thanksgiving… I did, and quite frankly, it was better than most! There were the 12 of us, and we all sat around the dining room table, no need for a kids table this year… I started asking my grandkids, what they were thankful for, and then it turned into everyone taking a turn with their thanks… When it came to me, I simply said, “I’m thankful that the Good Lord has allowed me to live all these years, so I can be here today, with all of you”… Darling daughter Dawn, began to cry, and we had to change the subject…  Friday, was grandson Everett’s Birthday… He’s 10 now… Where have the years gone? I asked Everett if he had a girlfriend yet, because when I was 10 I had a girlfriend…  He got all red and said no way! I’m back to rock-n-roll this morning, which means that Sugar Ray is up first this morning with their song: Every Morning…

Saturday morning, was the first time I looked to see what had happened on Friday… And by that time I had read Ed Steer’s Saturday edition, in which he described the selling in Gold On Friday as: “Another drive-by shooting”… OMG what are these demons doing to the price of Gold? The shiny metal lost another $22 on Friday, and closed at $1,788. OK, call me crazy if you will, but these takedowns last week had a purpose to them…  And I think I know what the purpose was…   Oh, wait, I’ll let this missive from Dave Kranzler which was reported by the GATA folks, tell you… (he’ll make more sense of this than me!)

“The gold price was given a a quick $35 ride on the down-elevator today starting at 7:40 a.m ET. There were no news items or events that occurred that would have triggered the price hit.

More likely the Comex banks implemented another Comex open-interest liquidation operation targeting the remaining 45,000+ longs in the December contract in an effort to get the December gold contract open interest as low as possible ahead the December 1 notice period, which begins this afternoon.”

In other words… The COMEX probably doesn’t have the physical Gold to meet all those deliveries of the longs for December, so if they can get those longs to sell before hand, then no delivery would be necessary…  Man, did they go to some great lengths to make that happen!  

On the other hand, the dollar got sold like funnel cakes at a State Fair on Friday, and the euro climbed to 1.1965… The Aussie dollar climbed to .7392, and so on… The Dollar Index fell to 91.79…  On its way to lower levels for sure… At least I think so… There was a report out late last week that 21% of the toal money supply was printed last year… That means that money supply increased by a HUGE amount… But until we see the velocity of money being spent rise, inflation is going to remain in check, somewhat that is…  John Williams over at shadowstats.com, who computes inflation the way it used to be computed, before, Clinton, Greenspan, and the Boston Commission changed all that, shows that inflation right now is around 5%…   Not the sub 2% the hedonically adjusted CPI shows…

So, what I was getting at before I went all inflation on you, was that while money printing in of itself is not the only thing that causes inflation, it does, however, create a situation where you’ve got more dollars that dilute the value of the current dollars… And that, my friend, is why we’re seeing the dollar get moved downward nearly every day now, as witnessed by the Dollar Index, which a couple of weeks ago, when we first started tracking it, was 93.39 on Rocktober 20^th…   And this morning it’s 91.60, still going down… 

Usually, when the dollar is falling in value, it’s falling against the non-dollar currencies, and Gold… But not during last week’s engineered takedowns… I think the takedowns have become a game for the price manipulators, a game of limbo… to see how low it can go!  I had a dear reader send me a note last week, and ask me this: “If Gold is continually taken down like you describe, and Bitcoin just keeps going higher, why would you still be telling people to buy Gold?” 

 

OK, I’ve been through this before, but who knows, who was participating in class that day, so here we go again…. “First of all, Gold is a storage of wealth…  once you own Gold, you really shouldn’t care what it does, for we know that it’s not going to go to zero, never has, never will…  Second, these price manipulations simply give potential buyers, cheaper levels to buy… They don’t take away the need to own Gold… And then finally, I truly believe that Gold is going to move higher, and higher as we go into 2021… I read last week, where a casino bank said that Gold would average $2,300 in 2021…  But put that aside… What are your beliefs of where inflation is, and where it’s going?  If you believe that the war on inflation that was won by Paul Volcker in 1981, is  never coming back, then by all means don’t own Gold… But if you believe like I believe that inflation is going to be just one of the major problems we experience going forward, defaults, with dollar depreciation, and digital dollars, amon them, then you had better be long physical Gold… And there’s no better performing asset class since 2000, than Gold!…  I’m just saying!

And I gave you my thoughts on Bitcoin and all other digital currencies out there right now, last week. I would suggest you go back and read the Wednesday Nov. 25^th Pfennig, that can be found here: www.dailpfennig.com 

And since I don’t know who’s participating in class each day, when I talk about Gold, I’m also referring to Silver… 

And before I go on longer this morning, the overnight markets haven’t been kind to Gold & Silver with both down significantly already today, which would make 4 consecutive Mondays of Engineered takedowns… The dollar however is taking a ride on the slippery slope, and the currencies are booking gains as everyone arrives at their trading screens this morning. 

The euro is pushing the envelope of currency gains closer and closer to 1.20, and the A$ was trading over 74-cents last night when I checked the markets, but there must have been some profit taking because is has slipped back below the 74-cent figure this morning…  The New Zealand dollar/ kiwi has been the best performing currency in the last month, and reminds me of the fact that during the 2002-2011 weak dollar trend, kiwi was the best performing currency for that trend.  

Do you recall me telling you a little ditty about the Euro Wannabes? Polish zloty, Hungarian forints, and Czech koruna, are the currencies I named, “the Euro Wannabes” back in 2003… Recall that I said that we’ll know for sure that the weak dollar trend is in place, when the Euro Wannabes are firmly on the rally tracks…  And guess what boys and girls? That’s where they are getting situated on…  I’m just saying…

The price of Oil continued to hold the $45 handle on Friday…  That was quite the jump last week for the price of Oil, and now, what’s next? Well, I believe that we won’t see any further upside to the price of Oil until people start receiving the vaccine…  Once the distribution problems are solved, and people are lining up for a shot, then the viewpoint would be that it won’t be long before the economies of the world begin to ramp up again, and that’s when we might see further upside in the price of Oil…

Let’s talk a bit about Currency Trends….  The first currency trend was a weak dollar trend that began in 1971, and ended in 1978….  Then came a strong dollar trend from 1979-1985… Then a weak dollar trend from 1985-1995, followed by a strong dollar trend from 1995-2002. Our last weak dollar trend was from 2002-2011… And we’ve been in a strong dollar trend since, but I do believe that the new weak dollar trend has begun…  I know that the last three years years, we’ve se seen false dawns with regards to a new weak dollar trend, but this time, I think it’s not a false dawn…  So, are you ready for this multi-year weak dollar trend? 

I would think that a very large number of people that held non-dollar currencies in the past, aren’t even thinking that they should load up again, now… They’ll wait until the taxi driver asks them if they own any euros… Or Time says, the dollar is in the dumps”, or something like that…  And then they’ll be chasing the prices upward… Good luck with that…  Instead of cyber-Monday, it should be “currency-Monday”…  

The U.S. Data Cupboard last Wednesday had a plethora of economic data to show us… And like I said on Wednesday morning before these reports printed that I thought that we would begin to see rot on the economy’s vine, from the shutdowns already taking place in Rocktober. And well, that’s exactly what we say…  So, let’s go through these…. First up the Weekly Initial Jobless Claims rose again for the 2^nd week to 778,000, from 742,00 the previous week. The Continuing claims moved up  for the first time in weeks to 20.45 Million… (That’s an Unemployment Rate of: 13.63%, using real numbers!), Durable Goods Orders fell to 1.3% from 2.1 (in sept), and Capital Goods also fell to .7% from 1.9%… Then along cam Personal Income, which went negative in Rocktober, -.7%, and Personal Spending was also down to .5% from 1.2% previously…  And finally Core Inflation was flat… 0.0% move in inflation for Rocktober… 

This week’s Data Cupboard doesn’t have much, with only ISM (manufacturing index) for this month and the Jobs Jamboree on Friday…  I’m looking for a big drop in the jobs number for November, but who knows that the BLS is going to do, right?

To recap…  Gold saw another “drive by shooting” on Friday, and while it tried to come back during the day, it lost another $22, closing at $1,788, and is down already this morning too… The dollar is falling in value folks… The Dollar index which we noted on 10/20^th was 93.39, and today it’s 91.60. The euro is climbing, the A$ is climbing, and Chuck believes that what we’re seeing is a new multi-year weak dollar trend…  Chuck talks about Gold and the reasons you should ignore the price engineered takedowns, unless you feel the need to buy more physical Gold at cheaper prices…   And the Data Cupboard last week, showed a lot of rot on the U.S. economy’s vine… Chuck thinks this is just the beginning of more rot being exposed, as the shutdowns come on board.

For What It’s Worth…  Well, the Weekly Initial Jobless Claims and the Continuing Claims went higher in the week before Thanksgiving… This weekend, there was news that Disney is going to layoff 32,000 workers… That article can be found here: Walt Disney Company Plans to Cut 32,000 Jobs Following Coronavirus-Related Park Closures – Sputnik International (sputniknews.com)

Or, here’s your snippet: “U.S. media and entertainment conglomerate, the Walt Disney Company, has announced that it will look to cut 32,000 jobs in the first half of the 2021 fiscal year, 4,000 more than previously announced, as the COVID-19 pandemic continues to decimate the theme park industry.

“Due to the current climate, including COVID-19 impacts, and changing environment in which we are operating, the Company has generated efficiencies in its staffing, including limiting hiring to critical business roles, furloughs and reductions-in-force. As part of these actions, the employment of approximately 32,000 employees primarily at Parks, Experiences and Products will terminate in the first half of fiscal 2021,” the Walt Disney Company said in a Securities and Exchange Commission filing that was published on Wednesday evening.

The coronavirus pandemic forced the temporary closure of the company’s Walt Disney World Resort in Florida and Disneyland Park in California. Both have since reopened, the latter in mid-November, although attendance has been capped as part of social distancing restrictions.

On November 12, the Walt Disney Company said that operating income at the company’s parks had fallen by $6.9 billion year-on-year in 2020 due to the closures and reduced attendances upon reopening.

Josh D’Amaro, the chairman of Disney Parks, announced in September that 28,000 of the unit’s 100,000 U.S. employees would be made redundant.”

Chuck again…  On Friday, last week, Ed Steer had a cartoon posted regarding this story about the layoffs at Disney…  It showed people in line at the Unemployment Office, and in the door comes Mickey Mouse!  Yes, even the decendents of Steamboat Willy, are filing for unemployment these days…

Market Prices 11/30/20:  American Style: A$ .7385, kiwi .7048, C$ .7720, euro 1.1987, sterling 1.3338, Swiss $1.1069, European Style: rand 15.2750, krone 8.7864, SEK 8.4492, forint 299.34, zloty 3.7297,   koruna 21.8075, RUB 75.99, yen 103.97, sing 1.3370, HKD 7.7511, INR 73.89, China 6.5760, peso 20.06, BRL 5.3421, Dollar Index 91.60,  Oil $44.84,  10-year .85%, Silver $22.26, Platinum $967.00, Palladium $2,427.00, and Gold… $1,771.50

That’s it for today…  I’m up in the air on writing on Thursday, as I do have to visit my oncologist for the last time until April (when I return from Florida) on Thursday, but not so bright an early… So, maybe you’ll see a Pfennig in your email box on Thursday, and maybe you won’t…  A great weekend for the two schools I follow… My beloved Missouri Tigers won their football game on Saturday, and the very strong St. Louis University Billikens won their basketball game also on Saturday VS LSU… And without their Big Man who had to miss the game with a concussion. If COVID doesn’t interfere, the Billikens should have a very good season! Lots of senior leadership!   Well, my wife left for Florida again yesterday, and I’ll be alone during the days for the next two weeks…  Before she left, the Christmas tree was putt up, decorated and lit up… I love a decorated Christmas tree…   The Turtles take us to the finish line today with their song: She’d Rather Be With Me….   Hmmm, I was just thinking… no, don’t go there Chuck!   I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

 

November 25, 2020 

* Gold & Siler get whacked badly on Mon & Tues

* Turkey for me, Turkey for you… 

Good Day… and a Wonderful Wednesday to you! I’ve decided to go back and forth with the other Wednesday greeting, so for this week, its this one!  Well, my visit to the hospital yesterday early morning was fine… The doctor called me yesterday afternoon, to tell me that there was no NEW cancer found…  I thank the Good Lord for looking over me!   Things sure are crazy in the world today, eh? I sure hope that the police will not take any orders to storm houses that are hosting Thanksgiving dinners!  I doubt that will happen, as policemen have families too, and know how difficult it has been this year to be a regular family….   OK… Tomorrow is Thanksgiving… I’m really of the opinion that it’s nobody’s business who or how many people I have in my house… And I’m not going to cower to anyone that tells me I can’t do something in my own house! (except if I ever decided to cook meth!) Then I guess I would deserve it! HA!  Smooth Jazz Christmas is on again this morning, and the song is: It’s The Most Wonderful Time Of The Year… 

OK, Pfennig Tradition calls for Adam Sandler and his Turkey song to lead us off today… so take it away, Adam!

