Author: admin

February 8, 2021

* Currencies & metals rally on Friday after weak jobs #

* Another week, of poor economic data last week… 

Good Day… And a Marvelous Monday to you! Well, that wasn’t much of a Super Bowl last night… the game was over before half-time, in my opinion… Congrats to the Tampa Bay Bucs on their second Super Bowl Championship win…  My state’s basketball teams fared better than our state’s  NFL team, as Mizzou beat Alabama, and St. Louis U  beat St. Bonaventure, Both wins were against the leader of the conference.. So, big wins for sure! It was kind of a blah weekend weather wise here in S. Florida, but tons better than back home! Well, baseball has decided that it will start on time, which means by the end of next week, pitchers and catchers will be reporting. The first spring training game is Feb. 27^th…  My first game will be Feb 28^th…  Things will be very different inside the stadium this year, but at least I’ll get to watch my beloved Cardinals play day baseball! For all us old timers this morning, Ray Charles greets me with his song: You Don’t Know Me…

Well all the dollar bugs had their week last week, but it ended on Friday, as both the currencies and metals rebounded… The outcome of the Jobs Jamboree didn’t help the dollar bugs any. I’ll talk more about the data from late last week later in the letter… I was happy to see Gold gain $21.30 to close at $1,815.20, and Silver gain 64-cents to close at $27.24…  The euro also rallied moving up and over the 1.20 handle that it had fallen through last week.

In the overnight markets, there’s been some firming up of the gains that were made on Friday, and Gold is up a buck in the early trading, and Silver is up 11-cents… So, no real movements in the overnight markets… Sammy Hager is singing his song: Rock-n-Roll Weekend on the iPod right now, and that got me thinking about how it certainly wasn’t a Rock-n-Roll weekend for the dollar bugs, as their hold on the currencies & metals was ripped from their hands on Friday, and the while there were other reasons for this to happen on Friday, it was really a case of the rotten results of the Jobs Jamboree… 

And that begs the question, “will the poor Jobs Jamboree, untether the currencies & metals to move higher VS the dollar, and not just be a one-and done deal? ”  Well, I have to say that in my humble opinion, which could be wrong, but rarely is, I’m thinking that if we saw more economic data this week that could continue to push the dollar bugs back into the wall boards, but that’s not the case this week, as the Data Cupboard is lacking at best for economic reports that matter this week. So, the answer to the question is really a tossup at this point… We’ll have to wait-n-see… 

I read an article this weekend that the GATA folks sent me that, talked about that investors are starting to recognize that market rigging by central banks may be most heavy-handed in the gold and silver markets. I would certainly hope so! And that got me thinking about many years ago. We had some traders come visit us at EverBank World Markets, and in a side bar, that asked, me, “Do you really believe that Gold & Silver prices are manipulated?” I laughed at them and said, “yes, don’t you?” They then went into the company line of how there’s no proof…  I said to them did you read the full-page ad that the GATA folks took out in the Wall Street Journal? I wonder what those traders think these days all these years later?

Of course, if those two traders are still employed at that position, I’m sure while they may think there’s manipulation, they would have to hold the Company line on manipulation… BTW these guys were from JPMorgan, need I say more?

The yield on the 10-year Treasury is still moving higher and sits this morning with a 1.19% yield… What are the bond boys telling us?  Well, I don’t know if it’s them telling us anything, but more of a realization that when the Cartel isn’t in buying bonds, there’s little demand around the world for Treasuries…  And that, my friends, is a real problem that’s brewing for us… just to give you a heads up… 

And the price of Oil continues to move higher too… The Petrol Currencies have finally taken notice and gained some ground on the dollar. Has the price of Oil moved too far too fast?  Good question, Chuck! I guess we’ll see in the coming days… 

OK… Well, the Unemployment situation in this country is not good, and not getting better.. .Don’t pay attention to that data behind the curtain!  The Unemployment Rate dropped from 6.7% to 6.3%, when we only added 49,000 jobs, in January, which didn’t even recover the 227,000 jobs that were lost In December! So, riddle me this Batman… How does the Unemployment Rate fall, when we’ve not added any new jobs in 2 months?  Ahhh, grasshopper, I’ve explained this before, but for those of you new to class…  You see, the Gov’t doesn’t count you as being unemployed, after your unemployment benefits run out… Makes sense right? NOT!  You’re still unemployed, but not being counted as such!   Stupid, Stupid, Stupid!  But that’s the Gov’t for you, eh?

Why not come clean? Why not tell the truth to the people?  Because they can’t help themselves but to lie to the people, that’s the way it’s always been done, right?  Well, I don’t know about that, but at least since the 90’s… For it was during the Clinton administration that we changed the way consumer inflation is calculated, so that interest rates could be lowered, and everyone could afford a house… This was, in my opinion, the beginning seeds of the Housing Debacle… But I digress…

Also last week, the Weekly Initial Jobless Claims fell to 779,000, And while they seem to headed in the right direction, they are still way over the numbers that would reported pre-lockdowns… So, in other words, they are still very high!  You know I don’t care too much for the Productivity data, but when it falls to a negative -4.8% in the 4^th QTR, even I have to sit up and take notice…  A few years ago when Janet Yellen, now treasury sec., and then Cartel chair, was very concerned about the lack of productivity in the U.S. economy… I wonder what she thought of the 4^th QTR’s Number? 

There was also a surprise last week when Dec. Factory Orders gained 1.1%, down from Nov.’s 1.3%, but still was positive in the month when lockdowns were back for some states, including California the worlds 5^th largest economy…  yes, that’s right… even larger than the U.K.!  So, I don’t know how Factory Orders were still so positive, but I’m sure there’s a valid explanation… right? HA!

The U.S. Data Cupboard this week, starting with today’s empty cupboard, will be lacking at best!  So, there will be nothing here to either hurt or help the dollar this week… 

Before we head to the Big Finish today I wanted to talk a bit about something that’s been on my mind…  I read a report this weekend that talked about how the Bank of America had Bank of America economists  recently state that they see little optimism in terms of a reopening of the economy, and that hard lockdowns will return, possibly in March or April. And the reason for this? The Covid variant or mutation story that’s gaining speed…  

I would have thought that most economists would have seen the damage that was done not only to the economy but the social fabric of people by the first lockdowns, and shy away from even thinking about locking down again…  And that feeds into my conspiracy thoughts of how the Global Elitists have used the pandemic to speed up their quests to control the world…  I know, I know, you’re saying, Chuck, put away the tin foil hat! But I have to tell you that this is why I call the pandemic a plandemic… I’m dead serious about this stuff folks… 

One of the things that I’ve mentioned in the past about the current goings on is that during the lockdowns American consumers stopped using folding cash and strictly used their credit / debit cards… I could see the eyes of the Global Elitists widening with joy, because this lays the groundwork for their desire to have a digital currency…. 

To Recap… The Currencies & metals both rallied VS the dollar on Friday last week, with the Jobs Jamboree helping the dollar bugs to hide… Chuck talks about a GATA article talking about how investors are catching on regarding metals manipulation, and then remembers a conversation he had with some traders years ago… And then we do a deep dive into the data from last week.. .

For What it’s Worth…  Well, longtime readers know how wrong I was about the dollar losing its reserve currency status by the end of the decade… But I doubled down, and said it was still in the cards, it’s just taking longer than I first realized… And this article basically gives us the reasons why the dollar’s reserve currency status is questionable going forward, and it can be found here: DoubleLine Warns Events Are In Motion To Remove Dollar As Reserve Currency | ZeroHedge

Or, here’s your snippet: “For every action, there is an equal and opposite reaction. In the case of international trade and global payments, the U.S. made aggressive use of sanctions and tariffs. With some merit, Washington has argued that these actions level the playing field for global trade or punish bad global actors. But a series of equal and opposite reactions are occurring as nations move to remove the role of the U.S. dollar at the center of global trade and finance.

Over the past years, the U.S. set out to address inequities in the global trade environment by imposing tariffs and sanctions on various countries from China to Mexico and Canada with the rewriting of the North American Free Trade Agreement into the United States-Mexico-Canada Agreement. Even the countries in the European Union were affected. In addition, Washington implemented sanctions against Russia in 2014 in response to Moscow’s annexation of Crimea, and more recently against Iran and Venezuela, effectively using the dollar’s role at the center of global trade and finance to force compliance of other nations. These actions impacted nations beyond those directly targeted by the U.S. action, and today many governments around the world are taking countervailing steps to remove their reliance on the dollar-based global trade and finance system that has reigned since 1944.

In November, 15 Asian countries, comprising 30% of global GDP, signed the Regional Comprehensive Economic Partnership (RCEP), creating a free-trade zone among the signatories. This agreement attempts to provide gains to trading within the regional partnership through reduction of trade and investment barriers, and increased incentives for economic integration. It is noteworthy that RCEP came about without participation of either the U.S. or Europe, and has effectively created the world’s largest trading bloc, according to the Rand Corp. Beyond the obvious benefits for economic growth in the region, a more-subtle byproduct of this agreement is to focus on bilateral settlement of trade, effectively removing the dollar as the standard unit of transaction for regional trade,”

Chuck Again…  Well, it’s not something I want to see happening but it sure seems to be in the cards… And while it’s quite evident, it’s just not imminent, right now… But one day it will be…  Got Gold? 

Market Prices 2/8/21: American Style:  A$ .7656,  kiwi .7186,  C$ .7825, euro 1.2031, sterling 1.3690, Swiss $1.1102, European Style: rand 14.9405, krone 8.5260, SEK 8.3928, forint 298.00,  zloty 3.7275,   koruna 21.4075, RUB 74.58, yen 105.61, sing 1.3355, HKD 7.7519, INR 72.98, China 6.4657, peso 20.18,  BRL 5.3612,  Dollar Index 91.16,  Oil $57.55,  10-year 1.19%, Silver $27.34, Platinum $1,156.00, Palladium $2,436.00, Copper 3.61, and Gold… $1,817.10

That’s it for today… Well, I’m not all by myself any longer…  The last two weeks went by very fast. Of course for 4 of the days, I was out of it, with being sick, and slept most of the time… I did some cleaning up of the place so that it didn’t look like I had turned to a slob! Kathy shared a picture with me of my darling granddaughter, Evie, all bundled up for the cold and snow… Reminded me of Randy in The Christmas Story! “ I can’t move my arms!”  I tried to talk to Evie on Facetime a couple of weeks ago, and she was much like most people I’ve known… out of sight, out of mind…  So, when I get home in April, I’ll have to reintroduce myself to her… I was informed that son, Alex will be here for a few days at the beginning of March. So, that will be fun…  The great soulful voice of Smokey Robinson takes us to the finish line today with his song: Cruisin’ … A song that’s getting played again as it is featured in a TV commercial… I could sit there an listen to Smokey Bill Robinson all day… So, with that, I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

 

February 4, 2021

* Gold & Silver are getting sold this morning… 

* The waning years of the Empire of Debt? 

Good Day… And a Tub Thumpin’ Thursday to you! Another nice win last night from my beloved Missouri Tigers basketball team, and they beat Kentucky! They have a big challenge on Saturday, when they’ll play the number 1 team in the SEC, Alabama… I’ll be glued to the TV for that one! I really don’t know where the day went yesterday… I never left the condo, and wore a heavy jacket all day, for it was chilly in the condo… One of my condo neighbors brought me a piece of cheesecake yesterday, as his wife was worried about me… I put it in the fridge, because I can’t eat sweets, so it’ll be there for Kathy returns on Sunday. But that sure was nice of Gloria to be thinking of me… I guess when people here don’t see me sitting out on the deck reading during the day, they begin to think that maybe something has gone wrong, as they all are aware of me having cancer… The Eagles greet me this morning with their classic rock song: Hotel California… “There she stood in the doorway, I heard the mission bell, and I was thinking to myself this could be heaven or this could hell.”

What on earth is gong on these days with currency traders? Are the waiting for a particular piece of data, like maybe the Jobs Jamboree tomorrow? Or, is it something else? I think that my thought earlier this week that the currency traders were between a rock and another rock, couldn’t possibly be still the case 3 days later, could it?  Crazy questions to ask so early in the morning, eh? But Inquiring Minds Need To Know! In the old days when I was trading for Mark Twain Bank, then Mercantile Bank, then EverBank, I would simply pick up the phone and call a trader friend and the scoop on what was on traders’ collective minds. But when I left EverBank,  I left behind all those phone numbers, and email addresses of the traders I knew… Not that now that I’m not associated with a firm that does currency business with the they would talk to me… But you never know!

So, with that intro… The currencies drifted again yesterday… no bid, no offer… and no direction… And I doubt the Bank of England (BOE) Monetary Policy Comm. Meeting this morning will have any say in the directionless currencies. And in fact, while I’m writing the BOE announced that they weren’t changing a thing…   And in the Eurozone will print their Retail Sales report for December… I don’t know, but I’m thinking that the Eurozone will not print a negative Retail Sales for December like we did here in the U.S.   But again, I doubt this will have anything to do with what the dollar and the currencies do today…

Gold & Sliver didn’t fare any better than the currencies yesterday, as Gold closed down $3.60 at $1.834.60, and Silver closed down 17-cents to $27.15…   Last night before I went to bed, I checked the metals and Gold was down $11 and Silver down 30-cents bringing Silver back below $27…  It seems to me that the crowd buying of Silver has petered out… And we’re back to normal demand for the metals, which lately hasn’t been there… I would think that with these much cheaper prices in Gold & Silver that buyers would be lining up…  Oh, and the word I heard from the anit-short sellers, is that they aren’t finished yet with Silver… So, maybe they can move the price a little higher again, but if the price Manipulators get angered, watch out!

In the overnight markets, Gold continued to slide further down and is now down $20, and Silver is down 50-cents… And the euro, which in the past few days has seen more traders turn their nose up at the single unit, has dropped below 1.20..  The rest of the currencies haven’t moved much, but their leader is takin on water this morning… 

Strange days indeed…  Stocks keep rising, Bitcoin, after a brief selloff, keeps rising, and both are in my mind scams, that one day will come to light… But for now, it’s jump on the bandwagon or be left behind… The problem with that thought is much like the common folks that got into the dot.com rally 21 years ago, only to buy at very inflated prices, and then see the rug pulled out from under them, the dot.coms crashed and the late arrivals to the dot.com rally were left holding the empty bag…  And I see history repeating itself here folks.. .You know history may not repeat itself, but it’s always near the scene of the crime…

And with aircraft carrier units sailing in the South Pacific heading toward China, Gold can’t find a bid… Is there some secret plans I don’t know about, to stay away from Gold?  I would guess the folks in China, India, and all over Asia haven’t gotten the memo then…  For they certainly are keeping the demand for physical Gold going strong…  Russia has been out of the Gold buying business for almost a year now, as they stopped buying when the Covid-19 virus became a global problem last spring.  But Russia has done a ton of physical Gold buying in the past few years, and the last count of their Gold bars had their value higher than any currency that Russia holds in reserve… Which is pretty much void of dollars, but they still hold a ton of euros, yen, sterling… The famous trio of currencies that I used to use in my  presentations as examples of diversification… No wait, not sterling, but Swiss francs!  Yeah, that’s the ticket!

As far back as 2005, Bill Bonner & Addison Wiggin authored a book titled: Empire of Debt…  They did an update in 2009, with a second edition. But the original idea has stood the test of time, and these days more and more people are talking about the declining Empire (the U.S.) because of debt, and sending its military all over the world, and if they were updating the book today they would be able to include currency printing & fake money…

In his daily writings, Bill Bonner, still goes back to his thought that the U.S. is an Empire in decline, having reached its APEX in 2000…    And since I read the book 15 years ago, I have been on board with his thoughts that the U.S. is an empire in decline…   These things don’t happen overnight folks, and even today 15 years after printing the 1^st edition of his book, the U.S. is still showing signs of decline… If you haven’t read this book I’m talking about, you should go to wherever you order books and get it ordered to read it and then when I talk about things like this you’ll be on board with me!

Don’t cry for the U.S. declining Empire, this has been going on for years now…  Some people think that the Empire began after WWII…  But check this out that I pulled from the www.informationclearinghouse.com site: “Americans were not always so ignorant of the imperial nature of their country’s ambitions. George Washington described New York as “the seat of an empire,” and his military campaign against British forces there as the “pathway to empire.” New Yorkers eagerly embraced their state’s identity as the Empire State, which is still enshrined in the Empire State Building and on New York State license plates.”

Ok. Onto other things on my mind…  In a very strange twist of fate or events… Iran which had a law in place to not accept any vaccines from the West, decided to skip over that law and order the Astra-Zeneca vaccine… When events are dire…  

American Airline has announced that there will be 13,000 layoffs come this summer when the airline travel slows…. Who wants to make a bet with me that these 13,000 layoffs don’t show up in the BLS’s Jobs Jamboree when the time comes?  I say they won’t, what say you?

The U.S. Data Cupboard saw the ADP Employment Report for January rebound from December’s loss of 78,000 jobs, and January’s number was 174,000 jobs created… That was a good rebound, no? Why yes it was, still not the size of job creation we saw before the virus hit last spring, but certainly better than the 78,000 jobs lost in December! 

Today’s Cupboard has the usual Thursday fare of Weekly Initial Jobless Claims, and in addition it will serve up the 4^th QTR Productivity report, which to me is stupid… And we can’t forget that Factory Orders will also print today, this being their December report…  So a decline in this number is all lined up by the previous prints of Durable Goods, the ISM Index, Retail Sales and Personal Spending… I guess we’ll see what the accountants have in mind for this report today…

To recap… The currencies didn’t move again on Wednesday, but Gold dropped $3 and Silver dropped by 17-cents, and both are down in the early trading this morning.  Chuck wishes he had kept the phone numbers and email addresses of the traders he used to talk to…  Chuck talks about the Empire of Debt, and the declining U.S. Empire… And wonders what event the currency traders are waiting for before they begin to move the currencies in one direction or the other?

For What It’s Worth…  Well, I have an interesting article for you today… This is about the supply lines being disrupted and things not getting to places they need to go, like food! And this article can be found here: The Global Food Trade Has Been Upended by a Container Crisis – Bloomberg

Or, here’s your snippet: “Food is piling up in all the wrong places, thanks to carriers hauling empty shipping containers.

Global competition for the ribbed steel containers means that Thailand can’t ship its rice, Canada is stuck with peas and India can’t offload its mountain of sugar. Shipping empty boxes back to China has become so profitable that even some American soybean shippers are having to fight for containers to supply hungry Asian buyers.

“People aren’t getting their goods where they need them,” said Steve Kranig, director of logistics at IM-EX Global Inc., a freight forwarder that handles cargoes including rice, bananas and dumplings from Asia to the U.S. “One of my customers ships 8 to 10 containers of rice every week from Thailand to Los Angeles. But he can only ship 2 to 3 containers a week right now.”

The core issue is that China, which has recovered faster from Covid-19, has revved up its export economy and is paying huge premiums for containers, making it far more profitable to send them back empty than to refill them.

There are signs that the soaring freight rates are boosting the cost of some foods. White sugar prices surged to a three-year high last month, and delays in food-grade soybean shipments from the U.S. could mean higher tofu and soy milk costs for consumers in Asia, said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance.”

Chuck Again…  Yes, one would think that to be in the shipping business you would want to send a container filled with goods, and have your trading partner send it back filed too… But I figured out a long time ago to not question the motives of the Chinese… Shoot, they have 100 year plans! We worry about what will happen in 3 months!

Market  Prices 2/4/2021: American Style: A$ .7606,  kiwi .7172, C$ .7798, euro 1.1998, sterling 1.3581, Swiss $1.1081, European Style: rand 15.0674, krone 8.6303, SEK 8.4550,  forint 296.95,  zloty 3.7508,   koruna 21.6262, RUB 75.97, yen 105.30, sing 1.3370, HKD 7.7526, INR 73.98, China 6.4584, peso 20.33, BRL 5.3608,  Dollar Index 91.44,  Oil $56.08,   10-year 1.13%, Silver $26.65, Platinum $1,085.00, Palladium $2,319.00, Copper $3.54, and Gold… $1,814.60

That’s it for today… It wasn’t a win-win night, as the St. Louis U. Billikens lost their basketball game, as they still showed rust from not playing for 3 weeks until this past weekend… Our Blues will be back on the ice tonight with their 2^nd of 2 games VS the Ducks…  I hope they don’t make tonight’s game as frenzied at the end as they did Tuesday night’s game…   This Sunday is Super Bowl Sunday, with the K.C. Chiefs playing the Tampa Bay Bucs… The Chiefs are going for back-to-back Super Bowl wins, which is actually kind of rare… So, they have that going against them, and they’ll face the QB who’s won the most Super Bowls, Tom Brady…  I’m not a Brady fan, never have been, and so my alliance with the Chiefs is even stronger because of that… Cat Stevens takes us to the finish line today with his song: If You Want To Sing Out, Sing Out….  “if you want to sing out, sing out, and if you want to be free, be free, ‘cause there’s a million things to be… “   I hope you have a Tub Thumpin’ Thursday and a Fantastico Friday tomorrow, and please Be Good To Yourself!

Chuck Butler

February 3, 2021

* Currencies can’t find a bid or offer… 

* All hail, the almighty Mario Draghi, is back! 

Good day… And a Wonderful Wednesday to you! Another cold front has come this far south again, and yesterday, was downright chilly… 61 degrees… And today it’s not supposed to get any warmer, but then that will be it, the cold front will be gone, and warmer, regular weather will return… I’m always amazed when the temp drops this far south… Every Winter from 2001 to 2015, I spent a week in Orlando for the Money Show. Back then Alex was a young boy, and so we would either come early for the show or stay after the show, and go to the Amusement Parks with him… By Age 9 Alex could have had a job as a tour guide at Disney World! A lot of good memories, for sure…  The Great Al Stewart greets me this morning with his song: Time Passages… 

Well, yesterday I was put in my place with one sentence by the well respected analyst, Dennis Gartman, who said, “I hate to say this but you are terribly wrong regarding Gamestop/Silver/Wall Street and the public.”…  Whoa there partner! Just what was I wrong about?  Dennis said, “i tried to explain that the firms in question had capital requirements to meet as the single most important imperative.”  Well, didn’t I do just that, in the FWIW section yesterday? Oh well, I respect what Dennis has to say, so I’ll be careful going forward!

Dennis did give me this little nugget of info and opinion, “The yield curve continues to widen and that shall of course serve the banks well.  The long bond presently yields 1.87% and that is headed toward 3% in the coming several months. The devastation to the bond market will be enormous for the “value of an 01” at these levels is massive.” – Dennis Gartman

OK… For now the dust has settled on all the commotion that went on last week with short squeezes… I read a report/ article yesterday that talked about how the Redditt folks are split on how to go about stopping the short squeeze…  that’s no plan in my opinion… But… like I said yesterday, these folks have done a good job in bringing the dastardly things these hedge funds do, to the public’s eye…  And Ed Steer tells me this morning, that my thought on the masses buying the silver ETF would require the trust co. to buy mass quantities of physical Silver, is in play as 56.8 Million ounces of Silver was added to the ETF this week…  I really don’t want to talk about them or Robinhood or whatever any longer… So, let’s move along, these are not the droids we’re looking for…

Well, there was little to no movement in the currencies yesterday, as the dollar traders remain between a rock and another rock…  But the selling in Gold was one of those, “I’ll see your $17 raise in Gold and raise it to a $24 sell off”…  I can hear the price manipulators chuckling and saying neener, neener, neener! And Silver, after yesterday’s $2 selloff is now cheaper than it was when  the Redditt crowd said they needed to go after the shorts in Silver…   YIKES! Say it ain’t so Joe! 