Turkey for me
Turkey for you
Let’s eat the turkey
In my big brown shoe
Love to eat the turkey
At the table
I once saw a movie
With Betty Grable

That song has got to be one of the silliest songs ever, but I still get a kick out of hearing Adam do the song, and it brings a big smile to my face…

OK… Well, that makes 3 Mondays in a row that the price manipulators have taken down the price of Gold by HUGE chunks! That’s right, 3 Mondays in a row…  So, from now on, if you want a cheaper price to buy Gold, wait until the price manipulators have finished on Monday, or like this week on Tuesday too… As they took Gold down again on Tuesday…   Gold has lost over $60 in its value this week, and for what?   I’m shaking my head in disbelief that this is going on, while Rome is burning… The world, as a whole, is circling the bowl, and Gold is get sold? Come on! Give me a Break here! I may have been born, I just wasn’t born yesterday!

And the manipulations didn’t stop with Gold & Silver either! Recall that on Monday I mentioned that the euro had climbed above 1.19, but wondered how long that would last?  Well, it didn’t last too long, as the single unit was sold down to 1.1830 during the day…  It rallied back yesterday, but my-oh-my was the damage to the euro too much? I would say so… but then, I presume that some of the selling was justified, as the safe haven assets of Gold, euros, yen, sterling, all got sold on Monday… But as I said above, Come on! That’s crazy!

In the overnight markets, the currencies have held their gains from yesterday, and the euro is pushing the envelope toward 1.19 once again. Gold is up $5 in the early trading today, and after the bloodletting of Gold’s price the last two days, I’ll take $5 any day!  There’s a ton of economic data to print today, so it’ll be interesting to see where traders take these two asset classes…. 

And don’t look now, but the price of Oil has jumped higher to a $45 handle this morning… I read where the Oil traders are really into the storyline of how the vaccine brings the economy back and drivers of automobiles back on the road…  I’m thinking that they have been drinking the Kool-Aid, that’s spiked… That’s what I’m thinking… But, shoot Rudy, we’ve got the price of Oil higher, which means the Petrol Currencies are looking healthier, including the Russian ruble and Norwegian krone… 

All that anyone wants to talk about today, markets wise, is Bitcoin… There are people out there telling investors to sell their Gold and buy Bitcoin… Wait, What? Yes, that’s right, sell your storage of wealth for a scam, or ponzi scheme, as I see it… Now, that makes a lot of sense to me! NOT!  OK, let’s go through this…  I realize that Bitcoin has made many riches for investors to date…  But… here’s where the rubber meets the road, folks… What if, you go to turn on your computer one morning and find that your stash of Bitcoin is gone? Someone hacked your computer, and stole your Bitcoin, along with your identity, etc.  Who ya’ gonna call? Not Ghostbusters that’s for sure! But they would be about as much help as anyone else, because there will be no one to call! 

Then think about this seriously…. Gov’t’s all over the world are creating their own digital currencies, and the U.S. is far out in front here… Now what makes you think that the U.S. or any Gov’t would allow a private digital currency to compete with their own?  Can you say, private digital currencies could be outlawed? There! I knew you could!      So, go ahead and sell your Gold, I’m sure there are plenty of investors out there that would love to scoop up some cheaper priced Gold!  

You know, the more I think about this armegeddon that we’re going through, and it will only get worse, in the coming months, I wonder about how Joe six pack is going to put bread on his table, or a roof over his house…  And then add to that the prospects of higher taxes next year, and an increase in Capital gains taxes, etc. It would make sense if you own something that has gone through the roof in price since you bought it, and you weren’t planning on holding it very long, to sell it while the getting’s good, with regards to taxes…   Obviously, the stock jockeys aren’t looking at that yet…  But as you would expect, I am…

On Monday, I talked briefly about taxes… And then came my weekly letter from my fave writer, Grant Williams, and his Things That Make You Go Hmmm…   And he spent this week talking about taxes… I have lots of thoughts to add to his, and I’m going to do so here…   Tax the Rich! That’s all we hear these days… Did they, who make these claims ever stop to think that the wealth that the “rich” have, has already been taxed? And if we’re talking about capital gains taxes, that money has already been taxed a couple of times! Same with dividends…  But in fairness to those that believe that the panacea of their money problems lies with the “rich”…  The wealthy always seem to get thrown in as the “cure all” for all that ails us…  And they make easy targets, because… well, they’re so well off!

And I believe that it won’t be long here in the U.S. until we see an attempt to go after the “rich”…  Here’s a quote from Grant Williams, “With the ongoing struggle between asset-rich Boomers and asset-poor millennials constantly building up steam, this will be coming to a head sooner rather than later and the ‘wealthy’ are going to find themselves squarely in the crosshairs.”

I’m not considered “wealthy” so I have no dog in the hunt here… I just wanted to point out that while it does seem to be the low hanging fruit on our trip to find equality, I don’t think that in the end it will solve anything…  Because once you give an inch, the next thing will be wanting to take a foot, then a yard, and soon enough it will be a mile…  No one will ever be satisfied, period…  And that’s it for me on taxes today…

Before I go on… I’ll leave my thoughts on Taxes just lay there, and allow the soothing way that Mr. Grant Williams explains things take it from here….

“It’s been a wonderful ride, folks, but the time to pay the piper is here and, if you have ‘wealth’ – particularly if it’s in the form of capital gains from the wildest, most improbable equity bull market of our lifetimes – might I humbly suggest it may be time to peer a short distance into the future and take precautions to guard against what you’re being told by those in control of such things is most definitely on its way? The fact that capital punishment is most certainly going to be liberally dished out, doesn’t mean you have to merely sit quietly and wait for it to be applied. “ – Grant Williams from TTMYGH……

Oh, and I do have one more thought here, folks…(you knew I would, right?)  Recall that I believe that we’ll all be using a digital currency in the not so distant future, right?  Well, think about the Gov’t and its ability to implement taxes….   If we have digits in our account that can’t be taken out and stuffed under pillows and into coffee cans, then they are there to be taken…. By the Gov’t with any % of taxation that they deem to be “what’s needed”…   I’m very afraid that’s where we’re headed folks…  And when that happens, I will take my bat and ball and glove and go home… My days fo writing will be over, for there will be no markets to talk about any longer…   But if you’re the gov’t. and you see an opportunity to get everyone on the same playing field, tax them accordingly, and watch the money flow into the Gov’t’s coffers, to whittle away any way they feel it should be whittled away, why would you wait for 2025, 2030, or 2023? I’m just saying…

The great comedian, Chris Rock, has this to say about Taxes…. “Taxes aren’t paid, they’re taken”…. How true this will all be when we’re digitized!

OK, in other news… our old friend, (NOT!) Janet Yellen is back to haunt us… She’s been named the new Treasury Sec. Wait, What? I thought the Fed was supposed to be an independent Central Bank? But now the former Fed Chair, is the Treasury Sec. how convenient is that?  Well, it appears that the swamp, is filling up very quickly again…  I’m just saying…

And then speaking of the Gov’t…..  David Crosby, yes, THAT David Crosby, posted something to Twitter that I also saw from someone else, but since David Crosby posted it, I went with that… Check this out from Twitter:

“The vaccine should be tested on politicians first.

If they survive, the vaccine is safe…

I they don’t, the country is safe… 

Now, isn’t that something we can all get behind? “

As I told you on Monday, The U.S. Data Cupboard is chock-full-0-data today…  I’ll list all the data prints today, and save comment on them for the end… We start with: The Weekly Initial Jobless Claims from last week, then Rocktober prints of Durable Goods and Capital Goods Orders, and Personal Income and Spending, and finish it off with Core Inflation… There will also be another revision of 3^rd QTR GDP… Which if you recall, I did the math on last time it tried to pull the wool over our eyes….

I believe we’ll see some rot on the economy’s vine with these prints, folks… And that was in Rocktober, before the latest surge of virus cases, caused Governors, Mayors, Congress, to lose their collective minds, and begin the whole shutdown process over again…  We’re watching the systemic take down of the great American economy, folks… If you’re like me, you sure don’t like what you’re seeing…

To recap…  it’s been an ugly week so far for Gold & Silver, with the euro getting sold on Monday, but rallying on Tuesday.   The selloffs of Gold & Silver on Monday & Tuesday have been colossal to say the least…  Chuck just doesn’t get it, but then that’s the plan in his opinion, to pull the wool over our eyes.   Janet Yellen, formerly of the Cartel, I mean the Fed, will be our new Treasury Sec. And the incestuous feeling between the Cartel and Gov’t just grows closer… And Chuck goes out on a limb with Bitcoin…

For What It’s Worth…  Well… this was an interesting article, with the viewpoints of a couple of the casino bank dudes, giving their thoughts on what the Fed is going to do in the coming months, and it can be found here: Central Banks To Add Liquidity Worth 0.66% Of Global GDP On Average Every Month In 2021 | Zero Hedge

Or, here’s your snippet: “Earlier today we explained why Morgan Stanley’s chief equity strategist Michael Wilson voiced concerns about the continuation of the “overcooked” equity rally, expecting a draw-down into year end for the simple reason that “both fiscal and now monetary policy have become reactive rather than proactive. For markets, that becomes the itch that needs to be scratched–i.e. market pressure is necessary and likely to get Congress and/or the Fed to act.”

And yet, once the coming period of volatility is over, Morgan Stanley sees the bull market continuing with the S&P expected to rise another 10% over the next 12 months.

Why? The answer is simple, and is the same one explaining the market’s rally over the past decade: the unprecedented liquidity injection by central banks since 2009.

As Morgan Stanley’s chief rates strategist Matthew Hornbach wrote in a note this morning, while conceding that “unforeseen obstacles to a buoyant risk environment will arise” he said that “current central bank policies are aimed at softening those blows, and will be effective at doing so.” Indeed, as Hornback predicts, “not only will central bank balance sheets continue to expand“, with the Morgan Stanley  strategist expecting G4 central bank balance sheets to hit just why of $30 trillion in two years, up from $25 trillion currently…

While it was once seen in poor form to assign a bullish thesis to central bank liquidity and intervention, those days are long gone as Hornbach shows:

“Central bank purchases of private sector assets (government bonds, corporate bonds, agency MBS) feature heavily in both types of liquidity injection. Exhibit 7 shows our monthly QE projections for the 8 central banks we think will be active in 2021.

We expect these 8 combined to remove US$304 billion of securities ($238 billion of which will be government bonds), on average, from private markets every month in 2021. Unsurprisingly, the Fed and the ECB will remove the most securities each month, in U.S. dollar terms.“

In total, these 8 central banks are expected to add liquidity worth 0.66% of annual nominal GDP, on average, every month in 2021. “That is a rapid pace of global liquidity injection, the likes of which we haven’t seen outside of 2020” Hornbach casually inserts.

While these are staggering numbers, consider that the IIF now sees total global debt rising from $277 trillion at the end of 2020 to a grotesque $360 trillion by 2030, over $85 trillion from current levels.”

Chuck again… This is crazy folks… The Central Bank is the defacto-buyer of last resort for the stock jockeys… Who’d a thunk that could happen in our lifetimes?  And I think that the boys in the article are being too conservative with their thoughts on the Fed’s balance sheet… I would expect it to explode higher in 2021…  I’m just saying…

Market  Prices 11/25/20: American Style: A$ .7346,  kiwi .6965, C$ .7663, euro 1.1887, sterling 1.3343, Swiss $1.0970, European Style: rand 15.2585, krone 8.8876, SEK 8.5320,  forint 303.67,  zloty 3.7681,   koruna 22.0350, RUB 75.78, yen 104.47, sing 1.3425, HKD 7.7510, INR 73.85, China 6.5843, peso 20.05, BRL 5.4123,  Dollar Index 92.22,  Oil $45.15,  10-year .85%, Silver $23.49, Platinum $964.00, Palladium $2,356.00, and Gold… 1,815.10

That’s it for today… Whew, counting Monday’s long Pfennig, and today’s Long Pfennig, there’s enough reading there for everyone to take home and read through the weekend!  That’s your Thanksgiving break assignment, should you choose to accept it! HA!  The powers that be, sure are keeping the “fear factor” high with us right now… As I explained to my kids, they have to keep the “fear factor” up to maintain their control…  I can’t wait to see the video of Tom Woods telling 100 state legislators his thoughts on lockdowns, masks, etc.  I sure hope you get to enjoy a very blessed Thanksgiving, and don’t eat too much!  But if you do, that’s what an afternoon nap is for! I always enjoy a turkey sandwich at night… Well, our crowd has been whittled down, to just the 12 of the Butler family for dinner… UGH!.. One of these days, I’m going to sit everyone down and explain to them the risks they take every day… But that’s for another day… I’m still on the smooth jazz Christmas station on Pandora, so the song that takes us to the finish line today, is a jazzy rendition of O Christmas Tree…   I hope you have a Wonderful Wednesday, and Tub Thumpin’ Thanksgiving tomorrow, and rest of the week, and please remember to Be Good To Yourself!

Chuck Butler

November 23, 2020 

* Dollar gets sold, along with Gold… 

* It’s a long one today, so fill your coffee cup! 

Good Day… And a Marvelous Monday to you! This will be a very shortened week for Pfennigs, as tomorrow I’ll be at the hospital for my quarterly scans at this 6:30 am… I know, you’re saying, “how lucky you are to be the first in the CT scanner!”  I have to say, that I wish I had never needed to be scanned!  But I have 100’s of times now in the past 13.5 years of dealing with this awful disease.. I’ve had bone scans, where they pump nuclear stuff into my blood stream… MRI’s of my head a couple of times (they didn’t find anything! HA!) And hundreds of other tests… If I could have done something in my younger life to prevent me from getting cancer, I would have certainly done that… But when you’re a young man, you think your Super Man, and nothing will destroy your body… Boy, do I know differently about that now! OK… enough of that! I have on my Smooth Jazz Christmas station that’s on Pandora, and The Ramsey Lewis Trio greets me this morning with their really jazzy version of: Here Comes Santa Claus…  (this version gets me moving in my chair for sure!)

Yes, it’s that time of year again… My most disliked month is nearly over, and one of my fave months will soon be here.. December…  Soon the houses will be lit up with colorful lights, and you’ll see freshly cut trees on the tops of automobiles.  And people will be much nicer to each other this time of year, which always brings a smile to my face, for sure!   So, let’s hurry up and get November out of the way!

I want to start today’s discussion about the markets I cover, by talking about Gold…  It came across my screen on Thursday last week that Gold has taken a plunge below $1.870 seven times since first crossing it on the way up to $2,000, back in August, and each time it has been taken below $1,870 by the price manipulators, it has rebounded, and moved higher… And that happened again last week… At one point on Thursday, Gold had been taken down to $1,852, but came back during the day on Thursday to close at $1,866, and on Friday, it moved the rest of the way past $1,870… 

Do you remember what it was like back before the plandemic, and Gold couldn’t get past $1,350?  And then one day it did, and there was no looking back?  History will repeat itself again folks…  I’m just saying..  Oh, and one more thing to think about… as I attempt to fair… December is historically a bad month for Gold, and people’s minds are taken away from the things that make Gold so “buyable”…  So, if we see weakness in Gold in December… It’s just its normal thang!”

So, on Friday, last week, the currencies came back against the dollar bugs, and saw some very range bound rallied across the board…  There was some news on the euro on Friday, that I feel compelled to tell you about…  And will in a minute, but first the rest of the recap from last Friday… The price of Oil rose, on the day to back above the $42 handle, and Treasuries rallied too…  Stocks lost ground again, and on a day when Pfizer announced that they would fine an emergency use authorization for their vaccine, which means it could be ready for dispersal next month… (Although Like I said last week, I doubt the mass injections won’t be done until spring)   Stocks sure have been acting strangely lately, I’m no stock jockey, but to me they appear to be out of gas…  I’m just saying…

In the overnight markets, the dollar has been sold at a greater pace, and the euro has climbed to 1.19 (we’ll see how long that lasts this time!). But news of another successful virus vaccine has got Gold & Silver on the run this morning, downward… Seems that the risk appetite is off, for now, and Gold has given back $3 to fall back below $1,870, which now makes that happening an 8th time…  

The price of Oil has shot higher on the vaccine news, and that has the Petrol Currencies looking better this morning, for sure! The Norwegian krone has moved back below 9.00, which is a good sight to see, and the Russian ruble is moving toward moving below 76…  

OK, The good folks at GATA sent me this link to an article on Bloomberg.com that talked about how euro was the most used currency in SWIFT, last month…  So, let’s get to the snippet of this article:

“The euro was the most used currency for global payments last month, the first time it has outpaced the dollar since February 2013.

Data from the Society for Worldwide Interbank Financial Telecommunications, which handles cross-border payment messages for more than 11,000 financial institutions in 200 countries, showed the European Union’s single currency and the greenback were followed by the British pound and the Japanese yen. The Canadian dollar overtook China’s yuan for the fifth spot, SWIFT said.

Trade upheaval, a pandemic-induced recession, and political disharmony renewed pressure to reduce the share of international payments in dollars. The U.S. currency has weakened more than 11% from its March peak, based on a Bloomberg index that measures it against a basket of major peers, and many observers are predicting its valuation to drop further. “

Chuck again… As I wrote about a month or so ago, foreigners are buying smaller amounts of U.S. debt, in the form of Treasuries, with Russia and China leading the drops… And now the dollar is being used less in SWIFT?  As I said in the last 10 days, the problems for the dollar are piling up, and the Hedge Funds, Pension funds, trading desks, etc. all have their fingers on the trigger of shooting holes in the strong dollar trend… 

Oh, and one more thought that I read on Friday… The Fed now owns more Treasuries (their value) than all foreigners combined…  Now tell me how this doesn’t end in a trail of tears… 

In other news from late last week: OK… this has got to be something that will turn into a Hatfields and McCoys feud… Treasury Sec. Mnuchin asked the Cartel, I mean the Fed, to return the unused funds that they were given to fund their various alphabet soup programs….  And the cartel, I mean the Fed didn’t like it one iota! They basically said, “The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”   WOW!  A pushback from the Cartel! I’m impressed at their gumption! Basically, they could have said, “we’ll review the facts, and get back to you.” And then never get back to the Treasury Sec. because soon he’ll be back to looking for a new job…  And everyone will have forgotten about the request… I’m just saying…

In addition, to that news, there was also news that President Trump announced that drug prices are going to be coming down… Boy that’s music to my ears, folks… I take so many drugs, and the costs of them even with insurance is pretty daunting when you add them all up for a year… And chemo drugs? For-get-a-bout-it!  Those are insane folks… I’m just saying…

And still the stocks couldn’t buy a bid… Hmmm…    Oh well, not my cup-o-tea, so we’ll move on now…

So, I was doing some shopping on Amazon the other day, and it suddenly occurred to me what was going on…  As I see this whole plandemic, it is being used to wean us off of using folding currency… I’ve been walking around with the same folding currency in my pocked for months now… I don’t go anywhere to spend cash, and whatever I buy is online, and with my credit card…  And I’m sure that most people are in the same boat as me… After this is all over, the government will probably say, something like: “ now that we’ve all gotten used to not spending folding currency, let’s just get rid of it and go to our new digital currency”…     Talk about a revolt! Or, maybe not, given how easily the Gov’t got everyone in the country to go home, shut down businesses, move on out to the country, wear masks, and stay away from family, including our parents in homes… 

I shake my head in amazement every day that I think about how easily all that was done… And the “controllers of the universe” are quite happy about how easily that was all done too…

Ok, I’ll take my tin foil hat off now…. But remember, I used to be told to do that when I talked about metals price manipulation, and look at how that became “conspiracy fact!” …  I’m just saying…

Good friend, Dennis Miller, of www.milleronthemoney.com sent me a couple of quotes from the Burning Platform site, and one of them really hit home with me, and so I told him I was going to use it on Monday, and wonders of wonders, I remembered to do just that” Check this out…

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – HENRY FORD

Man, if he was saying that all those years ago, imagine what he would think of our monetary and banking systems now?  It’s a real shame that most people in this country don’t know and lot of them don’t care to know about this stuff… To them, they know that payday is Friday…  And as long as the money shows up in their bank account, it matters not one iota to them how it got there, and how far it’s going to go, when it comes to spending it.

That’s why I wonder what’s happened to all those readers of this letter that I used to have…  The mail server would get bogged down at times, because of the number of email addresses the letter was getting sent to…  I know that some have passed on… ☹  But they haven’t all passed on!  I guess, they just didn’t want to know the truth about stuff any longer…

But rather than worry about those that have dropped the letter, I celebrate all those that have remained with me through the years…   in two years… 2022… it will be 30 years of writing the Pfennig… Can you believe that? I think that 30 years of doing something is long enough, don’t you? But who knows, maybe I’ll still feel like putting my thoughts on markets out there, and if all goes the way I said it was going to go, then I know for sure that I won’t want to talk about it any longer!

I had a special email late last week one that I’ll savor for a long time… My good friend, by nature of me sending him a fruit basket years ago, the Great Mogambo Guru, sent me a note with his, what he called, his last Mogambo letter…   So, it is with the highest esteem for him that I present this small snippet of his last Mogambo letter…  I say with a tear in my eye…

“And, now that you mention it, things are falling into ruination literally every “here, there and every-freaking-where,” which is not only unassailably true, but also classically poetic in an oddly lyrical way. 

Now you are sneering “Ozzy who? Poems? What is this idiot talking about?”

I’m talking about how the future is grim, and how to convince you to take action.  This time I am using a line from Thayer’s poem “Casey at the Bat.”  The line is “Upon that stricken multitude grim melancholy sat”, which is not only weirdly stilted, but here suffices as a springboard for me to turn it into something, as is my wont, truly immortal.

Thus, instead of my usual “We’re Freaking Doomed (WFD)!” and a breathless exhortation to buy gold and silver, I leave you with:

                        Mogambo At The Bat

Upon that stricken multitude grim melancholy sat,

Because they had no gold and silver to save their fat asses, and they regretted that.

And speaking of asses, those pants you wear make your butt look fat.

There is a vital message in there.  Maybe two.  Trust me. You’re welcome.”

Chuck again…  Classic Mogambo….   But please Mr. Mogambo Guru, don’t stop writing these missives, if it’s only to me, I’ll be sure to share them with everyone!

I’m running long today, but… these are important things to think about, and this next section is very important folks…  I took this from www.wallstreetonparade.com  And I would suggest that if you want to know more about what I’m about to put down here, then go there to read it…  Take it away Pam and Russ Martens!

“On March 27, 2020 President Trump signed the CARES Act emergency stimulus plan into law. That law instructed the Treasury Secretary to make $454 billion available to the Federal Reserve for emergency lending facilities. The funds were to make $10 of Fed emergency funding available for each $1 from the taxpayer. The taxpayers’ money was to be used as loss-absorbing capital. The $454 billion would have supported up to $4.54 trillion in lending by the Fed.

But according to the Fed’s H.4.1 balance sheet statements that are released weekly on Thursday afternoon, the Fed has only used the following amounts of money from the Treasury: $10 billion for the Commercial Paper Funding Facility; $37.5 billion for the Corporate Credit Facilities to buy up corporate bonds and Exchange Traded Funds; $37.5 billion for the Main Street Lending Facilities for loans to small and mid-size businesses; $17.5 billion for the Municipal Liquidity Facility that buys up municipal bonds; $10 billion for the Term Asset-Backed Securities Loan Facility; and $1.5 billion for the Money Market Mutual Fund Liquidity Facility which bailed out toxic waste in money market mutual funds to keep them from breaking a buck. All of this adds up to just $114 billion out of the $454 billion that Congress allocated.

Wall Street On Parade has been repeatedly asking for an explanation as to what has happened to the balance of $340 billion that Congress intended to be used to help American families and businesses during the worst economic downturn since the Great Depression.”

Chuck again… Where’s the beef? Or where’s the money? Or, how in the hell did we get in this position in the first place? Oh, that’s right deficits didn’t matter…. 

The U.S. Data Cupboard this week is stacked on Wednesday, as they shove everything into one day’s data prints… Durable & Capital Goods Orders, Personal Income & Spending, and the usual Weekly Initial Jobless Claims, and everything else under the sun and moon!  This is all planned, folks… You see most of us will be either traveling (against CDC recommendations!), or getting things ready for our family Thanksgivings…  So, we won’t be paying attention to any financial news… And then that’s it for the week, as there will be no data prints on Friday…. 

To recap… The currencies and metals were OK, not great, but OK on Thursday & Friday last week, and overnight has brought the dollar selling to the currencies, and Gold selling in the metals… Seems that all the news this morning is about how risk appetite has gone away…  I don’t see how that works, for me, as there are still major problems going on around the world, but it is what it is…  

For What It’s Worth… I feel as though I’ve had about 3 FWIW things to talk about today, and don’t know how much one reader can absorb in a setting! But here’s something to whet your whistle… I took this from Ed Steer’s letter from Saturday, and it caught my attention only for the historical stuff in it that I will highlight below. It’s about taxation, and it can be found in its entirety here: https://internationalman.com/articles/the-greatest-swindle-in-american-history-and-how-they-will-try-it-again-soon/

Or, here’s your snippet: “International Man: Before 1913 there was no income tax, and the United States was a much freer country. Initially, the government sold the federal income tax to the American people as something only the rich would have to pay.