There was very little going on overseas yesterday and throughout the night… In fact the news from overseas has basically dried up, and blown away… The European Central Bank (ECB) can’t match the Cartel, I mean the Fed, and The Bank of England (BOE) is still mulling over going negative with deposit rates… China and Russia continue to under mind the dollar at every opportunity that presents itself to them. But there’s nothing new here… We’ve gone in-out-and all about and through China and Russia’s desire to dedollarize…  They certainly don’t show up at the Treasury Auction window with empty bags for their purchases of Treasuries any longer… And eventually this is going to come to a head  at the Treasury…  But for now, things move along…

One thing from overseas that caught my attention was the news that former ECB President Mario Draghi was named the new Prime Minister of Italy.. The markets there are overjoyed, as they believe their savior has arrived…  Reminds me of years ago, when Italian legislator, Silvio Berlusconi kept coming back to stage, and each time the people of Italy would rejoice… but things never changed, it was the same-o, same-o all over again… I’m just saying..  This song keeps coming into my brain… My boyfriend is back and you’re gonna be sorry…  

After seeing a strong move downward for the 10-year Treasury’s yield, (down to 1.01% last week,) the yield of the bond has moved higher once again to 1.11%… I know it doesn’t seem like much, 10 basis points, but… when dealing with bond,  small moves equal recognizable moves in price… And remember bonds trade like this… As the yield goes higher, the price goes down, and as the yield drops the price of the bond goes higher…  I was taught at an early time in my career in the Financial arena which began in 1973, that I should always pay attention to what bond yields are doing…  Well, in the past year, there’s not been much to watch, and yields dropped to record lows, and have remained low since then, but as Dennis Gartman points out above, the yield curve on the long end is seeing yields rise, thus widening the spread in the yield curve…

Man can you believe that in 2 years, I’ll be celebrating 50 years in finance…  I know, I’m retired now, but… I’m still writing about it, so that counts in my book! HA!

I used to tell the audiences when I spoke about my past experience and then say, “I know you are thinking, he doesn’t look THAT old!” HA! 

OK… the price of Oil is rising again reaching the $55 handle for the first time in almost a year…  I do believe that our friends (NOT!) at OPEC announced another production cut  last week, so this is the pop in price they were hoping for… of course about a year ago, when they cut production they announced that they thought the price would rise to $60… But then the world as we knew it ceased to exist… And in the summer of last year, we actually saw a day when the price of Oil went negative!!! But that was a refinery delivery problem that didn’t last… But you get the gist, the price of Oil has had nowhere to rise, due to the lack of demand, which should be picking up again, but still not anywhere near where it was before the third week of March last year.

The U.S. Data Cupboard today has the ADP Employment report for January, a precursor to the Jobs Jamboree which will be held on Friday this week. Let’s circle back to last month when the ADP report printed and showed a negative 123,000 jobs for December…  Well, this month the so-called experts think that ADP will show 48,000 jobs created in January… Sill not something to write home about here… 

And other than the ADP report, there’s nothing else in the cupboard today… We will have a mass invasion of the Cartel, I mean Fed heads our speaking today… Bullard, Kashkari, Evans, Meister, and Harker will take to the podiums and give their opinions on whatever they decide will be the topic of the day…  

I have to say that while in the days gone past that we never even knew who the Cartel, I mean the Fed Heads were, and now they’re out speaking all the time, I really believe that they are losing credibility by the day…  I guess we’ll see today, if they say something that should move the markets and we see no reaction from the markets… 

To recap… The currencies can’t get out from between two rocks, and yesterday marked 5 consecutive trading days where there was little to no movement in the currencies. Gold & Silver, on the other hand, did move, but in the wrong direction… Reversing the previous day’s gains, Gold lost $24, and Silver lost $2 the day…  56.8 Million ounces of physical Silver were deposited at the Trust Co. for the Silver ETF…  But even this news couldn’t cheer up Silver yesterday…  The price of Oil is rising, and so are the yields in Treasuries, and all hail! Draghi is back in Italy! 

For What It’s Worth…  It’s been “Silver Week” here at the World Headquarters for the Pfennig…  HA!  And so today’s FWIW is about the U.S. Mint’s rationing of Silver coins, because the demand is too strong…  And you can find that article here: U.S. Mint Still Rationing Silver Coins Amid ‘Exceptional’ Demand (yahoo.com)

Or, here’s your snippet: “The Reddit-fueled run-up in silver prices might be stalling, but the U.S. Mint said it is still rationing its sales of silver coins because of “continued exceptional market demand,” as well as limited supplies and manufacturing capacity.

The Mint is also allocating gold and platinum coin sales to authorized purchasers, it said in a statement Tuesday. The policy will be in place “for the foreseeable future.”

The mint’s silver coin sales jumped 24% to 4.775 million ounces last month, marking the highest for a January since 2017. The Mint’s announcement comes after retail sites were overwhelmed with demand for bars and coins. Investors on Reddit ignited a buying frenzy that roiled precious-metals markets and squeezed physical supplies. Some dealers said over the weekend that they were unable to process orders until Asian markets opened because of record demand.

Throughout the past year, and in part due to the effects of the coronavirus pandemic, the Mint was unable to meet demand due to precious metal blank availability and plant capacity issues.

The Mint also said it will have a limited production window to produce current design American Eagle gold and silver coins, as it’s scheduled to start production of redesigned coins in the summer of 2021, and coins for that program must be produced in advance of the launch date.”

Chuck again…  pity isn’t though, that Silver could be experiencing all this demand and can’t find a bid?  I find this example of price manipulation to be what we used to say on the basketball playground… “In your face, disgrace”… 

Market prices 2/3/2021: American Style:  A$ .7617,  kiwi .7195, C$ .7816, euro 1.2016, sterling 1.3635, Swiss $1.1118, European Style: rand 14.9884, krone 8.6319, SEK 8.4328, forint 296.03,  zloty 3.7362,   koruna 21.5785, RUB 75.89, yen 105.09, sing 1.3335, HKD 7.7511, INR 73.02, China 6.4571, peso 20.14, BRL 5.4008,  Dollar Index 91.21,  Oil $55.17,  10-year 1.11%, Silver $26.80, Platinum $1,097.00, Palladium $2,312.00, Copper $3.52, and Gold… $1,835.80

That’s it for today…  a nice win last night for our Blues, as they held on to their lead at the end with some frenzy play in their end… Well, it’s all systems Go, for MLB, and spring training will begin as scheduled and no delay…  Now, baseball needs to get us our tickets!  I was really surprised that the well known Dennis Gartman reads my humble little letter… And that got me thinking about well known analysts that could be reading the Pfennig…  The sky on the horizon is orange this morning, as the sun is getting ready to rise…  Oh, and Phil the Groundhog did see his shadow yesterday, which means 6 more weeks of winter this year! That is if you believe in that stuff…  I used to have a woman that worked for me, Kate, that was a big believer of Groundhog day. She would have parties, and really was into this Groundhog Day thing…  That was so long ago, I’m surprised I remember it! But isn’t that normal to be able to remember what happened 30 years ago, but not what you came into a the room for? Story of my adult life right there in a nutshell!   Ok, Neil Young takes us to the finish line today with his song: Needle and the Damage Done.. I used to play this song on my guitar… I wonder if I recall how it’s done? Oh well, a problem for another day… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself! 

Chuck Butler

 

 

 

February 2, 2021

* Gold & Silver rally on Monday, get sold on Tuesday

* Dollar Traders are between a rock and another rock! 

Good Day… And a Tom Terrific Tuesday to you! And It’s Groundhog Day!  Well, we saw day one of the Reddit WSB folks go after the Silver shorts. But then the short sellers came back and pushed the price of Silver back below $30, for the day… This will be day two, I wonder what it has in store for us? No Mizzou, or St. Louis U., or Blues on TV last night, so I pulled out my current Harry Bosch Book and picked up where I left off… Then I decided to check the markets and see what there was that I could talk about today…  And just about everybody and their brother was talking about The attack on the Silver Shorts… So, I’ll talk some more about that this morning, and the usual fare… No long essays like yesterday, I can proise you that! The Ozark Mountain Daredevils greet me this morning with their song: Jackie Blue… 

Alrighty then… So, the Redditt WSB folks had some fun yesterday, mostly in the Asian markets Sunday night/ Monday morning.  Yesterday, I told you that I thought that these folks could push the price of Silver higher, but without a delivery process of the metal, bringing the COMEX to its knees, I didn’t think they would be able to rid the markets of the short sellers of metals…  Well, I still stand by that thought, although I did think of a way it could work…

If they bought the SLV ETF, in mass quantities it would cause the trust company for the ETF to have to buy large quantities of physical Silver for their vaults to match the ounces held in the SLV ETF. This could act as the delivery method… and as long as the price of Silver continued to go higher, then the shorts would be squeezed, but I still don’t think it would drive them away to the sewers with the other rats, where they belong!   Or, if the youngsters doing the buying were to actually take a wealth position in physical Silver… And not treat it like a commodity, but a store of wealth, that would work… So, you’re telling me there’s a chance? Yes, that’s what I’m telling you… It would be a longshot, but as I told my good friend Rick yesterday, “This is a fight between We The People and the casino bullion banks”

If anything, the Redditt WSB folks have brought the naked short sellers to the public’s eye, and now more and more people are aware of the dirty deeds done dirt cheap, by the price manipulators!

OK… now the markets, which besides Gold & Silver were dead as door nails…  I had mistakenly said that the euro was rising yesterday morning, when it was really running in place, and kept running in place all day. The dollar traders are really between a rock and rock… They know that right here, right now, the dollar should be getting sold… but then they keep hearing economists say that the 2^nd half of this year will be rip roarin’ economic growth, and that would mean they should be long dollars…  But for 6 months before what these knuckleheads are thinking will be rip a rip roarin’ economy, and then find out it’s not?   Seems to me to be a real layup if I were a dollar trader… I would be selling my stock of dollars and buying something… But certainly not be long dollars in anticipation of what “could be, and probably won’t be”… 

Gold couldn’t hold its early morning gains, but still held on to a $13 gain to close at $1,862.20, and Silver did the same holding on to a $1.57 gain to close at $29.55…  so I read yesterday, that Silver dealers are already seeing supply limitations, and rising premiums for coins and bars…  You see, what the WSB folks didn’t think about is how many people are involved in this keeping a lid on the price of Silver & Gold….   The Bullion banks can simply say there’s demand for the metal and begin jacking up the premiums and minting prices to make, in this case, Silver more expensive…  Dirty deeds, done dirt cheap!

And when they show Silver coins at a metals dealer’s shop on the 10:00 local news, you know that the message is getting through… But when the Uber driver asks if you own any Silver, well, that’s a different direction….

In the overnight markets, it’s been a different story for Gold & Silver, as they have been sold so heavily that all their gains from yesterday have been wiped out.. Gold is down $17, and Silver is down $1.73 today… You don’t think… Nah, that couldn’t have happened so quickly… But maybe, just maybe, ’cause you never know…  That the short sellers went in big time to show these youngsters a thing or two about trading…  If that’s the case, then it was nice knowing you defenders of the assets sold short… 

Every thing is down today… Bonds are down, currencies are down, and metals are down… So I guess I can’t say “everything is down” because the price of Oil has jumped to a $54 handle in the last 24 hours, from the previous level of $52… And for those of you who give two hoots, the stock futures are up this morning, indicating a good day for stocks… 

I talked yesterday about how Personal Spending has gone south of the border for the last 3 months, totaling a 10% decline…  And I don’t think I put enough emphasis on that number…  And like I said sarcastically and they expect me to believe the same period GDP was up 4%?   Think about that for a minute folks… In the U.S. Consumption or Consumer Spending is the bulk of the formula for GDP, and without spending/ consumption, there’s no freakin’ way that GDP was that strong!  I know, I know I’m simply using logic again… I don’t sit in a smoke filled room with a green plastic shade on my forehead, figuring out ways to deceive the people of the U.S.  And in my mind that’s exactly the scenario that goes on!

The U.S. Data Cupboard got right into the job of printing economic data yesterday, when the ISM (manufacturing index) Index fell from 60 to 58… And that was for January… There were more business shutdowns in  December so that all makes sense, but what I question is why it didn’t fall further?  Oh well…  We were supposed to see motor vehicle sales for January, but I guess the print was not ready for prime time…

Today’s Data Cupboard goes back to empty, but we will have 3 Cartel, I mean Fed, speakers: Kaplan, Williams and Meister on the speaking circuit today… I would look for them all to be whining and crying about how the economy needs those stimmy checks…

To recap… The currencies did nothing yesterday, and Chuck believes currency traders are between a rock and a rock… Gold & Silver couldn’t hold their early gains during the day yesterday, but still had good gains to close out the day… Silver hit a multi-year high, and Chuck decides to explain how the Redditt WSB folks can achieve their goals… the anti-dollar assets are getting sold overnight though, indicating that this could be an ugly day…  And Chuck revisits the Consumer Spending reports from yesterday… And today’s letter is much, much shorter!