Jeff Thomas: Yes, exactly. It always begins this way. The average person is always happy to see the rich taken down a peg, so this makes the introduction of the concept of theft by the government more palatable. Once people have gotten used to the concept and accept it as being perfectly reasonable, then it’s time to begin to drop the bar as to who “the rich” are. Ultimately, the middle class are always the real target.

International Man: The top bracket in 1913 kicked in at $500,000 (equivalent to around $12 million today), and the tax rate for it was only 7%. The government taxed those making up to $20,000 (equivalent to around $475,000 today) at only 1% – that’s one percent.

Jeff Thomas: Any good politician understands that you begin with the thin end of the wedge, then expand upon that as soon as you feel you can get away with it. The speed at which the tax rises is commensurate with the level of tolerance of the people. And in different eras, the same nation may have a different mindset. The more domination a people have come to accept from their government, the faster the pillaging can be expanded.

As an example, the Stamp Tax that King George III placed upon the American colonies in the eighteenth century was very small indeed – less than two percent – but the colonists were very independent people, asking little from the king in the way of assistance, and instead, relying upon themselves for their well-being. Such self-reliant people tend to be very touchy as regards confiscations by governments, and even two percent was more than they would tolerate.

By comparison, if today, say, Texas were to eliminate all state taxation and allow only two percent in federal taxation, Washington would come down on them like a ton of bricks, saying they were attempting to become a “tax haven.” They’d be accused of money laundering and aiding terrorism and might well be cut out of the SWIFT system. The federal government would shut down the state government if necessary, but diminished tax would not be tolerated.”

Chuck again… Yes, taxes… I find them overbearing, and too costly for the average person… And then to think of what is done with my tax dollars, really gets me riled up to no end!  I used to say, when I didn’t make enough to even talk about in the way of wages, that I would gladly pay the taxes on a higher wage… But then when my wages did go higher, I was like, “I wish I hadn’t said that, because this is ridiculous!”

Market Prices 11/23/20: American Style: A$ .7331,  kiwi .6965, C$ .7663, euro 1.1901, sterling 1.3388, Swiss $1.1013, European Style: rand 15.3118, krone 8.9807, SEK 8.5837, forint 302.67,  zloty 3.7570,    koruna 22.0815, RUB 76.17, yen 103.72, sing 1.3405, HKD 7.7519, INR 73.96, China 6.5576, peso 19.99,  BRL 5.3786,  Dollar Index 92.02,  Oil $42.97,  10-year .85%, Silver $24.12, Platinum $944.00, Palladium $2,354.00, and Gold… $1.868.30

That’s it for today… I’ll make this really short, because I’ve gone on way too long today… I had a lot of time this weekend to read, and see what happens when that occurs? Congrats to my beloved Mizzou Tigers on their win at S. Carolina Saturday night. What’s with that awful rooster sound they play there? That was so annoying, I almost turned the game off!  I go to the wound center this afternoon, scans tomorrow, and then a break for a few days… I’m trying like hell to lose weight, I know, bad time of the year for that, but… my doctor is very upset and so I’ll do what I can… No salt, no sugar, no beer, what the heck! What’s the point of living? I’m just kidding…  I can’t get enough of the smooth jazz Christmas station on Pandora… And right now they are playing my fave song they play… The Charlie Brown theme song…  I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

 

 

 

 

November 19, 2020

* Dollar bugs fight back, but not by much… 

* Chuck goes on and on like the Energizer Bunny today… 

Good Day… And a Tub Thumpin’ Thursday to you! Well, the conversations around the house sure have picked up, with all the things that need to get done before the closing and Alex’s move-in to his newly purchase home.  Next Thursday is Thanksgiving… I have come 180 degrees through the years, on how I view Thanksgiving. I used to dislike the run-up to T-Day, because, I would say that it’s the only time of the year that Kathy and I argue. We would argue about which family we would eat T-Day dinner with… We tried alternating years, etc. But it would always lead to arguments. Then my parents died, and I said that from then on T-Day would be at our house, if people wanted to see us, then they will come to our house, and that’s how it’s been now for 23 years…  I simply love a houseful of people or a backyard full of people… So, I’m all into T-Day now… And then along came COVID, and people telling me that I should cancel T-Day… To that I say bullocks! So, we’ll see how that goes next Thursday… I’m getting pumped up, right from the get-go today as AC/DC greets me this morning with their song:  Rock And Roll Ain’t Noise Pollution…

OK, I’m shaking in my seat, and raring to go, so let’s go! Oh, that’s right, it was another of those days where we saw drifting in the currencies nearly all day with a slight downward movement at the end of the day… And Gold which was down $6.90 in the early trading, was never able to overcome that downward move in the trading during the day, and ended the day down $8.50, at $1,872.50, and Silver followed suit, closing down 16-cents, to $24.41…   There was no real economic data to speak of yesterday, and therefore no impetus to move one way or the other for traders…

In the overnight markets… It’s starting as if this is going to be another of those days when Gold holders will need to put their blinders on, and ignore the price engineered takedown, as Gold is down $17.70, as I write… And it’s not dollar strength causing this move, it’s all about sellers…  Why?  Because the price manipulators felt like it would be one of those days, that’s why… At least that’s how I see it… When the predominate mover is sellers, I have to think that moves like this can be attributed to the price manipulators…  

In our daily check of the Dollar Index, the dollar bugs have fought back a bit as the Dollar Index this morning is 92.58, up from the 92.34 of the last two  days.. but the euro remains above 1.18, so the dollar is still on the chopping block, just not getting chopped right now, but in my opinion, that’s just the butcher taking a break… 

I had a reader go all bonkers on me yesterday, and accuse me backing the calls for fraud in the election… I said, “How one earth did you get that from, my statements that, “the election is sill undecided and will be until the courts decide”?    I will tell you that from what I’ve seen there sure seems to be some shenanigans played with the voting, but I did never mention that until now… UGH! The Book I just read: The Madness of Crowds, explains the mindset of the reader to a “T”… I should have been prepared to not even reply… But that’s not my nature… And so we go on despite my short comings…

I was very disheartened yesterday to hear the the nomination of Judy Shelton to the Fed Governors was defeated 50-47…  Our old friend, (NOT), Mitt Romney, voted no… Thanks for holding the line there Mitt…  Ok, the way I understand this, is that McConnel voted no so that he can bring the vote up again when the Senate has a full accounting of voters, as a couple of Sens. Were at home isolating…  and couldn’t make the vote… So, with some gamesmanship and working the system, there will be another go at this nomination again in the near future…

I really thought that this shoot from the hip mindset that the Cartel, I mean the Fed has would be given a kick in the shins by Shelton… But maybe the Senators don’t want that. That they see things just peachy dandy with the cartel, I mean Fed. And that’s the problem as I see it folks…  Congress is in cahoots with the Cartel, I mean the Fed, (one of these days I’ll stop that, I promise) And that makes me sick to my stomach thinking about this mess we’re in… The Cartel, I mean the Fed is NOT the independent Central Bank that they would have you believe themselves to be…   They are more the “money man” facilitator for Congress… I’m just saying…

Well, I’m off to a good start here today, eh? So, let’s get into some more good stuff that’s going on, OK, with you? I thought so…  Well, according to Reuters, “Global debt is expected to soar to a record $277 trillion by the end of the year as governments and companies continue to spend in response to the COVID-19 pandemic, the Institute of International Finance said in a report on Wednesday.”

Developed markets’ overall debt jumped to 432% of GDP in the third quarter, from a ratio of about 380% at the end of 2019…  That’s crazy stuff folks… 432% of GDP?  The U.S’s portion of that $277 Trillion is $80 Trillion, and that’s not counting Unfunded Liabilities which are $155 Trillion…  How in the world will all this debt get repaid you may be asking…  Well, at least I’m asking… And I know the answer, I’ve told you all a couple of months ago, right here in the Pfennig…  I told you that there’s going to be big defaults on debt all over the world, sans Russia where debt is miniscule. And that’s going to bring each country’s currency to its knees, while Gold soars… 

In my last trip to Vancouver about 5 years ago, I gave a presentation on my usual stuff Debt, Debt and more Debt, and at that time the U.S.’s Total debt was $50 Trillion (not counting unfunded liabilities) So, we as a country have grown $30 Trillion in less than 5 years…  And back then I used to tell people that economist Lawrence Kotlikoff was quoted as saying the U.S.’s real debt was more than $200 Trillion… I haven’t heard from Mr. Kotlikoff in some time, I wonder what he thinks of all this debt these days?  I just had a smile come across my face, thinking about my last trip to Vancouver, when I had the crowd singing Trini Lopez’s song: Lemon Tree…  My colleague at the show, Suzanne Lee, recorded the event on her phone, and played it back for the big Boss, Frank Trotter, when we returned and he got the biggest laugh out it…

I miss going to Conferences/ Shows with my colleague, Suzanne Lee… She moved on to another place of business a couple of years ago, and I wrote a glowing review for her new employer…  Chris Gaffney used to accompany me on quite a few of those trips, but most of the Agora, International Living, Sovereign Society things I was on my own…  I would leave out someone if I began to list all the help I had at the Conferences, so I’ll leave that there… But a great big hug and thank you to everyone!

My publishers, the Aden Sisters, Mary Anne and Pamela were doing a virtual presentation for the virtual Money Show on Tuesday, and I put it in my calendar to watch it, and then fell asleep and missed it! (don’t tell them I missed it! HA!)  I’m sure there will be a chance to view it again later… There title was GOLD HAS A BRIGHT FUTURE, AND SILVER EVEN MORE…   When I see the link I’ll be sure to include it in the letter, for sure!

Today, we’ll see the latest Weekly Initial Jobless Claims for last week, when they held above the 700,000 level at 709,000…  The data just printed and it showed what I was expecting… a rise to 742,000 last week, as the lockdowns began again… Next week’s print will be on Wednesday, and should show more rot on the vine, in my opinion…  and then the following week will be a mess with the T-Day holiday in the middle of the week, the numbers will be skewed, but just keep in that in mind when the time comes. I’m sure I’ll remind everyone but then one never knows, where I’ll be, right?   

The Continuing Claims fell last week to 20.63 Million from 21.16, which still figures to be an Unemployment Rate of 13.5%, which is still a mountain top away from where we were before the plandemic…   And the thing to keep in mind with the Continuing Claims is that the drop is probably not people going back to work, rather , it’s more due to people’s unemployment benefits running out, and they are dropped from the list, which makes about as much sense as shoveling deep snow when you’re 80…  But that’s the games that people play, every night and every day, never saying what they mean, never meaning what they say…  (Joe South)

Yesterday, Fed NY President Williams spoke, and got the markets all lathered up, by saying, “full recovery could come earlier than the 3 years he projected just a couple months earlier due to progress on the vaccine.”  OK, can we all just calm down just a tad about the vaccine? The distribution of the vaccine is not really going to take place until spring 2021, Yes, some will get it before then, but the masses won’t until spring of 2021… And that’s at the earliest!  So, can we just push back on all the excitement about the vaccine, until it gets distributed and we see if it actually works? 

Did you know that the Pfizer version of the vaccine needs to be refrigerated at minus 70 degrees Celsius, which is colder than winter in Antarctica. Moderna has said that its vaccine needs to be frozen too, but only at minus 20 Celsius, more like a regular freezer.  To me that requirement makes distribution of the vaccine a logistical nightmare…  I’m just saying…

Don’t get me wrong, I’m all for how these companies went to bat and in 9 months they came up with a solution, one that obviously will be tweaked going forward, but I have a question for these drug companies… 9 months to come up with a solution for a virus, and over 100 years of no solution for combating cancer… other than treatments that allow a cancer patient to live longer, but no cure… Yes, I understand that cancer is a whole different pile of beans, but… 100 years? Come on…

As I understand cancer research, in Nazi Germany, Hitler had a doctor that figured out the cause of Cancer, and was on his way to coming up with a cure, when the collapse of Nazi Germany took place… I’ve read the notes and he was onto something for sure!

Wow! That was some tangent I just went through… sorry, but the next thing I consciously  knew I was typing was this…   James Taylor is singing: Shower The People You Love, as I type this morning, and I couldn’t agree with him more!  I try to do that daily… But sometimes “life” gets in the way…

To recap, Wednesday was another day of drifting for the currencies and they didn’t actually move (downward) until the end of the day… Must have been some dollar buying that caught the markets by surprise… The PPT? probably… We certainly couldn’t have quiet markets for more than 2 day could we?  Oh well, the slippage was small in the currencies and in Gold which lost $760 on the day, and Silver which lost 16-cents on the day.   Chuck talks about all the hoopla regarding the virus vaccine, and asks the question where has all this rush to get a solution been for cancer the last 100 years?