For What It’s Worth… Well, I have a follow up article to the one I had yesterday, regarding the Robinhood brokerage problems…  I know all the conspiracy folks think that Robinhood had to shut down trading to help the Hedge funds… But it goes deeper than that folks… With all the newfound activity Robinhood was required to put up more collateral at the Clearing Corp. (DTC) And that story can be found here: Why Robinhood Had to Risk Infuriating Its Customers – The New York Times (nytimes.com)

Or, here’s your snippet:” Robinhood faces a loss of confidence from customers. After becoming the venue of choice for small investors, the app risks alienating a core customer base — and feelings of betrayal over the trading limits may be harder to address than annoyance over technical outages. (Small groups of protesters gathered in New York and outside Robinhood’s Bay Area headquarters yesterday.) “Brokers are now ‘protecting’ customers as a façade so that they can appease their institutional backers,” one individual trader told Bloomberg. “The entire community is outraged.”

The surge in trading forced Robinhood to raise cash. As waves of investors poured into the markets, Wall Street’s central clearing hub, the Depository Trust and Clearing Corporation, demanded billions more in collateral from brokerages to shield it from the volatility. Robinhood, which had already drawn millions from its credit lines to meet margin requirements, turned to existing investors for additional capital so it wouldn’t have to impose further limits on customer trades.

A more detailed explanation: Brokerages post money with the D.T.C.C. to cover customers’ transactions while they wait for the trades to settle. With such a big surge in trading, the clearing hub wanted more assurance: “It’s the D.T.C.C. saying ‘This stuff is just too risky,’ ” said the Bloomberg Intelligence analyst Larry Tabb.

Other online brokerages also cited the D.T.C.C. as a factor in decisions to impose trading restrictions.”

Chuck Again…  I know these problems are usually not my cup-o-tea, but this is BIG NEWS folks… And I’ve had my fun throwing shade on the Robinhood crowd, but in this case I do believe they are in the right, demanding that their trading platform accept the trades they are entering! 

Market Prices  2/2/2021: American Style: A$ .7608,  kiwi .7160, C$ .7805, euro 1.2030, sterling 1.3673, Swiss $1.1136, European Style: rand 14.9701, krone 8.6048, SEK 8.4403,  forint 295.51,  zloty 3.7424,  koruna 21.6408, RUB 75.85, yen 105.05, sing 1.3326, HKD 7.7515, INR 73.08, China 6.4611, peso 20.21, BRL 5.4547,  Dollar Index 91.14,  Oil $54.80,  10-year 1.11%, Silver $27.82, Platinum $1,101.00, Palladium $2,340.00, Copper $3.50, and Gold.. $1,844.70

That’s it for today… Well Phil the Groundhog will be poking his head out to not see his shadow very soon this morning…  Not seeing his shadow means spring will be early… And I’m betting a shiny quarter that those folks up in the northeast, would be glad to hear that!   The Cardinals made a blockbuster trade this weekend that was finalized yesterday. The Cardinals get the best 3^rd Baseman in baseball, and the big bat they’ve longed for, by trading for Nolan Arenado…   Yes, we had to give up some young talent, but we needed a 3^rd baseman that could hit, and we got him! Arenado on one corner of the infield and Paul Goldschmidt on the other corner!  And I received an email yesterday morning from the folks at Roger Dean Stadium telling me that the tickets sale was going to be delayed… UGH!  I am amped up about this trade, and now really can’t wait for pitchers and catchers to report!  Jimmy Cliff takes us to the finish line today with his song: Hello Sunshine… “Will old darkness be my friend. Hello Sunshine To this you can put an end.”    I hope you have a Tom Terrific and shadowy Groundhog Day, and Please Be Good To Yourself!

Chuck Butler

February 1, 2021

* Currencies have drifted since last Thursday.. 

* Will WSB go after the silver short sellers? 

Good day… And a Marvelous Monday to you!  And Welcome to February! Well, I spent the weekend, basically in my recliner, as I was sick with stomach problems since Friday. Yesterday, I finally got brave and went out to the deck for a couple of hours to read. Thank goodness for that, as I hadn’t been in the sun for two days! It was a good weekend sports wise, as my beloved Missouri Tigers won their basketball game on Saturday, and the Blues won back-to-back, belly-to-belly games in Anaheim… Since I slept most of yesterday, it was no problem staying up to watch the hockey game last night! The moon was full this past weekend, and I love to watch it rise, in what appears to be, out of the ocean, as a big orange ball, and then rise to the sky and reflect a white beam of light on the ocean.. .I guess for some people this would be a romantic scene… But not for me, for I was here alone! Poor, poor pitiful me! HA!  The great Van Morrison greets me this morning with his song: And It Stoned Me…

Ok… what a week it was, last week for the Wall Street Bets (WSB) folks…  They took on Wall Street, and won! That doesn’t happen much, but it did last week, and guess who the WSB folks are thinking of going after now? The Silver shorts…   I mean just the thought that this could happen helped Silver really push higher on Thursday and Friday. I have two thoughts on this whole shorting stuff…

First of all, the almighty hedge funds had shorted more GameStop shares than there were existing… THAT IS ILLEGAL! When you short a stock, you borrow the stock from a brokerage that has the stock long in margin accounts. When you buy on margin, you sign a margin agreement that gives the firm the right to use your stock, not all of it, for borrowing purposes…  In the old days when I ran a margin dept. we would get the call from the cashier that we needed to get more stock pledged to the bank. So, I digress here….  Since you need to be able to borrow the stock to sell it short, you obviously can’t sell more than there is available… But the hedge funds did just that! Where’s the SEC?   I’m furious about this, rules are rules, and if you can’t enforce them, why have them? 

The second thought on this is that I’m somewhat skeptical that the WSB folks will go at the Silver shorts like they did GameStop…  But let’s review the status of this Silver short…  There are more ounces of Silver sold short on contracts than is available above ground…  Now, if you aren’t supposed to be able to sell more stock than is available, shouldn’t it also be the same for a metal?  The answer in my mind is yes… But again I digress…  it would currently take more than 180 days of Silver production to equal the short ounces on contracts…  Now, haven’t I always contended that the way to drive the short sellers away is to have truckloads of physical Silver bought and need to be delivered?   So, how would the WSB folks go after the short sellers?  I would imagine since they all like to buy stocks on their phones, that they would buy paper contracts, or maybe Silver ETFs… And that might drive the price of Silver higher, but unless there’s a required delivery at the end, then I don’t think they’ll get much traction on getting the short sellers to go away..  But, it’s worth the old college try?, eh?

Ok.. a lot to talk about at the get-go this morning, and I’m not finished! But… first we’ll talk about what happened in the currencies and metals on Thursday and Friday last week… For the currencies it was two days of nothing… absolutely nothing, say it again!  The currencies for the most part drifted along and didn’t gain much, didn’t lose much, to end the week…  They begin the week wearing the same clothes as last Friday…  Gold & Silver rallied both days late last week, and begins the week on a flyer.. Gold closed on Friday at $1,849.10, and Silver at $27.08 ….

This will be a very interesting week, IF the WSB folks are going to go after the Silver short sellers, because with Silver trading above $27, at the close on Friday, this would normally be about the time for the short sellers to show up at the COMEX with their arms full of short Silver paper trades…  I hope there is a meeting of the two forces to see who wins…

If anything, the WSB folks have given the JPMorgans, etal, the thought that there could be some resistance to their selling Silver & Gold short…

In the overnight markets things have begun to get shook up… The euro is rising, taking most of the currencies along for the ride. But the focus this morning is on Silver… Silver is up $2 in the early trading and is trading at $30.33 as I write… this has been a long time coming, and it’s going to be a long time gone (CSN)…  Gold is also rising this morning, up $18 in the early trading…  So, the pressure on the short sellers of the metals is already showing up.. 

Last week I went all upset on the idea that the markets look forward… Saying that it appeared to be a think of the past… And then I began to read report after report talking about how the U.S. economy is gong to rebound big time in the 2^nd half of this year…  And here’s where I’m going to go off track again and let ‘er rip! But before I start, I want to make it perfectly clear that I don’t want to see these things happen in our economy, but what I want to see and what I do see, are two different things…

I’ve done a lot of thinking lately about all the calls you hear from economists and people that should know better, or maybe not, that once the vaccines are administered to everyone, that the economy will return to normal… Really?   Here’s the thing to think about… All the things that people think will get back to normal, just isn’t going to happen overnight…  Ok, so you missed getting haircuts once a month, are you going to go out and get 2 per month to start to make up the deficit?  You used to get a manicure/ pedicure once a month, are you now going to get one per week?  The answer is no.. . The thing that really gets me is that we were a services economy, right? And we shut down non-essential services, right? How does that work out?  So, we open up the non-essential services, and what do we find out? We find out that during the plandemic, most people learned how to fix things, repair things, create things, make things, etc. and will no longer need a lot of those returning non-essential services…   I began to think about all this stuff when I heard an economist say that there is pent up demand and that in the 2^nd half of this year we will see a very strong economic recovery, and therefore that’s why the markets are so strong, and the dollar is recovering, because they are looking forward to the soaring economy in the 2^nd half of this year…

And the other thing to think about with regards to all this, is that the U.S. Consumer has gone about repairing their balance sheet during the plandemic… The savings rate is up 10% in the past year… Credit card debt is down big time, so kudos to U.S. Consumers, and I really do believe that the mindset of people is to make sure they are prepared financially for another shutdown, should one every come again…  And so, who’s going to go out and spend this pent up demand when the all clear horn sounds? And the other thought that you need to think about is that during the plandemic people bought the big items they wanted / needed instead of spending money on eating out, and traveling.  Those big items aren’t going to be needed to be bought again are they? No… So, while the spending on eating out and traveling goes up, the spending on the big items goes down…  The great economist, David Rosenberg, calls this pent down demand… 

I reckon this is very similar to your grandparents, who lived through the depression, or your parents, either one… We’re they all scared that another one could happen, and that savings were the most important thing in wealth accumulation?  And not having debt!  I know from personal experience that both cars at our house are 10 years old…  But I’m not going to get something newer now… Those cars will have to go until they don’t!  And maybe by then, things will be clearer financially in this country…

But… I don’t think all this will become apparent until the we get to the 2nd half of this year, and all the goodness people are expecting just isn’t there, then the light bulb over the collective heads of traders will come on and they’ll say… “That Chuck guy was right!” HA! 

Well, I’ve certainly had a lot to say today, eh?  Oh, and I’m not finished!

The U.S. Data Cupboard late last week had some not so good data, that should have put some pressure on the dollar, but it didn’t… Go figure, right?   Let’s pick it up with the Leading Indicators that fell to .3% from .7%, last month… The Initial Weekly Jobless Claims fell back to 845,000 after two weeks of rising claims…  There’s still 18.3 Million people on continuing claims…  And the 845,000 while down is still larger than the highs in the great recession of 07-08…   The 4^th QTR GDP printed at 4% growth, which to me seems way too high, but even with this number it wasn’t enough to pull the annual rate of GDP for 202 out of the red… The 2020 GDP printed a negative 3.5%, the largest drop in 74 years… Yes, not since 1946, had we seen GDP drop by this much… 

Of course the plandemic had a major share of the cause for this drop… But it’s not like can say, “if the plandemic didn’t happen”…  Because it did happen, and is still happening! Now , we have to see just how we dig out from this deep hole… and remember what I told you last Thursday, that the 4^th QTR GDP would have 3 more revisions before set in stone… And I would bet a shiny quarter that there will be 3 downward revisions…

On Friday, we saw Person Income & Spending… Personal Income was up .6% in December… Interesting because Personal Spending was down .2%, which put the final 3 months of 2020’s Personal Spending down 10%…  And they expect me to believe that the same period of time GDP was up 4%?  Hey U.S. Gov’t! I WAS BORN… I Just wasn’t born yesterday!

To recap…  The end of the week last week saw no movement in the currencies, and we’ve begun the week with bot currencies & metals on the rise VS the dollar.  Gold & Silver saw some gains to end the week, with Silver outperforming Gold, as there were words being spoken about the WSB folks turning their attention to the short sellers in Silver..   And Silver really has gone on a flyer this morning! Chuck goes Professor Charlie Butler in today’s letter with explanations of short sales, pent up demand, and other things on his mind…  You won’t want to have missed that, so go back now, and read it! HA!

For What It’s Worth…  Longtime readers know I’m no stock jockey, and I rarely talk about stocks, with today’s rant about short sellers the exception… But this article came to me from a dear reader, that after spending all that time talking about the WSB folks above, I thought this would play nicely in the sandbox. And it’s about the Robinhood crowd running into a roadblock… BIG TIME  And it can be found here: Robinhood Caps Maximum Holdings In 36 Stocks To Just One Share | ZeroHedge

Or, here’s your snippet: “Something bad is about to go down at Robinhood.

One day after the company drew down on its bank lines and obtain a $1 billion rescue capital investment, the company found itself in lockdown mode, allowing just a handful of shares to be bought at a time, effectively shutting down in all but name (it couldn’t risk another day of furious public outcry and massive client departures if it blocked trading completely).

However, just before the close, things got downright surreal when in a blog post the broker – which should probably change its name from Robinhood to Suit – made a shocking announcement: going forward, customers will be subject to maximum aggregate limits in 51 securities of which 14 are capped at position limits of just 5 shares, while allowing total holdings in 36 securities to be just one share!

In other words, as of this moment, no client is allowed to one more than 1 share in many others. Even boring, low vol names are limited to just one share.

Panicked clients who are wondering if this means that their current holdings which exceed 1 laughable share will be forcefully liquidated can breathe for now: the company said that “outside of our standard margin-related sellouts or options assignment procedures, your positions will not be sold for the sole reason that you are currently over the limit. However, you will not be able to open more positions of each of these securities unless you sell enough of your holdings such that you are below the respective limit.” (we expect that to change on Monday, if the company is still around.)

In other words, virtually nobody can buy any new securities.”

Chuck Again…  with some help from Golden Earring… Help I’m steppin’ into the twilight zone

The place is a madhouse, Feels like being cloned

My beacon’s been moved under moon and star Where am I to go, now that I’ve gone too far?

Soon you will come to know When the bullet hits the bone”     That’s how I feel after witnessing the hedge funds getting taken to the cleaners last week, and the Robinhood crowd getting basically shutdown…   The Twilight Zone for sure!

Market Prices  2/1/2021: American Style: A$ .7640,  kiwi .7180, C$ .7812, euro 1.2085, sterling 1.3720, Swiss $1.1177, European Style: rand 15.0038, krone 8.5848, SEK 8.3997,  forint 294.68,  zloty 3.7250,   koruna 21.4957, RUB 75.91, yen 104.80, sing 1.3312, HKD 7.7528, INR 73.15, China 6.4267, peso 20.30, BRL 5.4615,  Dollar Index 90.84, Oil $52.69,  10-year 1.07%, Silver $30.33, Platinum $1,127.00, Palladium $2,352.00, Copper $3.52, and Gold.. $1,867.10

That’s it for today… Well, we start the week and month with some major stories waiting for answers and that should make for an interesting week, eh?   Tomorrow morning will be Groundhog Day, which is also the title of one of my fave movies!  And no, it’s not just because Andie McDowell plays a lead! But it does play a big part of it! HA! Well, I’ve been all by myself, for 10 days, this being the 11^th day… I’m kind of glad Kathy wasn’t here for my 3 days of sickness. I don’t like for people to see me sick. I have my reasons that I won’t get into now… When I was out on the deck yesterday, a woman from the condo came out and we talked like we normally do. Her name is Annette, and she asked me where my cooler of beer was?  I then explained why it wasn’t there, and then told her, to not feel bad about asking! Another beautiful moon rise last night… in the words of Moon Man Mike Shannon, It’s a beautiful full moon here tonight, I hope it’s a full moon wherever you are” The Marshall Tucker Band takes us to the finish line today with their song: Searchin’ For A Rainbow… “and if the wind ever shows me where to go, you’d be waiting at the end and I know, I’d see the hill with that pot of gold.”  I hope that song remains in your head all day, now, for I love me some Marshall Tucker Band!  I hope a Marvelous Monday is in your day, and Please Be Good To Yourself!

Chuck Butler

January 28, 2021

* not a good day for the currencies & metals… 

* Why don’t traders give two hoots about the Cartel’s balance sheet? 

Good day… And a Tub Thumpin’ Thursday to you! Yesterday morning, after sending out the Pfennig, I was really draggin’ the line, and closed my eye, and the next thing I knew I had slept until 11 am… it was “one of those days”… Then I got up, and went outside where it was full sun, and 85 degrees, I stayed outside for about 2 hours, and then decided it was time to get out of the sun! I heard the news yesterday oh boy… That my spring training buddies are bagging me this year… Which means that Kathy will have to go to all the games with me, and I can tell you right here, right now, that she will not enjoy that one iota! One game here and there, OK… Day after day of games, no thank you, as far as she’s concerned… And now we’ll be sitting in the sun for the games with masks on… That will be uncomfortable for sure! There will only be 1,000 fans at the games in the ballpark, so it’ll be like being at a Marlins game! HA!  Al Wilson greets me this morning with his song: Show and Tell… “That’s a game I play when I wanna say, I love you”… 

OK… Well, it was not a good day for the currencies & metals.. No, it wasn’t one of those engineered takedowns for Gold, but the shiny metal did lose $6 on the day… The currencies gave back about 1/2-cent to the dollar across the board, and the Dollar Index closed at 90.67… Up from the early morning reading of 90.47. 

As I peruse the currency screen I’m taken aback by how much ground they’ve lost this week… Shoot Rudy, even the Chinese renminbi and Japanese yen have given back recent gains VS the dollar!  And like I said yesterday, ever since Gold rose by $32 last Wednesday, it has seen small drops every day…  

The day was dominated by the FOMC meeting and press conference that followed no rate change announcement. Cartel, I mean Fed Chairman, Jerome Powell was doing his best imitation of Dr. Fauci, and this ended up being the most important thing he said, “There’s nothing more important to the economy right now than people getting vaccinated.”  I wonder how the media will react to those comments when in 5 years, we find out that the vaccine shouldn’t have been given, especially to elderly people…  OK… I don’t know this to be a fact… So, stop right there with your nasty email to me! I’m just speculating… Remember a couple of months ago, when the vaccine came out, and I said then, what happens when a new strain of the virus appears?  I didn’t know anything more than anyone else at that time, I was just speculating, and well… we know the rest…

Ok, now I’m playing scientist… mad scientist at that! So.. Igor… where did I put that syringe?

So.. nothing new from the FOMC yesterday… Rates remain near zero, bonds are being bought.. The Cartel’s, I mean Fed’s balance sheet is now $7.2 Trillion, and I betting that free undercoat that their balance sheet will be $10 Trillion by the end of the year…   That’s $10 Trillion of interest rate expostre folks… This is something that has never been this size before, and it’s only getting larger every day. And nary a word from the Cartel chairman about tapering bond buying…  Like I said the other day, the temper tantrum the markets would throw would be something to behold, if there was tapering mentioned…

But with all that in mind, the dollar bugs ruled the day…  Go figure, right?  The dollar has begun 2021 much like it did most years when it was in the last weak dollar trend… Giving everyone the idea that the dollar will rebound the rest of the year, only to be disappointed as the months went along… But that was during the last weak dollar trend,  it will be interesting to see if the dollar can retain any strength in this calendar year, given all the stuff that’s building up against it doing so.

I read yesterday that the new $1.9 Trillion Stimulus package is making its way through Congress with no roadblocks… So, gotta get those stimmy checks out… because the sooner you get those out, you can begin to talk about the next ones that will be needed…

In the overnight markets… there’s been additional slippage in the currencies VS the dollar and Gold is down $5 in the early trading… Has everyone lost their collective minds?  Give me a break here!  One of the things that was drilled into my head when I first started in the financial business is that “markets/ traders are always looking forward”…  But I truly believe that that thought has gone our the window with the bathwater, for if it were still true, then the dollar would be getting taken to the woodshed..  For what’s coming down the pike is all bad for the dollar, so why aren’t traders “looking forward”?   

In the U.S. Data Cupboard yesterday, we had the long awaited December Durable & Capital Goods Orders, and they certainly didn’t give the economy a warm and fuzzy…  Durables only rose .2% VS the 1.2% in November, and Capital Goods only rose .6%, down from 1.0% in November. So, going the wrong way as far as a recovery is concerned, that’s for sure! 

Today’s Data Cupboard will be a busy little bee, with the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims… Then after the dust settles on that data, we’ll see the first print of 4^th QTR GDP… What ever it prints at, keep in mind that it will see 3 revisions to that number…   And December Leading Indicators finish out the day for Data Cupboard… I suspect that the Leading Indicators number will be down from Nov.  

For those of you new to class, Leading Indicators, and Capacity Utilization are about the only forward looking pieces of data that we see… The CAPEX (Capital expenditures)  is close to being forward looking… But circling back to what I talked about above, what’s the use of looking forward any longer? It’s all about what have you done for me lately!  Instant gratification… What ever phrase you want to you use to say looking forward is dead as a door nail! 

To recap… The dollar bugs ruled the day yesterday, and the FOMC meeting and press conference didn’t yield anything to move the markets…  Powell did his best imitation of Dr. Fauci…  And Chuck has a problem with it… But then Chuck always has a problem with what the Cartel chairman says!  Chuck talks about the Cartels’ Balance Sheet, and how it has exploded higher and keeps growing, with all that interest rate exposure…  Oh, well, people don’t care about the Fed’s Balance Sheet… do they?

For What it’s Worth…  Ok, this is all old news for most of you, as I went through this a couple of weeks ago for the about the 10^th time… But… just like your kids sometimes need another adult to talk sense into them, I have gotten Luke Gromen to talk to you about Gold Price Manipulation… I first came across Luke when he was on a podcast with Grant Williams, and since then I follow him on Twitter, and read his notes whenever he posts them… He’s a very well respective analyst, and he’s here to talk to you and you can find that talk here: Why gold price is not at $6k already and why it was ‘managed’ by the government – Luke Gromen | Kitco News

Or, here’s your snippet: “Gold is a political metal, and competes with U.S. treasuries, said Luke Gromen, president of Forest for the Trees, and because of this, government authorities have historically been trying to “manage the price.”

“It’s a political metal because it competes with the U.S. Treasury bond as a primary reserve asset and so to the extent that gold does well, historically that is a threat to the U.S. government being able to finance its deficits painlessly. So, there has been a need to manage the gold price and that’s not conspiracy theory,” Gromen said. “You can read any number of central bankers at the Bank of England, Greenspan at the Fed, the U.S. State Department wires and cables from the 1970s, they are stating that to be a fact that the gold price needs to be managed.”

Gold has the potential to reach $6,000 an ounce but is being held back, Gromen said.

“Gold collateralization of U.S. foreign obligations went from 20% in 1989 to 4%, 3% at the lows in 2003,” Gromen said.

Should it return to the same 20% level, gold should be trading at $6,000 an ounce, he noted.

I doubt that governments [particularly the U.S. government] are directly involved in the COMEX futures market, but it would come as no surprise to me if they weren’t involved behind the scenes in some way.  And as I said in my January 9th commentary regarding the latest Bank Participation Report, it would not be shocked to see the Exchange Stabilization Fund involved in bailing out some or all of the Big 8 shorts when the time comes.”

Chuck again…  And again I remind everyone that when there’s so much physical demand to buy Gold & Silver the short positions will be squashed, and gone where the gobblins go… Also, I truly appreciated him mentioning the wikileaks cables I’ve talked about for years, where U.S. leaders talk about the need to keep Gold from rising…  It’s all there folks, all the proof you would ever need to know that the Gov’t is behind all this… 

Market Prices  1/28/2021: American Style: A$ .7610,  kiwi .7125, C$ .7781, euro 1.2110, sterling 1.3652, Swiss $1.1233, European Style: rand 15.2370, krone 8.6730, SEK 8.3596,  forint 297.63,  zloty 3.7541,   koruna 21.5538, RUB 75.41, yen 104.35, sing 1.3320, HKD 7.7527, INR 73.09, China 6.4716, peso 20.36, BRL 5.3725,  Dollar Index 90.70,  Oil $52.77,  10-year 1.01%, Silver $25.35, Platinum $1,068.00, Palladium $2,382.00, Copper $3.52, and Gold… $1,840.70

That’s it for today…  I feel much better this morning. Yesterday, when I woke up, I just didn’t feel like doing anything, but I made myself go outside, and I was glad I did, for soon the sun put some life into me! So, back to the real life this morning… coffee is brewing, and soon it will render, that hot concoction that helps me get along… HA!  The Cold front came through overnight, and today we’ll only see a high of 70… poor me, right? HA!  There’ll be Floridians walking around with winter coats on… I’m not kidding! Not all, but some will be bundling up! OK… The next time we talk will be on Monday, Feb 1^st, and I’ll be getting ready to get on the horn and order my ball game tickets!  So, that means this is the end of one of my most dreadly months…  (sp check says “dreadly” isn’t a word, but I say it is!) And there will only be about two weeks before pitchers and catchers report…  The Gap Band takes us to the finish line today with their 80’s song: You Dropped A Bomb On Me… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and Please Be Good To Yourself!