For What It’s Worth… I really don’t have anything new for you today… So, I thought, what the heck… let’s go back in time… dodododododod, (that’s time machine sounds!) And what do we have here?  it’s a snippet of what I talked about on May 18th… of this year, and it can be found here: 

Or, here’s your snippet, no reason to reread the whole May 18th Pfennig! I said on that day: “Global debt is at levels that it should never have reached in a million years, but it’s there, and there’s no paying back, in the traditional sense of paying off a debt…. So, how are the countries around the world (except Russia, who’s debt IS manageable) going to deal with this ever-growing debt? I’ve thought long and hard about this folks, and in my heart of hearts, I know what the answer is, and I’ve fought saying it, for so long, because, well, I just didn’t want to believe it could happen…. And it’s not just because of the virus that this is the way it is… At the end of 2019, Global Debt stood at $255 Trillion… Once the dust settles on all the debt accumulated during the economic shutdowns, the Global debt will be greater than $300 Trillion… With no ability to pay it down….

A month or so, I talked about the IMF’s SDR’s (special Drawing Rights), and how they used by Central Banks, and not suitable for individual use…. I almost went down the rabbit hole then that I’m ready to go down now….

I truly feel that with all this debt, and Central Banks going nuts with one alphabet plan after another, that they’ve all backed themselves into a corner… 

To me, it seems, the only way out of this debt mess is for countries, including the U.S. to take haircuts, in other words, default on some of their debt…. What this will do, is have every trader in the book, out to sell the currency of a country taking the haircut, and buy the currency of a country that hasn’t announced they would be taking a haircut. But soon, they will all have announced it, and at that point is when I believe currencies, as we know them today, will no longer be…

I thought I would be long gone by the time this all unfolded, for it’s been in the cards for years. I never would have thought that during my time on earth, that would see these kinds of debt levels… I always thought that somewhere, someone with their head screwed on right, would figure out that we kept accumulating debt, that a default had to come eventually… I always figured, Japan was first, then Greece, then the U.S. But instead, what I view happening is there would be a meeting of finance ministers where the coordinated announcement was made….”

Chuck again… what a day that was… I scared people half to death, judging from the responses in the Pfennig Replies box…  And there’s nothing in the last 6 months that would change my thoughts! 

Market Prices 11/19/20: American Style: A$.7261,  kiwi .6888, C$ .7625, euro 1.1830, sterling 1.3220, Swiss $1.0960, European Style: rand 15.5425, krone 9.0555, SEK 8.6373,  forint 304.97,  zloty 3.7830,  koruna 22.2975, RUB 75.96, yen 104.05, sing 1.3467, HKD 7.7529, INR 74.13, China 6.5541, peso 20.33,  BRL 5.3258,  Dollar Index 92.58,  Oil $41.60,  10-year .85%, Silver $23.88, Platinum $943.00, Palladium $2,319.00, and Gold… $1,853.10

That’s it for today…  And I’ve got some appt news for you to digest… Next Tuesday there will be no Pfennig as I will be at the hospital for my quarterly scans… (I wonder if they cancel those scans?) So, a Pfennig On Monday and Wednesday next week, that’s it! So, what are your plans for Thanksgiving? Will you be rogue and have a normal T-Day? I will, you can be sure of that! I have a tele doctor visit later this morning… I had just seen him last week in his office, but I received word that he wanted to talk to me about something… Uh-Oh! He wouldn’t tell me over Zoom that he found something would he? Nah… I don’t even want to think about that, so maybe he just wants to follow up with my sugar counts…  which by the way are dropping like a rock, which is a  od thing, because as I told you I don’t want to be a diabetic!  Ok, good luck to my beloved Missouri Tigers this Saturday… They only have 64 players for the game, and the min. they can have is 53, so they are cutting it close…  Well, I’m being rocked out this morning, as Humble Pie takes us to the finish line today with their song: I Don’t Need No Doctor…  A young Peter Frampton played guitar for Humble Pie…  I hope you have a Tub Thumpin’ Thursday, a Fantastico Friday tomorrow, and get ready for T-Day!  And please Be Good To Yourself!

Chuck Butler

November 18, 2020

* Currencies & metals trade in a basic nothing day…

* Powell can’t wait to print more currency… 

Good Day… And a Manfred the Wonder Dog Wednesday to you! I was watching a clip on the news last night, where people that were minding their own business eating outside at a restaurant, had fireworks thrown at them by the violent mobs we keep hearing are not violent… But they are, we all know that for a fact… I thought to myself, in my younger days I would have confronted them and got a lick in before they got me… Daring, Challenging, and too high strung to save myself… But I sure wouldn’t have just stood by and allowed a mob to disrupt my dinner, and endanger my health, and that of my wife’s…   But not any longer, not since June 2007…  And I had better stop there… Mike and the Mechanics, featuring Paul Carrack, greet me this morning with their song: Silent Running…

I’m going to start today’s letter with a note from the Wall Street Journal (WSJ) here goes… “About 300 companies that received as much as half a billion dollars in pandemic-related government loans have filed for bankruptcy, according to a Wall Street Journal analysis of government data and court filings.”

Well, those were funds well spent, now weren’t they? And to add to the fun and games, the WSJ goes on to explain that there are probably lots more of bankruptcies because the progam they only analyzed the Big Borrowers of the program… And also because when small businesses go bankrupt, they liquidate, they don’t file for bankruptcy…

Now, wouldn’t it have done the business and the tax payers good to just allow the business to fail in the first place?  Remember when I talked about zombie Corporations? Well, I would bet a shiny quarter that these were all zombie corporations…   

OK, well there wasn’t much trading that went on yesterday… The currencies slipped a bit, ever-so-slightly, on the day, and Gold held to its $2 early loss, most of the day, until right at the end of the trading day, when it closed down $8.60 to $1,881.00, and Silver lost 27-cents to $24.57…  Stocks lost ground yesterday, Oil lost about ½-cent, and Bonds, well, bonds rallied but not by much…  So, really, there was no conviction from any of the traders yesterday to do something rash… or bold… 

I used to play a game on the trade desk on days like yesterday, and would say, “OK, we’re going to have a trade-a-thon, everyone raise your hand until your phone lights up”   I had a million of those kinds of tricks up my sleeve for dull days… From 2001 to 2015, there weren’t many of those dull days, instead no one had time to raise their hands before answering another call..  From 2015, on I can’t say what happened because I really wasn’t there any longer… no on the trade desk any way… And now the trade desk is no more… Everyone has been sent home to work from home… No comradery, no fun times just being together…

In the overnight markets,  There was more drifting in the currencies overnight, but Gold has lost $6.90 as I write in the early trading, and silver is down 11-cents.  I checked Ed Steer’s letter this morning quickly to make sure I had my facts straight about Gold & Silver, and lo and behold he thought it was a basically a “nothing day” yesterday too!  

The Dollar Index this morning is sitting at 92.34, the same level as yesterday morning, just goes to prove what I said about yesterday’s trading to be bang on, eh? 

I had a dear reader send me a note about the Russian ruble, she pointed out that the price of Oil has risen since spring, and there’s been no positive movement in the ruble…  Yes, that’s true, I responded… But the economic sanctions remain, dragging the Russian economy through the mud. That, and the COVID hasn’t done Russia any favors…  You know in the beginning when they said that alcohol would kill the virus, I thought shoot with all the vodka they drink in Russia, their bodies should be immune to the virus! HA!  Well that was wrong…  I still believe in the Russian ruble, and its ability to get stronger…  If we could only get the U.S. and EU to drop those darn sanctions…

Speaking of the price of Oil… for the first time in a week, the price of Oil has climbed higher in the past 24 hours, and trades this morning with a $42 handle…  There certainly seems to be a line in the sand drawn on the price of Oil too, much like the euro… I’m just saying… 

After a couple of days last week where the Japanese yen weakened VS the dollar, the yen has rebounded nicely… I’ll point out my thought that the major currencies/ offsets to the dollar rally when the dollar gets sold… Euros, yen, francs, sterling and throw in the A$, have all moved upward VS the dollar in the last week…

And the best performing currency overnight has been the New Zealand dollar/ kiwi…  Kiwi crossed the 69-cent level overnight… And that news got me thinking about how in the last week dollar trend 2002-2012, the best performing currency was kiwi… 

Ok… I’ve been dissing negative interest rates for some time now, and I don’t think the Central Bankers of the world give two hoots…  Except for one that has spoke out against Negative Interest Rate Policy (NIRP). I found this on Twitter yesterday, and Peter Boockvar posted it… “Polish CB comment “NIRP economically unjustified & bad for  financial system stability…could even be questionable in light of constitution & CB charter” 

And then Peter said, “I’d like to get this guy in a room with Draghi and Kuroda for a debate”… 

Chuck again… Yeah, I would pay good money to see that !

This’ll be the day that the Tech giant CEO’s go to the Hill and will be asked questions about censoring discussions and banning people for their political bias…   Missouri’s Senator Josh Hawley, said that he had info from a Facebook whistle blower, and will be not throwing softballs to the Tech Giant CEO’s that include Google, Facebook and Twitter…   Come on Josh, be a big man and put these guys in their places!

Mike, Mike, Mike, what day is it? It’s Huuuummmpp Day!  Man that’s still my fave GEICO commercial of all time…  And it is Hump Day! Whenever I get to Hump Day, I think of that commercial, and how when Mike Meyer would walk into the office, on Wednesday, I would say, “Mike, Mike, Mike What day is it? HAHAHAHAHA!

Yesterday’s U.S. Data Cupboard didn’t have anything to write home about, or get the dollar bugs all lathered up…  Rocktober Retail Sales only grew 0.3% VS 1.6% in Sept. So that data played out just like I thought it would thanks to the BHI!  Rocktober Industrial Production rebounded in the month growing 1.1% VS the negative -.4% in September… And Capacity Utilization is a real head scratcher to me as it grew to 72.8%, from 72.00%…  I just don’t see Companies making Capital expenditures (CAPEX) with all the questions regarding new lockdowns coming down the pike, do you? 

In a talk to a business group in San Francisco, Powell said “Congress’ tax and spending powers can directly target income support for groups that really need it, in a way that the central bank cannot.

“There hasn’t been a bigger need for it in a long time,” Powell said.

So, Powell is still banging the drum for more stimulus…  I think he just needs to be patient, for more is coming, just wait until the new year… do worry Jerome, keep your pants on! You’ll get your chance to print more currency  in due time…

Today’s Data Cupboard just has a couple of housing data prints to offer for viewing… But there will also be 4 different cartel, I mean Fed Head speakers on the circuit today… Bullard, Williams, Kaplan and Bostic will all be out begging for more stimulus today… Hey! I just had a thought! These Cartel, I mean Fed Heads could be the new Salvation Army bell ringers!  Now, I’m going to be thinking that it’s James Bullard ringing the bell when I go to the grocery store!  No wait, I don’t go to the grocery store or inside the grocery store any longer, so when will I see a bell ringer this year?

To recap… it was a kind of nothing day for the most part yesterday, with no convictions being taken by traders… The currencies slipped a bit, Gold lost $8 on the day, but most of that loss came at the end of the trading day.. Stocks lost some ground as the virus vaccine news from the weekend faded into the background. Oil slipped by 50-cents, and bonds rallied a bit…   Chuck talks about the Russian ruble, and begins the day with a ditty about how the zombie corps that took money are still filing bankruptcy…

For What It’s Worth…  I’ve showered praise for the work that Pam and Russ Martens do on their website: www. Wallstreetonparade.com  previously, so I won’t get into that again. I just want to point out that they carry the best news on the inner workings of the markets than anyone… And today’s article has their accounting of a Congressional hearing last week with Fed Head Quarles, and it can be found here: https://wallstreetonparade.com/2020/11/congresswoman-katie-porter-tells-the-fed-that-its-got-a-big-problem/

Or, here’s your snippet: “Last Thursday, during the House Financial Services Committee hearing with federal regulators of banks, Congresswoman Katie Porter of California told the Vice Chairman for Supervision of the Federal Reserve, Randal Quarles, that the Fed has a “big problem.” Porter has a Harvard Law degree and was previously a law professor at the University of California Irvine School of Law. If Porter believes the Fed has a legal problem, it is highly likely it does.