Chuck Butler

 

January 27, 2021

* Currencies gain on Tues, but give back gains overnight

* Gold can’t find terra firma since last Wednesday… 

Good day, and a Wonderful Wednesday to you! After the double win by the Tigers and Blues on Saturday night, they weren’t able to duplicate that last night with a win by the Blues VS Vegas and a loss on the road by the Tigers, VS Auburn…  It was another night of watching one game on the TV and the other on my phone…  The NHL is playing a condensed schedule this year to cut down on travel, So the Blues will play Vegas again tomorrow night…  Strange season so far, with all these back-to-back games VS the same opponent. But, at least they are playing!  Another beautiful day here with a high of 83… Another one of those is in store today, before another cold front comes down from the north… Crosby and Nash greet me this morning with their song: Wind On The Water…  It’s about saving the whales…

Well… The currencies sure didn’t exactly take liberties with the dollar yesterday, but, they did gain small amounts.  To me watching this unfold yesterday, I saw a pattern of traders not willing to take a hard position of being short dollars ahead of the FOMC meeting and press conference that follows the no rate change announcement…  In their heart of hearts, traders know that Cartel, I mean Fed Chairman Jerome Powell, will most likely sound very dovish in his press conference… He has to, for you see that Powell, has whined and cried about the need for more stimulus, and so he has to play the part of the poor Cartel, I mean Fed Chairman, with no tools at his disposal to stir the economy… 

How could he say one day that the economy needs more stimulus, and then the next day talk about how strong the economy is?  If anything, other than being really dovish, is I see a chance of calling the economy uneven, but still with problems, and downside risks…    He has to sound like there’s a little bit of growth, or else the dollar will be sent to the currency woodshed. Traders wanted to take the dollar to the currency woodshed yesterday, but just didn’t have the intestinal fortitude to do so ahead of the FOMC meeting…

So, the FOMC meeting is today, and we’ll know more about what is on the mind of the Cartel, I mean Fed Heads this afternoon…  I tell you I bet I could write the monologue for the press conference this afternoon…  But I’ll be too busy! HA!

Gold lost ground yesterday, while the currencies moved higher VS the dollar… Gold closed down $5.60 on the day to close at $1,851.60, and Silver lost 9-cents to close at $25.55…   What’s up with Gold lately? Last Wednesday Gold rose by $32, and then didn’t see any follow up and have been down by small amounts each successive day…  As I said a week or so ago, the price manipulators did their job, of scaring away potential buyers, and getting short term holders to sell their Gold…  And I think that fear of more price manipulation is scaring away potential buyers still… 

I think what Jerome Powell says this afternoon will weigh in for the direction of Gold going forward… I’m thinking that Gold traders are waiting for confirmation of the $1.9 Trillion stimulus package by Congress, before moving Gold higher…  Memo to Gold Traders: Ahem, Congress and the purse strings of deficit spending are no longer going to be held up by the Senate, the liberals have control of the whole shootin’ match, so go ahead and make your bets on more deficit spending and currency printing…

The same goes for the currencies… And it’s time to get past the fears of a China virus outbreak, and get those commodity prices rising again…  One of the Commodity Currencies, the Aussie dollar (A$) has recently gone through some consolidation, and correction, and moved back to 77-cents, but from that the A$ is moving higher again… The Good Folks at FXSTREET believe the fundamentals are in the A$’s favor, and could climb as high as 80-cents…  I agree with them, that the cards are stacked in the A$’s favor, that is as long as traders can get past the fears…

In the overnight markets, we’re right back to where we started the day yesterday, as the currencies gave back their small gains in overnight markets, and Gold is down $12 in the early trading today…  To illustrate what I’m taking about with the currencies… The Dollar Index was trading at 90.46 yesterday morning, and it closed down at 90.40, but this morning it’s back up to 90.47…    UGH, no traction, no direction, no nothing from these traders who seem to be afraid of the big bad Cartel, I mean Fed… 

Remember what I told you last week that new Treasury Sec. Janet Yellen had said about the Exchange Stabilization Fund (ESF), and intervening in the currency markets… Basically she said that she didn’t believe in intervention and currencies should be left alone to set their own market rates…  This means that one fear factor has been removed, and Currency Traders should be trading the dollar accordingly…  In my opinion that is… 

Longtime reader, Bob, sent me a very interesting article yesterday, that talked about how $7 Trillion of U.S. Debt held by investors, is coming due in 2021…  These maturities will have to be paid out unless of course they are “rolled over”… And here’s where things could get quite sticky… So, what happens if ½ of those maturities don’t want to be rolled over, and demand payment of principal?  That would mean that an additional $3.5 Trillion of debt will have to be refinanced… And with no buyers, the Fed will have to step up to buy the bonds, and print new currency to pay for them…  Got Gold?

The U.S. Data Cupboard finally gets back in the real economic reports printing game today, with the printing of the December Durable & Capital Goods Orders… I suspect these both will be weaker than the already weak prints of November…  We’ve all become Comfortably Numb regarding bad economic prints…  They get shrugged off each time they print, and you have to wonder out loud, just how bad does a print have to be before the market reacts?  

I used to say that we had become Comfortably Numb with the debt numbers, and now we’re way past them, and no one seems to care or give two hoots that we’ve run up $27.8 Trillion in Current Debt, and $159 Trillion in Unfunded Liabilities… that means our real debt is $ 186.8 Trillion!  The mental giants (NOT!) believe that the size of debt doesn’t matter any longer, for now that we’ve learned that the currency printing press can be turned on whenever they feel the need…  And I think that kind of thinking is dangerous… Very dangerous…  

But in reality, they are correct they could print enough money to bring down the debt or pay for any new deficit spending boondoggle… What they aren’t considering that every time you go to the well to print more currency, the current stock of currency gets debased… And well, that means your personal buying power goes to hell in a handbasket… When your personal buying power loses ground, it’s like a big fat TAX… And that my friends is what the problem with this new thought process by the mental giants (NOT!)… 

To recap… The currencies gained VS the dollar on Tuesday, but the gains were limited and were held back by traders not wanting to go too far ahead of the FOMC meeting this afternoon. And those gains were given back in the overnight markets last night…  Gold lost a small amount again on Tuesday, marking small mark downs since last Wednesday when gold gained $32… Chuck thinks that everyone is holding back until they get confirmation of the $1.9 Trillion deficit spending, currency printing plan that’s being billed as a stimulus package… 

Before I head to the big finish today, there was a story that came into my email box yesterday from the good folks at GATA. The article told a story about a Treasure Trove of Gold that was found in a corn field in Poland that had been buried for over 900 years! After hearing a priest tell of the legend of the Treasure, the locals began to excavate and the legend was fact… Pretty cool story if you ask me! 

For What it’s Worth…  Ever since the economy was shut down and locked down last spring, for a few months for some, and still for other states, the rot on the U.S.’s economy vine just keeps getting exposed more and more.. Sure the plandemic had a lot to with this, but… I could go back to Pfennigs last year pre-Covid where I pointed out the weakness that was already evident… So, any way, this article talks about how the poverty rate in the U.S. which had hit a low pre-Covid is soaring again, and it can be found here: U.S. Suffers Sharpest Rise in Poverty Rate in More Than 50 Years (msn.com)

Or, here’s your snippet: “The end of 2020 brought the sharpest rise in the U.S. poverty rate since the 1960s, according to a study released Monday.

Economists Bruce Meyer, from the University of Chicago, and James Sullivan of the University of Notre Dame found that the poverty rate increased by 2.4 percentage points during the latter half of 2020 as the U.S. continued to suffer the economic impacts from Covid-19.

That percentage-point rise is nearly double the largest annual increase in poverty since the 1960s. This means an additional 8 million people nationwide are now considered poor. Moreover, the poverty rate for Black Americans is estimated to have jumped by 5.4 percentage points, or by 2.4 million individuals.

The scholars’ findings put the rate at 11.8% in December. While poverty is down from readings of more than 15% a decade earlier, the new estimates suggest that the annual Census Bureau tally due in September will be higher than the last official, pre-pandemic level of 10.5% in 2019.”

Chuck Again.. yes, the wealth of a nation depends on how weak the poverty rate is… And accordingly the poverty levels are falling, and that’s a bad thing… But shoot, nothing that weekly or monthly stimmy checks won’t fix!  I say in jest!

Market Price 1/27/21: American Style:  A$ .7705,  kiwi .7208,  C$ .7846, euro 1.2111, sterling 1.3703, Swiss $1.1252, European Style; rand 15.2345, krone 8.6212, SEK 8.3443,  forint 297.48,  zloty 3.7582,   koruna 21.4690, RUB 75.26, yen 103.86, sing 1.3275, HKD 7.7519, INR 72.99, China 6.4666, peso 20.17, BRL 5.4172,  Dollar Index 90.47,  Oil $52.65,  10-year 1.02%, Silver $25.23, Platinum $1,081.00, Palladium $2,393.00, Copper $3.57, and Gold… $1,839.00

That’s it for today… Day 6 alone, had me thinking that for the first time I realized I was really alone. I went out to the deck that overlooks the beach and ocean, and looked out on the beach for Kathy, and then realized that she’s not here…  In the words of the Zombies, “Don’t bother trying to look for her, she’s not there”…   Santana also did that song, but you know me, I like the originals! The St. Louis U. Billikens lost their return to hardcourt game last night. They hadn’t played in this calendar year, due to an outbreak on the team… A pretty good game for a team that hadn’t played in 3 weeks… Yesterday, I mentioned a book I’m reading that’s weird, but failed to mention the name of the book… It’s an oldie but goodie, Fahrenheit 451…  Fireman that burns down houses instead of saving houses that are on fire…  I’ll be 1/2  of the way through it after my reading session on the deck this afternoon…  The Main Ingredient takes us to the finish line today with their song: Everybody Plays The Fool…   “it may be factual, maybe cruel, but everybody plays the fool.” I hope you have a Wonderful Wednesday, and Please Be Good To Yourself!

Chuck Butler

 

January 26, 2021

*  Stephen Roach is committed to his call of a weak dollar!

* Chuck navigates through the landmines… 

Good Day… And a Tom Terrific Tuesday to you!  Well, it was pointed out to me yesterday, that I mistyped the A$ price yesterday… Fat fingers are to blame! Seriously, sorry about that, I usually go over them after typing them but I must’ve just breezed right by the A$ mis-price yesterday… For A$ holders, I didn’t mean to cause heart palpitations! This is day 5 of my two weeks alone here… I’m surviving! HA! My former colleagues, Jen, and Christine, used to say that men couldn’t survive alone without their wives… So, every time Kathy goes away, and leaves me alone, I think of them… And Laugh!  I had to go to the pharmacy yesterday, and it was the first time I had put on a mask since traveling here almost 4 weeks ago…  I’m with Tom Woods regarding my thoughts toward face masks, but I comply because… I have to!  The Allman Brothers greet me this morning with their song: Statesboro Blues… “Woke up this morning, had those Statesboro blues…”

And that, I certainly did! Wake up with the blues this morning… But that shouldn’t hang around too long, as I can almost taste the ham, eggs, and cheese I’m fixing to make once I send this out this morning!  When my darling daughter, Dawn and her family come down for Spring Training this year, my granddaughter, Delaney Grace will be singing the national anthem at the stadium before a game! We don’t know which game, just when they’re in town for a week…  Now, THAT will make going to the game even more fun!