Here’s how the exchange between Porter and Quarles went:

Porter: “The Fed is largely responsible for dispensing the $500 billion Congress provided as a bailout for corporate America – the biggest bailout in our country’s history, potentially. Using taxpayer dollars to buy bank debt was never part of that plan. In fact, the Federal Reserve stated explicitly in this document [holds up document] that it would not be purchasing bank debt. What happened?”

Quarles says he doesn’t know what document Porter is holding up. Porter says it’s the Fed’s own “Frequently Asked Questions” on the terms of their corporate bond buying program, which specifically states that the Fed will not be buying the bonds of any “insured depository institution,” i.e., a bank. Here is a link to that document.

Quarles: “I understand the question. We haven’t bought bank debt in those facilities.”

Porter: “What’s an Exchange Traded Fund, Mr. Quarles?”

Quarles: “As I was getting ready to say. We have purchased Exchange Traded Funds at the very beginning of the process in order to jumpstart the reignition of the economy and we stopped purchasing Exchange Traded Funds several months ago.”

Porter: “Exchange Traded Funds, for everyone who is watching, those are just baskets of stocks [or corporate bonds] issued by a variety of companies. And, is it not correct that the Fed bought $1.3 billion in ETFs.”

Quarles: “That number sounds right.”

Chuck again…  Man she really nailed Quarles to the floor with her questioning…  As Pam Martens said in the letter, “Its nice to see the Fed in the crosshairs of a legal pro.” So, if you get the chance read the rest at the link above, to get the “rest of the story” ala Paul Harvey…

Market Prices 11/18/20: American Style: A$ .7315,  kiwi .6922, C$ .7650, euro 1.1867, sterling 1.3278, Swiss $1.0976, European Style: rand 15.4025, krone 9.0264, SEK 8.6043, forint 303.45,   zloty 3.7678,   koruna 22.2380, RUB 76.31, yen 103.90, sing 1.3410, HKD 7.7523, INR 74.10, China 6.5604, peso 20.24,  BRL 5.3852,  Dollar Index 92.34,  Oil $42.31,  10-year .85%, Silver $24.46, Platinum $932.00, Palladium $2,360.00, and Gold.. $1,874.10

That’s it for today… Thanks for all the notes I received yesterday on the news that youngest son Alex just bought a house…  I guess my ramblings about fatherly advice, hit home with a lot of people…  It was a nice sunny day yesterday, but pretty chilly, so I couldn’t go outside to read… UGH!  At the end of December when I head south for the winter, I’ll be able to go outside to read nearly every day!  When I was a young man, in school, I never enjoyed reading, and did just enough of it to get good grades, but when I began my career in the foreign bond trading arena, I had to read a lot of research, and that led to newspapers, and books…  the poor newspaper business… My wife cancelled my paper delivery last year, and that broke my heart… Now I have to go online and fish out what I want to read, it’s just not the same… UGH!   The Byrds take us to the finish line today with their song: Eight Miles High…  A classic 60’s song, and featured Roger McGuinn and David Crosby… I hope you have a Manfred the Wonder Dog Day Wednesday, and will Be Good To Yourself!

Chuck Butler

November 17, 2020

* the dollar continues to weaken, albeit very slowly… 

* What’s up with the 10-year Treasury’s yield? 

Good Day… And a Tom Terrific Tuesday to you! I totally forgot to mention this yesterday.. Over the weekend we learned that youngest son, Alex, learned that his offer on a house, had been accepted (I told him that meant he offered too much! HA!) and he will soon be a Home Care person… He said, you mean home owner? I said, no the bank is the owner, you just take care of the home until the loan is paid off, then you become a home owner…   He was not pleased with that… I told him most people would call him a home owner, so just go with that! I opened Pandora’s Box of replies yesterday, when I said that the election hadn’t been officially declared yet… Well, I now know who they voted for!  America greets me this morning with their song: Sister Golden Hair… 

On a side note, on Saturday, when Evie and Braden were here, I noticed that Evie was finally beginning to grow some hair, and it looked blonde to me, so I called her Blondie… Braden then said, “do they call you nothing, because you have no hair? We laughed and laughed at that…

OK… Yesterday, I told you that Gold was down $12 in the early trading… But soon after hitting “send” the reversal began, and with each hour that passed, Gold gained a little more, and a little more, until by noon the shiny metal has recovered the $12 loss in early trading, and was flat for the day!  Good Show! For the day, Gold ended down 60-cents, acting and trading much like its little brother, Silver, who gained 9-cents on the day… Gold closed at $1,889.60, and Silver at $24.84…   I would think that Gold’s recovery yesterday, saw a lot of people buying at a bargain price… And others? Well, they’re just now getting in on the best investment since 2000….

Speaking of Gold… The good folks at GATA sent me this quote from Egon Von Greyerz, so here goes: “The ETF market is primarily a paper market or at best a market which consists of gold leased from central banks. When there is major buying of the biggest gold ETF, GLD, the Swiss refiners seldom see an increase in sales. Instead the bullion banks are lending central bank gold to the ETF. For that reason, anyone who buys gold for wealth preservation should never buy a gold ETF but real physical gold.”

This is one of the reasons that I’ve always said that physical Gold is the way to own Gold… But if you just want to own the “price” like a commodity, then the ETF is for you…  Just not for me! 

I’ve explained this many times in the past, but here I go again… In the East, Gold is bought as wealth preservation, or a storage of Wealth, if you will… In the west, Gold is bought & Sold as a commodity, and therefore you see swings in price… Until people in the U.S. mostly, begin to view Gold as a storage of wealth, you’ll continue to see swings in prices that get you all lathered up and make you want to sell…  I’m just saying…

And the Dollar Index, which yesterday morning was 92.76 ended the day at 92.47, and you all know what that means, right? That the currencies, for the most part, rallied VS the dollar yesterday… The euro headed higher within the 1.18 handle, and the Aussie dollar (A$) climbed back above 73-cents! The price of Oil slid by about 50-cents on the day, and gave the Petrol Currencies no reason to rally… The reason I mentioned us keeping track of the Dollar Index this week, is that I firmly believe that we are going to see further rot on the dollar’s vine going forward…  Sure, the PPT is always out there lurking, but as long as the downward move is slow, then I think the PPT will stay on the sidelines…

The dollar is like the frog in the pot of water… If you drop the frog into boiling water, he’ll jump out, but if you slowly turn the heat up to boiling, he’ll never notice until it’s too late…   So, currency traders who have had a yen to sell dollars for months now, will be prudent to keep the heat on the dollar slowing rising… 

And this morning, in our daily check-in on the Dollar Index, it has fallen further and sits at 92.34, this morning…  Still weakening, albeit slowly… 

In the overnight and early trading markets we have the currencies maintaining their moves against the dollar, with a little more upward movement. Gold is down $1.90 and Silver is down 17-cents this morning, but yesterday’s price action tells us that those downward moves could turn positive at any time!  

OK, last week I pointed out how the 10-year treasury yield has risen to .96% from around .67%, and wondered what the bond boys were telling us…  But since then the yield has dropped again, and this morning sits at .88%… You don’t think that the Fed decided that the yield was getting too high and decided they needed to buy in bulk to push the price higher, and lower the yield, do you?  Nah… That can’t happen..  Ha! As If it couldn’t happen! 

Well, word going around the street yesterday, is that the European Union and U.K. are very close to having a Trade Deal worked out… This would be HUGE for both entities, since trade between the two have be tenuous since BREXIT… 

And that brings me to a request I had in the Pfennig Replies box, from a dear reader who wanted to know what my thoughts for the U.K. pound sterling, were going forward…  Well… As I explained last week, sterling is one of the major currencies that get bought as an offset to the dollar…  Euros first, then yen, francs and sterling… So, if the dollar is going to continue to weaken, it won’t matter that the U.K. had debt up to their eyeballs, and their Central Bank is considering negative rates, sterling will rally…by nature of being a major currency offset… 

You’ll have investors lining up to get out of the dollar, and buy “anything” that’s not the dollar… of course if we still used fundamentals to determine what currencies to buy, this is when we would use those fundamentals… But these days it’s all “trader sentiment”, and if the sentiment is to sell dollars, you’ll have to watch to see what, for the most part, traders use as the offset currency… But, like I said the major currencies get the most play here…  Throw in the Aussie dollar, and that pretty much gives you the list of currencies to watch…

You might be somewhat leery of a call for a weaker dollar with the stock market still hitting new highs, but here’s something to think about… Yesterday, a new virus vaccine with an effacy rate of 94%, was announced, and the dollar got sold on the day… Now, aren’t those that (with apologies to Grant Williams) make you go Hmmmm…. ?

I read yesterday, that in China it’s a punishable crime to talk in public about your thoughts on the U.S. election…   So, just in passing you say to your friend, “those election results are still questionable aren’t they?” And you’ll get thrown in jail and fined… No soup for you!  I wonder when that civil liberty of free speech will be taken from us? It’s already been taken away on Facebook, and Twitter…  Oh, by the way you can find me on Parler now… Not that I ever sent messages out very often to begin with, but I didn’t want the “free speech police” banning me!

One day they’ll come for the Pfennig… Or maybe I’m so small that it flies under the radar?  That could good and bad… Good that they don’t notice me, and bad that I don’t have enough readers to warrant going after! UGH!   And that brings me to another subject… Readers of the Pfennig…  I have about ¼ of the people that I send the Pfennig to each day, open and read it…  What the heck is the other 3/4’s of the list doing? If they aren’t going to read it, why see it in your email box each day, and ignore it? I find this very strange… Very strange indeed…

Today’s U.S. Data Cupboard will be stretched to the limit with Rocktober prints of Retail Sales, Industrial Production, Capacity Utilization, and added to those three, will be Business Inventories, and Home Builders report…  Ok, the BHI (Butler Household Index) tells me that Retail Sales will be down significantly in Rocktober from September, which saw back to school sales bloat its number.  Who knows what Industrial Production will have for us today? September has IP at -.6%, and one would have thought it would be stronger… Rocktober is expected to be stronger at 1.9%, but that’s an expectation that has nothing behind it, folks… So, we’ll have to wait-n-see what IP did last month..

There will also be Several Fed bank presidents speaking at Fed conference on racism and the economy. And New York Fed President John Williams interviews Mark Zandi of Moody’s Analytics  Man would I love to be the one that NY Fed President John Williams interviewed… I don’t think he would like my answers, but it would be more entertaining that the softballs that he’s going to toss to Mark Zandi!

To Recap… Both the currencies and metals rallied on Monday, with Gold climbing back to flat from being down $12 early… The price of Oil slide 50-cents on the day, and the Dollar Index fell from 92.76 to 92.49…  Thus not allowing the Petrol Currencies to rally on the day, along with euros, sterling A$’s, etc. it appears that the U.K. and E.U. will shake hands on a new Trade pact in the coming days, and Chuck thinks that’s a win-win for both entities.  And Chuck also points out that the dollar got sold yesterday, on a day when a new virus vaccine was announced…  Hmmmm….

For What it’s Worth… I hope you all had the opportunity to read yesterday’s article all the way through…  Well today I have another rant from Charles Hugh Smith, of whom I’ve quoted a few times in the past. In this article he explains that the “Great Reset” has already happened, and it can be found here: https://www.blacklistednews.com/article/78557/the-great-reset-already.html

Or, here’s your snippet: “Put another way: the elites have cannibalized the system so thoroughly that there’s nothing left to steal, exploit or cannibalize.

The global elites’ techno-fantasy of a completely centralized future, The Great Reset, is addressed as a future project. Too bad it already happened in 2008-09. The lackeys and toadies tasked with spewing the PR are 12 years too late, and so are the critics listening to the PR with foreboding.

Simply put, events outran our understanding of them. The future already manifested while we were trying to cram the present arrangement into an obsolete conceptual framework.

In broad-brush, the post-World War II era ended around 1970. The legitimate prosperity of 1946-1970 was based on cheap oil controlled by the U.S. and the hegemony of the U.S. dollar. Everything else was merely decoration.

The Original Sin to hard-money advocates was America’s abandonment of the gold standard in 1971, but this was the only way to maintain hegemony. Maintaining the reserve currency is tricky, as the nation issuing the reserve currency has to supply the global economy with enough of the currency to grease commerce and stock central bank reserves around the world.

As the global economy expanded, the only way the U.S. could send enough dollars overseas was to run trade deficits, which in a gold standard meant the gold reserves would go to zero as trading partners holding dollars would exchange the currency for gold.

So the choice was: give up the reserve currency and the hegemony of the U.S. dollar by jacking up the dollar’s value so high that imports would collapse, or accept that hegemony was no longer compatible with the gold standard. It wasn’t a difficult decision: who would give up global hegemony, and for what?”