Well, it was a day of drifting for the currencies yesterday, they just couldn’t get any traction on rally attempts throughout the day, and ended the day weaker VS the dollar…  Both the currencies and metals seem to be adrift at Sea…  Waiting for someone to tow them to safety… The China-virus outbreak story, continues to be a drag on Commodity prices, and anything associated with Commodities… And now the new strain of the virus here in the U.S. is becoming a problem… I read one guy’s opinion on the virus, and he thinks that we’ll have to live with Covid from here on out…  I sure hope he’s wrong, but, with different strains coming to the forefront every year… Who knows?

So… here’s something that really sticks in my craw…  I read yesterday, that Congress and the President are contemplating sending out stimmy checks on a regular basis…  That would be done, folks, under the guise of “stimulating the economy, when we all know that it’s really Universal Basic Income… The centerpiece of the Magic Money Tree  (MMT) proponents…  Shoot while we’re at it, why don’t we just go out right now, and devalue the dollar now, and get it over with!

Longtime economist that I used to follow very closely, Stephen Roach, recently said, and I quoted him here, that the dollar was going to crash… And he followed that up this past weekend saying: “The dollar’s crash is only just beginning”…    So, come one Treasury and Cartel, I mean the Fed, go ahead and beat the markets to the punch! Devalue now!   

Look folks, I don’t want to see this happening to our currency, the one I use for gas, groceries and giggles, but if we’re going to be moronic and send out regularly scheduled stimmy checks, And not call it what it really is, then  a crash, or devalue is in the dollar’s future… I’m just saying…

Gold couldn’t hold its early morning gains yesterday, and only moved higher by 70-cents, while Silver gave back 13-cents… not a good way to start the week, so let’s use today as the start of the week, ok, gold traders?   Gold & Silver are considered and traded by U.S. investors like a commodity… It’s not, in reality, it’s a store of wealth, that should be bought, stored, and forgotten about…  And then passed down to your kids/ grandkids, with instructions that they not sell it either!  

In the overnight markets…. There was more drifting by the currencies, with the Commodity related currencies really taking on the brunt of the dollar bugs pressure.  Gold is down a buck or two in the early trading, and Silver is up a dime… 

There’s been some interesting movement in the 10-year Treasury’s yield… I say interesting because after a month of rising, the yield is now back on the way down…  Of course this could be a result of a ton of Cartel, I mean the Fed buying…  In case you’ve missed class the several hundred times I’ve talked about this… bonds trade like this, as bonds are bought, the price goes up and the yield goes down… As bonds are sold the price goes down and the yield goes up… So, if there was more buying recently, that would explain the yield dropping to the current 1.04% from 1.15% it traded at as we turned the calendar of the year… 

You know, these days, are getting very tricky for me, in how I describe currency printing, deficit spending, and MMT… This is getting to be very difficult for me to navigate and when it gets too difficult I’ll hang it up… I had a longtime readers send me a note last week, and said that he was very upset with something I said, and that he wanted to unsubscribe…  Wait! What?  What on earth did I say, or better yet, how did I say it, that got him riled up?  I’m at a loss, here folks… My dad taught me, that you can please some of the people some of the time, but not all of the people all of the time… When I started out writing this letter in 1992… My goal was to prove him wrong…  I’ve never achieved that goal, and it looks like I never will!

The U.S. Data Cupboard is still lacking any real economic data today, that will have to wait until tomorrow… But first today, we will see the latest Case/ Shiller Home Price Index, and the stupid Consumer Confidence…  Tomorrow we’ll release the Kraken! Well, we’ll see real economic data in Durable and Capital Goods Orders…

To recap… It was a day of drifting with no real direction carved out for the currencies yesterday. The Commodity Currencies still are facing some selling because of the China virus outbreak story… Gold couldn’t hold its early gains yesterday, and only gained 70=cents on the day…  The overnight markets have been pretty much the same as we saw all day yesterday… Yes, sir may I have another?  UGH! 

Before I head to the Big Finish today, I wanted to talk about this…  In the article I mentioned above from Stephen Roach, I pulled this comment that explains why he sees the dollar crashing let’s listen in: “Based on a wildly unpopular forecast that I made in June of a 35% decline in the value of the dollar by the end of 2021, we are only in the third inning of a nine-inning baseball game. If that forecast comes to pass, it will provide an important exclamation point on the first year in office for America’s 46th president, Joe Biden. There were three main reasons why I argued the dollar would fall: 1) a sharp widening in the  U.S. current-account deficit, 2) the rise of the euro, and 3) a Federal Reserve that would do little in response to any weakness in the greenback. On each of these counts, I have greater conviction on the weak-dollar call today than I did six months ago.” – Stephen Roach

Chuck, thinking out loud…  Opinions are like rear ends, everyone has one, and the best thing, today, that is, maybe not tomorrow, you the reader gets to decide whether you will agree with the opinion or not…  To me, Stephen Roach is singing from the same song sheet as me… So… I agree with his opinion…  I’m just saying… 

For What It’s Worth… OK, I had earmarked a story in the St. Louis Post Dispatch from last week that said that “Thousands of eviction filings are piling up in St. Louis and St. Louis County, leaving landlords and tenants frustrated, and advocates predicting a tidal wave of homelessness to come.”  5,000 eviction notices have been filed since March 2020…  Well, that was a good start to the FWIW article today, that I pulled from Ed Steer’s letter this morning regarding a national view on this problem, and it can be found here: Nearly 20% of renters in America are behind on their payments (cnbc.com)

Or, here’s your snippet: “About 18% renters in America, or around 10 million people, were behind in their rent payments as of the beginning of the month.

It is far more than the approximately 7 million homeowners who lost their properties to foreclosure during the subprime mortgage crisis and the ensuing Great Recession. And that happened over a five-year period.

In one of his first executive orders, President Joe Biden extended the Centers for Disease Control and Prevention’s current eviction moratorium through the end of March, but that is unlikely to be long enough.

A new analysis from Mark Zandi, chief economist at Moody’s Analytics, and Jim Parrott, a fellow at the Urban Institute, shows the typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment. This also includes utilities and late fees. In total, an astounding $57.3 billion is owed. This includes all delinquent renters, not just those suffering financially due to the Covid pandemic.”

Chuck Again…  Didn’t I tell you that the problems caused by rents not being paid go way deeper than meets the eye…  Remember, all mortgages are bundled together and sold as a bond… those bond holders expect to receive principal and interest payments each month…  And landlords depend heavily on the rents they receive to pay for upkeep, taxes, etc… I’ll betcha a dollar to a Krispy Kreme that if a landlord fell behind on his taxes owed to the city, country or State, that these official offices wouldn’t think twice about taking away his property…  I’m just saying…  That’s an old line that goes something like this…  We you pay off your mortgage loan and own your house outright, you had better keep up with the taxes or else you’ll find out who really owns your house… 

Market Prices 1/26/21: American Style: A$ .7695,  kiwi .7200, C$ .7848, euro 1.2130, sterling 1.3651, Swiss $1.1248, European Style: rand 15.3003, krone 8.5635, SEK 8.3160,  forint 295.81,  zloty 3.7503,   koruna 21.5237, RUB 75.31, yen 103.79, sing 1.3273, HKD 7.7515, INR 73.03, China 6.4766, peso 20.15, BRL 5.4654,  Dollar Index 90.46,  Oil $52.99,  10-year 1.04%, Silver $25.52, Platinum $1,092.00, Palladium $2,406.00, Copper $3.55, and Gold… $1,855.70

That’s it for today… Well, today is the birthday of my younger sister, Joan…  So, Happy Birthday Joanie, I hope your day is grand! Joan moved to Houston, Texas quite a few years ago now, and so I seldom see her any longer…  And I finally heard from the folks at Roger Dean Stadium… And they are going to sell tickets to the games, with season ticket holders having first shot…  I’m not happy about it, but at least I’ll be in the stadium!  Bring on day baseball! YAHOO!  I started reading my new book, and man is it weird… I don’t remember it being this weird when I read it in High School!  Oh, well, it’s supposed to make me think, and it it’s doing the job! Maybe that’s why I don’t recall it from H.S. I probably just read the jacket notes, and passed the test!  Steely Dan takes us to the finish line today with their song: Aja…  “Aja, when all my dime dancing is through, I run to you”…  A great song in my opinion! I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler

January 25, 2021

* Currencies push against the dollar bugs… 

* Gold bounces in the early trading today… 

Good Day… And a Marvelous Monday to you! Well, Congratulations to the Tampa Bay Bucs, and the K.C. Chiefs  for winning their respective conference championships, and will play in this year’s Super Bowl in two weeks…  And Saturday night was a “double winner” for me, as my beloved Missouri Tigers won their basketball game beating # 6 Tennessee, and our Blues won too!  I had the Blues on the TV and the Tigers on my phone…  We had some beautiful weather this past weekend, as I was left alone for the next two weeks… But that didn’t change what I do each day and night!  I watched the St. Louis weathercast last night, and they were fretting about snow and ice for this morning there… YUCK!  I’m glad I’m not there! The late Great Leon Russell greets me this morning with his song: Stranger In A Strange Land..   “how many days has it been since I was born, and how many days till I die? “

On Friday last week, the currencies pushed against the dollar bugs, and eventually gained some ground on the day, except that is the Aussie dollar (A$). The A$ saw some real selling on Friday. Falling from .7780 on Thursday to end the week at .7105…  I looked and looked for reasons for this decline but couldn’t find any… One would think that with commodity prices rising, that the lead “Commodity Currency” would be rising in price too… I see this morning that the A$ is rising again, so maybe it was just a day of profit taking….  

But then it occurred to me that the news that there’s a new Covid virus outbreak in China could be the news I’m looking for!  The fear here is that demand for raw materials will wane because of the outbreak, and that has thrown a spanner in the works as far as the A$ is concerned…  As I look at the other commodities, Copper has dropped a few cents on this news too… 

Gold lost $14.50 to close at $1,856.50, and Silver lost 44-cents to close at $25.58… This after Gold & Silver’s large gains on Wednesday last week. On Thursday, Gold was down $2.00 and Silver was up 12-cents…  The good folks at GATA sent me this on Friday, “silver market analyst Ted Butler  (no relation that I know of) writes about the seeming inability of the major bullion banks to close their huge short positions in silver futures without exploding the price and costing them a lot of money.

Butler writes: “This is the big shorts’ last stand.”

Most Gold & Silver owners would like to think that statement were going to be true… But to me, this isn’t about what the bullion banks want to do…. It’s about what the U.S. Gov’t wants them to do to suppress the price of Gold so that investors don’t lose faith in the dollar…   You may recall a Pfennig from back in the day, when I highlighted an article that centered on Blythe Masters the former head of JPMorgan’s Commodities desk, and her statement that “JPMorgan doesn’t enter trades for their own proprietary account, but for the accounts of their clients”

I’ll always remember that Pfennig, for it told me that 1. Either she was lying through her teeth or 2. She was telling the truth, and JPMorgan’s HUGE short positions were done for the Gov’t…    See? It pays to write for years, because things that people said, might come back into play!

One thing I want to point out is that the rising Commodity prices have nothing to do with the idea that the major economies are coming back strong..  Instead, the rise in Commodity prices have to do with the fears that inflation is ready to take off to higher ground…  Certainly not according to the the Gov’t’s calculation of CPI (consumer inflation), but if you go over to shadowstats.com, the proprietor of the site, John Williams says that real inflation is running at 4.5%… And John also had this to say on his website:” Panicked, Unlimited Federal Reserve Money Creation and Federal Government Deficit Spending Continue and Will Expand, Triggering Major Domestic Inflation.”

Yes, major currency creation will not only spur inflation, (if the currency creation is in the hands of spenders to get the velocity of money moving) but will also debase the dollar even more, causing a loss of buying power for dollar holders, and fortify the reason why one holds Gold & Silver… I read a piece this past weekend where the author sounded as if he was a longtime Pfennig Reader, when he said, that he owns Gold, and it’s not for sale… He holds it as a store of wealth, and a hedge against the falling dollar…  Man, I could swear I’ve said those exact word one hundred times in this letter in the past!  Oh, well, at least there’s somebody out there that thinks like me! HA!