Chuck again… Yes, the article is much longer than the snippet, and once again I implore you to read it, please, pretty please with sugar on top?  And I thank long time reader Bob for sending me the link above yesterday… 

Market  Prices 11/17/20: American Style: A$ .7319,  kiwi .6895, C$ .7639, euro 1.1878, sterling 1.3260, Swiss $1.0983, European Style: rand 15.3907, krone 9.0607, SEK 8.6151, forint 304.40,  zloty 3.7827,    koruna 22.2950, RUB 76.69, yen 104.21, sing 1.3432, HKD 7.7526, INR 74.42, China 6.5837, peso 20.34,  BRL 5.43.27,  Dollar Index 92.34,  Oil $41.25,  10-year .88%, Silver $24.67, Platinum $934.00, Palladium $2,345.00, and Gold… $1,887.70

That’s it for today…  Well, I tried to explain to Alex last night that in the first few years of his home loan that he’ll only be paying interest, and not much principal, which might lead him  to thinking of  paying a little more on his home loan each month than the payment scheduled amount. A little fatherly advice that I doubt he’ll listen to, because my other two kids never listened to my fatherly advice! HA!   When I was a young man, and my dad talked to me, I was all ears… But these days kids think they know it all… I’m just saying…   Well the NHL announced that they are moving the start date of the season to January from December…  More time for the Tampa Bay Lightening players to spend time with the Stanley Cup!  Stevie Ray Vaughn takes us to the finish line this morning with his song: The Sky Is Crying…   It’s the live version and it’s a good one!  I hope you have a Tom Terrific Tuesday and please remember to Be Good To Yourself!

 

Chuck Butler

 

 

November 16, 2020

* Currencies & Metals end last week on a good note… 

* There’s news of another vaccine ready to go this morning! 

Good Day… And a Marvelous Monday to you! The Classic IV had a song in the 60’s that went like this: Oh Stormy, Oh Stormy, bring back that sunny day!  Man did we have some wind and rain this past weekend! The wind was the devastating kind, that uprooted trees, and caused damage across the region… Oh Stormy….  Little Evie, and brother Braden came to stay with us for a while on Saturday, she’s growing up so fast! And her brother, just loves her to the beach and back!  I love to watch them interact with each other.  Braden can get her belly laughing, which is so cute!  I thank the Good Lord every day that he has allowed me to live with all that has gone wrong with my health, so that I can watch my grandkids grow up!  And looky here…. The Jefferson Starship greets me this morning with their song: Miracles…  

Another weekend, went by and still no absolute verdict in the Presidential race. I know the media has made the call, but then they went out of their way to make sure the President lost his reelection bid… The media is so controlled these days, which is why you don’t see much “ investigative journalism” any longer… If Watergate would have happened these days, no one would even know….  But  that’s all I have to say about that, before I go down a rabbit hole that I don’t want to, or need to go down….  And that’s that!

The currencies and metals both had good days on Thursday and Friday last week.  On Thursday, when I left you, Gold was up $4 in the early trading, and then went on to gain $11 on the day. And then followed that up with another gain of $12 to close the week at $1,890.20….  It just shows to go you that you can’t keep a good asset down….  The price manipulators completely whacked the crap out of the price of Gold last week on two occasions…  I wrote to a dear reader who asked me why I keep telling people to buy Gold, and then tell people that the price manipulators keep knocking its price down.  I said, “Well, these are simply short-term movements that allow people to buy at reduced prices.” As long as you don’t allow the price manipulators to get to you, you will see how Gold continues to rise after their price engineered take downs.” 

The euro had climbed above the 1.18 figure again on Thursday morning, and stayed above 1.18 the rest of the day and added to its price on Friday to end the week with the euro trading at 1.1837… Remember what I’ve told you about the line in the sand that has been drawn by the dollar bugs, which is around the 1.19 handle…  The Aussie dollar (A$) is still being held down below 73-cents, but it’s only a matter of time for that currency to take off, I do believe…  

One asset that can’t seem to get in line with the other anti-dollar assets, of currencies and metals, is Oil… The price of Oil slid $1 on Friday, thus not allowing the Petrol Currencies to follow the Big Dog euro off the porch to chase the dollar bugs down the street…  Not only did the $1 buck slide in the price of Oil on Friday not allow the Petrol Currencies to get off the porch, It didn’t allow them to even get up, as they lost ground on a day when most other currencies gained ground.

The Big news, markets-wise, this past weekend, was the announcement of a 10 country Free Trade Agreement in the S.E. Asian countries…  Hopefully this will soothe out the relations between China and Australia… Recall I told you how China was boycotting any shipments to China from Australia, because Australia had added their names to the list of countries that wanted a full investigation of the origins of the COVID-29 virus…

Speaking of the virus… here we go again!  Tomorrow, our county will be shutting down businesses and demanding that people say home, unless they are going to work, for groceries, and the gym… Oh, and for doctor appts. Which is was I was happy to see, since that’s the only time I DO get out of the house these days!  The first time they told us it was for two-weeks… And then 6 months later they relaxed the rules…. This time…. Who knows… how long it will be…  All I know is this…. The definition of being Insane is doing something over and over again and expecting a different result…  The lockdowns apparently didn’t work the first time, or else we wouldn’t be going into lockdown again…. I’m just saying…

Do, you know who Tom Woods is?  If you don’t, you should know him, and his thoughts, which he shares with his readers each week, sometimes more than once a week!  He’s a Libertarian and therefore his viewpoints aren’t always those that the mass media would follow… But they are bang on! Trust me when I say, I do believe you would like reading Tom Woods thoughts…  I don’t even recall how I came to read him all the time, as it’s been a long time since I began that process…

In the overnight and early morning trading, the currencies have slipped a little bit, and Gold is getting sold by $14… What is up with these selling days in Gold?  The Dollar Index is 92.76 this morning, as we start the week, let’s see where it takes us throughout the week… My suspicions are that the Dollar Index will continue to get weaker as the days go by… 

And there’s news this morning about another virus vaccine from Moderna, that’s 94.5% effective…  Well, I’m from Missouri, they’re going to have to show me, for me to believe that!  But still… that’s good news, because we’re going to need all the ammo we can get to push the virus across the river! 

OK… back to what’s going on in the markets…  James Rickards was in the minds of the readers at the GATA org. this past weekend, as they posted something from him..  You can find this article in its entirety here: https://dailyreckoning.com/the-bogus-case-against-gold/ … And here’s just a small sample of what he had to say about Gold: “The first one you may have heard many times. “Experts” say there’s not enough gold to support a global financial system. Gold can’t support all the world’s paper money, its assets and liabilities, its expanded balance sheets of all the banks and the financial institutions in the world. They say there’s not enough gold to support that money supply.

That argument is complete nonsense. It’s true that there’s a limited quantity of gold. But more importantly, there’s always enough gold to support the financial system. The key is to set its price correctly.

It is true that at today’s price of about $1,875 an ounce, pegging it to the existing money supply would be highly deflationary.

But to avoid that, all we have to do is increase the gold price. In other words, take the amount of existing gold, place it at, say, $14,000 an ounce, and there’s plenty of gold to support the money supply.

In other words, a certain amount of gold can always support any amount of money supply if its price is set properly.”

Chuck again… Do you know how people that make it big in something, like to write a book and tell people how they did it?  Well, I didn’t make it big in something, but I still like to tell you how you should own Gold! HA!

The U.S. Data Cupboard late last week had the Weekly Initial Jobless Claims, which fell further last week to 709,000, but the Continuing Claims remained above 21 Million…  which the back of a cocktail napkin accounting tells me the Unemployment Rates is 14%…  I would go to my grave arguing with the BLS over what the real Unemployment Rates is, and I know I would be correct, and the BLS would wrong!

OK, but recall last Thursday I said I would bet a dollar to a Krispy Kreme that the U.S. Budget Deficit for Rocktober would be greater than the $100 Billion that was projected?  Well, I would have won that bet, because the Rocktober Budget Deficit printed at $284 Billion!!!!!  OK, let’s just think about this for a moment… Do you think that the Budget Deficit numbers will come down in the coming months or remain at high levels?   Me? I think they will remain at high levels, and could possibly make $284 Billion look like chump change! Oh, and BTW, $284 Billion annualized is $3.4 Trillion… 

Deficit spending has become a way of life for the U.S. And they (the powers that be) believe that none of it will matter… That deficits don’t matter… That running deficits so high, do not drag an economy’s growth through the gutter, and so on….  But they are wrong… And will be proven wrong on judgement day for the financial system…  I’m just saying…

While last week’s Data Cupboard didn’t have much for us, this week’s offerings will be quite crowded at times. For instance, there’s only a regional manufacturing activity report, that I boycott, to print today, while tomorrow, we’ll see Rocktober reports for Retail Sales, Industrial Production and Capacity Utilization…  And then on Wednesday, crickets, and on Thursday we go right back to the Weekly Initial Jobless Claims, etc. and end the week on Friday there’ll be nothing, nada, zip, zero, zilch, a big goose egg! 

For What It’s Worth…  Man, I want to make sure that everyone reads today’s article in the FWIW section! I’ve quoted Egon Von Greyerz before here in the Pfennig, and weekly he sends me his company’s letter… And last week’s was so well written and the to the point of everything I’ve been talking about, so please, set aside a few minutes, and click on the link to read the letter… I wish I had written it, for it is so good! And it can be found here: https://goldswitzerland.com/the-madness-of-crowds-the-sanity-of-gold/

Or, here’s your snippet: “As for central banks who print money out of thin air to buy unwanted sovereign debts, they too are projecting miraculous solutions to otherwise staggering debt problems based on, you guessed it: Creating more debt.

And how will this debt be paid? Easy—with money created by a mouse click at a central bank near you.

Seem a little bit too good to be true for the economic future?

Well, the U.S. Fed’s track record for forecasting recessions is 0 in 10, but that has never stopped them from making inaccurate and contradictory projections which resemble a kind of open madness:

“You will never see another financial crisis in your lifetime.”

-Janet Yellen, spring 2018

“I do worry that we could have another financial crisis. ″

-Janet Yellen, fall 2018

“There’s no reason to think this (bullish) cycle can’t continue for quite some time, effectively indefinitely.”

-Jerome Powell –2018

“The US is on an unsustainable fiscal path; there’s no hiding from it.”

-Jerome Powell–2019

In the post-08 “new abnormal” of deficits without tears and embarrassing new theories which argue that unlimited money creation can never lead to inflation , the fantasy forecasters have been quite busy replacing reason with madness.”

Chuck again… so, if you only read the snippet, you’ve just found out how good this article is… for this is just one part of the whole letter… . Please Read it!

Market  prices 11/16/20: American Style: A$ .7292,  kiwi .6867, C$ .7643, euro 1.1830, sterling 1.3170, Swiss $1.0934, European Style: rand 15.4087, krone 9.0699, SEK 8.6661,  forint 302.65,  zloty 3.7769,   koruna 22.2726, RUB 77.34, yen 104.95, sing 1.3467, HKD 7.7533, INR 74.41, China 6.6053, peso 20.26,  BRL 5.4565,  Dollar Index 92.76,   Oil $41.93,  10-year .92%, Silver $24.43, Platinum $896.00, Palladium $2,366.00, and Gold… $1,876.00

That’s it for today…   Well, I have to say that I’m getting that good Old Revolt feeling…  Several restaurants in our area are threatening law suits to remain open… What to go!  Stay open!  Do not shutter your businesses again!  OK, I finished my book, The Madness of Crowds, and now have a new one waiting for me titled: Taming The Megabanks… I wonder what that could be about? HAHAHAHA! Well, the sun is supposed to make an appearance today, and the wind is gone so it should be a nice day, albeit quite chilly…  The Five Americans take us to the finish line today with their song: Western Union… A great 60’s song, for sure!  And with that… I hope you have a Marvelous Monday, and please Be Good To Yourself! 

Chuck Butler

November 12, 2020 

* Currencies drift higher on Wednesday… 

* Gold gives back its Tuesday gain on Wednesday… 

Good Day… And a Tum Thumpin’ Thursday to you!  It was one of those days for me yesterday, I guess too much going on recently finally caught up to me… Around 1:30 pm I was reading stuff, and I began to feel my eye lids closing and me yawning. I knew I needed a nap… That nap lasted 4 ½ hours! And then all evening I was still yawning. UGH!  Last year, I ditched cable, and decided that streaming TV was what I wanted. So I signed up for YOUTUBE TV…  And all was well, here and in my second home in Florida… But then YTTV hiked their prices… Ok, it’s still about 50% less than what I paid the cable company. But then they announced they were dropping the regional Fox sports stations… That’s where I get my Cardinals and Blues telecasts! This is getting bad…. Then last night, a national outage of YTTV…     I guess it’s time to look elsewhere… UGH!   Credence Clearwater Revival (CCR) greets me this morning with their song: I Put A Spell On You…  

Well, the healing that took place on Tuesday, was wiped out on Wednesday, Gold lost $12.50 to wipe out most of Tuesday’s $14 gain… To close at $1,866.20…. Silver, on the other hand, gained a nickel on the day…  Yes, 5-cents to close at $24.37… Strange day indeed for the metals…  The currencies kind of drifted during the day, up a little , down a little, not really moving much. Yesterday morning the Dollar Index was 93.09, and last night after the close, it was 92.99… So, like I said, drifting. On the day…

In the overnight markets the dollar has gotten sold a little more, and Gold is up $4…  The euro has climbed back above 1.18, and I’ve got some to say about the single unit, so keep reading! 

The news on Monday of a breakthrough in finding a vaccine for the COVID-19 Virus seemed to be a strong indication that things will get back to the way there were…. However, there is still some time that’s going to be needed to organize and plan the distribution of the vaccine… And that’s not helping the Eurozone, who’s deaths from the virus are climbing… And the Eurozone leaders are contemplating a lockdown again… Italy, which suffered the worst of the ravages of the virus last spring, have been demonstrating against another lockdown… We’ll have to see where that takes the region as a whole…

I went through of that to explain what’s causing the weakness in the euro… The euro on Monday was within spittin’ distance of the 1.19 handle, and hadn’t sniffed the 1.18 handle since, until last night that is….  The single unit had traded below 1.18 for three days now, and looks like it wants to drop further to me… But the one thing supporting the euro, is its place as the offset currency of the dollar. So, when traders want to sell dollars, they buy: Euros, first, francs second, yen third, sterling fourth, and then so on down the line… And the thought of selling dollars is weighing heavily on traders right now… Hedge Funds too, are contemplating selling dollars, as are many other large outfits…

I don’t know what it will take for them to pull the trigger on the selling of dollars… But when it comes it will be like the proverbial snowflake that causes the avalanche!  It could be delay news on the vaccine, it could be a final decision of the courts on the winner of the Presidential election, it could be the announcement of a new economic lockdown here in the U.S., it could be a number of things, but one sure seems to be ready to happen, at a moment’s notice… 

I’ve seen the trading outfits all ready to move before, folks… See, that’s what you get when you follow a guy who has been around currency trading since 1992… And in the investment business since 1973…  The last time I saw this, was 2009, when it was rumored that the Fed would begin to demonetize the debt (Quantitative Easing), and then when it was announced in March of 2009, the triggers were pulled and it was an all-out assault on the dollar… The time before that was 2001, and I recognized what was going on and wrote the White Paper: The Decline of The Dollar. Soon, then President Bush announced that he was going to implement tariffs of Japanese steel… And that caused the triggers to get pulled, and sell the dollars,  in February 2002….  

Yes, we’ve had several false dawns in the past couple of years… And each time, I jumped too soon, and thought that the sentiment toward holding dollars had changed… But this time, I have checked all the boxes, and they all line up to a scenario much like 2009, and 2001…   I’m just saying…

OK… well the Aussie dollar (A$) began the week trading above 73-cents, reaching .7320 before backing off on Tuesday… I believe what we’re seeing in the A$ is a  correction, in that the A$ jumped too high too fast and now needs to fill in the gaps…  You know interest rates here in the land down under are still pretty low, with their official cash rate at  0.10%, which most depositors are getting nothing or being charged… When you trade for the A$, the price of the A$ will include forecasts for interest rates….  Let’s listen to the Reserve Bank of Australia (RBA) in their latest (11/6) Economic Statement….

“In Australia, the recovery in activity has been underway for several months after the economy experienced the deepest peacetime contraction since the Great Depression in the first half of the year. The domestic recovery is set to be supported by the further easing in activity restrictions and substantial monetary and fiscal policy stimulus. The baseline scenario for GDP growth has been upgraded a little relative to the August Statement. This reflects stronger-than expected household consumption and additional policy support (including that announced in the Australian Government Budget), though a downward revision to resource exports has partly offset the firmer outlook for domestic demand. Even after the GDP forecast upgrade, the severity of the  downturn in the first half of the year means that GDP is not expected to return to its pre-pandemic level until the end of 2021.” = RBA Economic Statement 11/6/20

So, there’s a lot of central bank parlance there, but what I get out of it is that the RBA feels that while the outlook is for subdued growth, they feel like things will get better as we move along early next year…  So, to me, the A$ is looking like a buy at sub 73.50-cents… 

I just saw a blurb that made me laugh out loud…. Do you want to take a guess at what was the best performing Emerging Markets currency in the last week?  Well, if you happened to guess that is was the Turkish Lira, you would be correct… The bump up in price of the lira was due to the canning of the former finance minister, who had see the lira drop to the lowest level on record during his watch…  I still wouldn’t touch that currency with YOUR ten foot pole!

Ok, back to stuff that we follow… Well, the price of Oil slid downward yesterday for the first time in about two weeks… Oil lost $1 in trading yesterday, and that caused some slippage in the Petrol Currencies… Not much, but some… enough to be able to see with a quick check of the currency values…

The yield on the 10-year Treasury Bond fell a couple of bips yesterday, from .96% to .93%… I had been watching this yield rise from the .68% level a few weeks ago, to where it is today, and kept wondering what the bond boys were telling us…  Do they see inflation as a problem?  Or do they see something else…  Well, now that the daily increases of yield have had a setback, one has to wonder what caused that? And here’s where this is going to sound a bit political but trust me I’m just stating the facts that were reported on CNBC.com   “That a Biden advisor says a 4-6 week lockdown could control the pandemic and revive the economy”…    Bond buyers were lining up to buy bonds on that news folks….

Remember the original lockdown was supposed to be 15 days? And then that went on for months, unnecessarily, in my opinion, but it is what it is….   So, if they tell us 4-6 weeks, that could turn into? Only the Shadow knows how long!

Man do I not like talking about this darn pandemic…. I call it the plandemic, for a number of reasons that we won’t get into here…. But come to the Butler Patio before I head to Florida in Jan, and I’ll be glad to opine…

The U.S. Data Cupboard actually has something for us today! The Weekly Initial Jobless Claims for last week will print, along with the stupid CPI (consumer inflation) for Rocktober…  I’ll be interested in the Continuing Claims which last week were 21.51 Million…   And the other piece of data that will print is the Rocktober Federal Budget… I’ll bet you a dollar to a Krispy Kreme that the Budget Deficit for Rocktober is greater than $100 Billion… That’s Billion with a capital B…. 

Oh, Lordy, me… please protect me from the damages of deficit spending! 

To recap… The healing on Tuesday saw the band aid ripped off of Gold on Wednesday, as the shiny metal lost $12 of its $14 gain Tuesday…  Silver actually gained a nickel yesterday, which is much better than a plug nickel!  Remember how upset you would be when you reached in the coin return box, and pulled out a plug nickel?  Soon vending machines caught up with the use of plug nickels and that didn’t happen any longer….  I saw a sign the other day, that was sad…. “My kids will never know the joys of reaching in a coin return box of a coin operated Telephone.”   

Man! Did I ever go off on a tangent there! Sorry about that! To finish up the recap… Oil slid downward by a buck, and Treasuries rallied. The currencies drifted throughout the day, as there were no new developments on the virus vaccine announcement on Monday.

For What It’s Worth…  There’s been some upbeat news from China in recent times… Inflation is the lowest its been in years, GDP was 5%, and they have the lowest number of Covid cases in the world…. I saw this quote from Ray Dalio and it got me thinking, “Anti-Beijing bias has blinded too many for too long to opportunities” by Ray Dalio, founder, co-chairman, and co-chief investment officer of Bridgewater Associates. And then longtime reader, Bob, sent me a link to an article about China in the FT, and I immediately thought, this is FWIW fodder for sure!  And so you can fine the article here: https://www.ft.com/content/8749b742-d3c9-41b4-910e-80e8693c36e6

Or, here’s your snippet: “For as long as I can remember, people have said that China cannot succeed. Communism doesn’t work. Authoritarianism doesn’t work. The Chinese aren’t creative. They have a big problem with bad debts and property speculation. Yet every day we see China succeeding in exceptional ways.

It has achieved some of the world’s lowest Covid-19 case rates. Over the past year, its economy grew at almost 5 per cent, without monetising debt, while all major economies contracted. China produces more than it consumes and runs a balance of payments surplus, unlike the US and many western nations. This year nearly half the world’s initial public offerings {1} will be in China, including Ant Financial’s $30bn listing {2}, the world’s biggest ever. Even Tesla’s best-selling Model 3 {3}car may soon be made entirely in China.

The world order is changing, yet many are missing this because of a persistent anti-China bias. China’s extraordinary performance isn’t new. In fact, apart from the 1839-1949 “Century of humiliation”, it has historically been one of the world’s most powerful countries and cultures. Just over the past four decades, its economic changes have been remarkable. Whatever criticisms you may have about Chinese “state capitalism”, you cannot say it hasn’t worked, even if you strongly disagree with how Beijing has done it.

All this is to say that China’s rise has giant political, economic and investment implications. Politically, China has become a major issue for both parties in the US, which fears its rise, spreading global influence, and rejects its authoritarian model {5} and treatment of minorities such as the Uighur Muslims {6} in Xinjiang. China’s rejoinder is that a strong hand is needed to maintain order, what happens inside its borders is its business, and the US has its own human rights problems. 

Meanwhile, China’s economy is roughly the same size as the US’s and expanding at a faster pace – so time is on China’s side. It has a growing population of well-educated people, with around a third of the world’s science and technology university majors, three times the US share. It also produces and collects vastly more data to process with artificial intelligence. One way to look at China’s relative power is that, with four times the US population, when its per capita income reaches half the US’s in about 25 years, its economy will be twice as large.

Last, there are the investment implications. As a global macro investor, I think a lot about how much I should invest where, looking at fundamentals and how others are positioned. China’s fundamentals are strong, its assets relatively attractively priced, and the world is underweight Chinese stocks and bonds. These currently account for 3 per cent or less of foreign portfolio holdings; a neutral weighting would be closer to 15 per cent.

This discrepancy is at least in part due to anti-Chinese bias. I think it is about to change. Chinese markets are opening up to foreigners, who can now access at least 60 per cent of them compared with 1 per cent in 2015. Benchmark weights in major indices are rising. {9} As a result, I expect China to enjoy favourable capital inflows that will support the currency, {10} already at a two-year high, and financial markets too. All this argues for a China overweight in my portfolio.”- Ray Dalio

Chuck Again…  This talk about China takes me back to 2003, when we first found out on the EverBank World Markets Desk that we could buy forward contracts in Chinese renminbi… And then made a press release that we could offer renminbi CD’s.. OMG! The phones lit up and stayed lit up for weeks with potential clients wanting to know the details of our renminbi CD…   China has come a long way since then, and now offers a deliverable yuan… I don’t think it would wise to keep an anti-Chinese bias, folks… I’m just saying…

OK, I’ve just got to go down this rabbit hole this morning… Did you see the news that Citicorp got a $400 Million charge by the regulators for doing “unsafe or unsound practices”… The regulators wouldn’t tell us what Citi did wrong.. OK, this has got my goat this morning! First last year the regulators wouldn’t tell us who was having to get the daily injections of money from the Fed, and now they won’t tell us what Citi did…  I know one thing, I’m writing my Senator this morning to let her know that I do not believe this is the right way to be transparent! 

Market Prices 11/12/20: American Style: A$ .7262, kiwi .6867,  C$ .7646, euro 1.1811, sterling 1.3150, Swiss $1.0934, European Style: rand 15.6480, krone 9.1123, SEK 8.6183,  forint 300.56,  zloty 3.8062,   koruna 22.3885, RUB 76.58, yen 105.30, sing 1.3487, HKD 7.7537, INR 74.58, China 6.6171, peso 20.53, BRL 5.4084,  Dollar Index 92.90,  Oil $41.81,  10-year .93%, Silver $24.25, Platinum $871.00, Palladium $2,362.00, and Gold… $1.870.80

That’s it for today… no YTTV last night didn’t shut me out of watching TV… I have ROKU, so there are many other channels I could watch, including ESPN…  So, I had that going for me! I finished my part of the Interview with Dennis Miller yesterday, and sent it off to him… I’m really excited about this one folks… Well, I was excited about the last one, where I gave my explanation about who’s behind the curtain of the price manipulators… Dennis always has a good line of questions for me, and I have to work hard to get them right!  You can still probably read that letter with my thoughts at his website: www.milleronthemoney.com  Journey takes us to the finish line today with one of my fave Journey songs: I’ll Be Alright Without You…  (There’ll be someone else, I keep telling myself!)  I hope you have a Tub Thumpin’ Thursday, and Fantastico Friday tomorrow, and will please, pretty please with sugar on top, Be Good To Yourself!

Chuck Butler