In the overnight markets… The currencies have drifted overnight, losing a little ground, but not much at this point. Gold is up $7 and Silver is up 21-cents in the early trading today, so a good start for those two.  The Russian ruble has slipped back to a 75-handle, from the 73-handle it traded last week. The price of Oil has slipped back to a $52 handle, and it appears the China news is affecting anything commodity related… 

The U.S. Data Cupboard finally gets back into the business of printing some real economic data this week, but not today! Today the Cupboard is as bare as a bone… Not only will the Cupboard get restocked this week, but we will also have a FOMC Meeting, the first one of 2021… And much like 2021, so far is much like 2020, the Cartel’s, I mean the Fed’s meeting will also be much like those that took plast last year… They’ll whine about not having the tools to prop up the economy, and throw Congress in front of the bus, claiming that Congress needs to pass more stimulus immediately…

But come on! Cartel, I mean Fed, you know better than that! The U.S. is broke! It doesn’t have the money in its purse to pay the piper, nor does it have the money to send out to citizens to help them out…  But maybe, now that I’ve said that, maybe, just maybe, cause we never know, the Cartel, I mean the Fed needs Congress to deficit spend till the cows come home, to increase inflation…  Not that the Cartel, I mean the Fed, wants to fight inflation, they think that they’ll be able to squelch any rapid rise in inflation… And Chuck says, “I’m from Missouri, they’re going to have to show me”! Because I don’t believe for one minute that they will be able to get inflation under control quickly… They’ve painted themselves into a corner, they can’t raise rates, and they if they can’t raise rates, they won’t be able to combat inflation…

This is going to be a doozy of a year, financial system wise, folks… I do believe that this massive increase in deficit spending that’s coming is going to bring into question, Who’s going to buy our Treasuries?” And when they total all the hands that rose to say they’re buying Treasuries, the amount left unbought is going to cause some major thinking to take place, folks… And remember what I told you a few months ago, about how the weight of debt was going to cause defaults…  They’re coming… I feel that train a comin’ it’s rolling around the bend, and ain’t seen a surplus since I don’t know when…  (Johnny Cash, with the help of C. Butler!)

And after last week’s European Central Bank’s (ECB) staying the course, with their negative deposit rates, and bond buying programs, it will be the Cartel, I mean the Fed’s turn to stay the course, with near zero interest rates, and their bond buying…  Imagine if the Cartel, I mean the Fed, actually said, “We’ve decided to TAPER our bond buying, to get back to no buying”   Imagine the temper tantrum the stock and bond markets would throw… Worse than a two-year old in the grocery aisle screaming and pounding the floor because they can’t have a candy bar!

So, back to the Data Cupboard this week… We’ll see Durable Goods, and Capital Goods orders, Personal Income and Spending, along with the FOMC meeting, and the usual Tub Thumpin’ Thursday fare, of Weekly Initial Jobless Claims…  But not today, the cupboard is bare..

To recap…  The currencies have been on a mission to push the dollar bugs back into the wallboards where they came from, but the pushing has been in small amounts, but for nondollar holders the dollar bugs are getting pushed around… Gold lost $14 on Friday… Silver lost 44-cents…  The FOMC meets this week, and Chuck thinks it’ll be a meeting of whining and crying…  But not real action…  Chuck talks about inflation, Gold & Silver Manipulation, and other stuff this morning, that if you just came here first, you’ll be compelled to go back and read! HA!

Before we head to the Big Finish… I dropped the ball last week, as I was asked to give the link to a webinar that my publishers, and good friends, Mary Anne and Pamela Aden were taking part in… But, I did get a reprieve of sorts, as they recorded the event and gave ,me the link for the recording. So if you can carve out a few minutes today or whenever, I think you’ll enjoy hearing what everyone on the Webinar had to say, and you can find that here: https://mailchi.mp/assetstrategies/q1webinar-link-chuck-butler

For What It’s Worth….  Well, if I had a Gold coin for every time I read about some economist calling for a crash in the stock market, I would have to find a new place to store them!   But, this time this one is a little different, because this isn’t your ordinary economist… This is the venerate Jeremy Grantham, and when he talks people listen… he has his thoughts on the stock market and they can be found here: Investing Legend Sees “Spectacular” Crash In “The Next Few Months” | ZeroHedge

Or, here’s your snippet: “Two weeks ago, investing icon Jeremy Grantham turned apocalyptic and warned that the “Bursting Of This “Great, Epic Bubble” Will Be “Most Important Investing Event Of Your Lives.” Since then the market has generally continued to melt up, yet Grantham’s conviction that all this will end in tears has only grown, and in an interview with Bloomberg today, the co-founder of GMO who correctly called the last two crashes, now predicts that Joe Biden’s economic-recovery plan will propel stocks to perilous new heights, followed by an inevitable crash.

“We will have a few weeks of extra money and a few weeks of putting your last, desperate chips into the game, and then an even more spectacular bust,” the value-investing legend said in a Bloomberg “Front Row” interview.

“When you have reached this level of obvious super-enthusiasm, the bubble has always, without exception, broken in the next few months, not a few years.”

Amid market euphoria the likes of which have – literally – never been seen before. and which prompted Citi, B of A and Goldman to all warn that a selloff appears imminent, and which was fueled by risk-taking behavior funded by the latest round of pandemic-relief checks, Grantham has “no doubt” at least some of the $1.9 trillion in federal aid Biden is seeking from Congress will end up being spent on stocks instead of food or shelter.

While that will help push stocks even higher, Grantham then sees it all ending in tears, or rather a collapse rivaling the 1929 crash or the dot-com bust of 2000, when the Nasdaq cratered 80% before recovering thanks to trillions more in Fed “stimmy” checks.”

Chuck Again…  But not to worry, this is not going to happen overnight folks…  But didn’t you like Mr. Grantham using a phrase of mine…  “it’ll all lend up in tears”?   Pretty cool… 

Market Prices  1/25/21: American Style: A$ .7729,  kiwi .7210,  C$ .7874, euro 1.2158, sterling 1.3691, Swiss $1.1282, European Style: rand 15.2065, krone 8.4789, SEK 8.2768,  forint 293.52,  zloty 3.7333,   koruna 21.4376, RUB 75.26, yen 103.84, sing 1.3265, HKD 7.7512, INR 72.92, China 6.4763, peso 19.72, BRL 5.4653,  Dollar Index 90.24,  Oil $52.73,  10-year 1.08%, Silver $25.79, Platinum $1,117.00, Palladium $2,456.00, Copper $3.57, and Gold… $1,853.70

That’s it for today…  Well, I still haven’t heard from the folks at Roger Dean Stadium, regarding my Spring Training Season Tickets.. But a dear reader sent me a copy of a letter he received from the Twins about his season tickets… And I don’t like it one iota! As I’m sure the same procedure will be implemented at each stadium… At least fans are going to be in the stadium… That’s half the battle, but now, where will I sit? UGH!  Pitchers and catchers report in 3 weeks!  My blood sugar numbers are still falling, and that’s a great thing, albeit slowly!   And be sure to check out the Adens on the webinar link I have above!  I finished 1984… Man, there are so many things that remind me of today in that book… And now I’m onto another oldie but goodie, Fahrenheit 451, by Ray Bradbury… And when I finish that one, I’ll go back to my murder mysteries! Triumph takes us to the finish line today with their song: Fight The Good Fight…  my good friend, Rick B. will like that one!  I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

January 21, 2021

* Gold & Silver soar on Wednesday! 

* New Treasury Sec. Janet Yellen dominates today’s letter

Good day… And a Tub Thumpin’ Thursday to you! Well, we have a new President and House and Senate, and they all lean left… No longer are there checks and balances in our Gov’t… But what the heck, we can give this new arrangement a try, right?  Before the new arrangement turns its back on the 80 Million people that didn’t vote for them, they might want to keep in mind what happens when you get those 80 Million people riled up…  I’m just saying…  Our Blues were playing again last night and I was able to watch the game that began at 9 my time here…  The Rock Classic band, Blind Faith, greets me this morning with their song: Can’t Find My Way Home…   I’ve been there believe me on that one folks!

Well… yesterday, I said that I didn’t think that much would happen with the currencies for everyone’s attention would be on D.C. And the Currencies drifted, albeit a bit lower on the day.   But while the cat was away, the mice did play, and Gold gained $32 on the day to close at $1,872.00, and Silver gained 62-cents to close at $25.90…  I guess that Gold traders and investors got the memo that the new Administration is going to push harder on the Cold War with China… Ahhh… Those geopolitical problems… And while we’re at it, maybe they also heard the news that the next Stimulus Bill will be a DOOZY   And that, my friends, is exactly what I talked about in an interview with Dennis Miller of www.milleronthemoney.com a few months ago. I said that once you start giving out currency, the next time will require a bigger payout, and the next one will require a larger payout than the last one, etc. etc. ….

I know that I’ve been remiss in not mentioning what’s going on overseas each day… I actually have done this on purpose, because as always, it’s all about the dollar… So, I focus on dollar stuff each day… I will tell you that tomorrow is a HUGE day for economic data overseas… So, Monday, I’ll try to recall to go back and look at it and see what’s happening… The European Central Bank (ECB) is meeting today, and I’m thinking that ECB President will be looking to move interest rates more negative… I guess, we’ll see, eh? 

In the overnight markets, the currencies are getting marked up VS the dollar, and Gold is flat to down a buck or two…  The Petrol Currencies are leading the pack today, with good gains in Russian rubles, Canadian dollars/ loonies, Brazilian real, Norwegian krone, and even pound sterling!   Yesterday, was a real nothing for the currencies, and today, they’ve gotten back to the business at hand, which is pushing the dollar toward the currency woodshed… 

OK… Well new Treasury Sec. Janet Yellen was in the news quite a bit this week as her nomination was voted on.  Here are some thoughts from Janet Yellen, that caught my eye… when asked about how seniors have been damaged greatly by the zero interest rates policy that was partly under her regime at the Fed… She responded:

“I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time,” she said in the statement, which was obtained by Reuters.

And those words got publishing guru, Bill Bonner sitting up to respond to her: “Who are these people who have been struggling? American household income (thanks to the feds’ bailouts and giveaways) was at its highest point ever last year – with $1 trillion more in earnings than the year before.

And we need not remind dear readers that the U.S. government is broke – with a $2 trillion deficit already on the books for this year” – Bill Bonner

Well… I want to thank the good folks at GATA for this next blurb, as they highlighted it from an article on the FT.com.  Apparently new Treasury Sec. Janet Yellen is not a fan of currency manipulation.. Let’s listen in: “Janet Yellen warned U.S. trading partners against currency manipulation and touted the importance of market-based exchange rates in her most exhaustive comments yet on the incoming Biden administration’s approach to international economic policy.

Ms. Yellen, who is Joe Biden’s nominee to serve as Treasury secretary, said “the intentional targeting of exchange rates to gain commercial advantage is unacceptable” and that she would “oppose any and all attempts by foreign countries to artificially manipulate currency values to gain an unfair advantage in trade.”

Chuck again… So, who wants to set the over / under on how long it takes Yellen to change her mind and put some of those Billions, with a capital B, in the Exchange Stabilization Fund (ESF), or Slush Fund, as I call it, to work?  

Ok, currency traders you heard it straight from the horse’s mouth, that using the ESF to protect the dollar is not going to happen going forward….   What are you waiting for now? Take the dollar to the woodshed and leave it there! Because that’s what it deserves!

Well, let’s see what else is there to talk about this morning?  It is a Tub Thumpin’ Thursday, so we will see the Weekly Initial Jobless Claims this morning right out of the starter’s blocks…  This unemployment problem has become a rash that won’t go away… A lot of businesses that these unemployed people worked for, will not be coming back, so there will be no job for the Unemployed person to go to once things open up again… What will they do?  It’s a sad, sad situation… and it’s getting more and more absurd… (in case you didn’t catch it, those lyrics are from an Elton John song titles: Sorry Seems To Be The Hardest Word…

You know 3 years ago, I didn’t really care for the decision that was made to show me the door… But as time goes buy, I think it was the best thing I could do, given my health, age, and my willingness to keep writing my letter, which the new company wasn’t going to tolerate one iota…   So, there was no Unemployment Claim by me… I simply walked away, found a new publisher, and retired…  But I had been there where a lot of the unemployed people are now, back in 1998… And I didn’t like the feeling of not going somewhere to earn money each day, so I know what it feels like, folks… And it’s not a happy place! 

There’s really nothing else, unless you are tied to the Home Building, Housing starts, and existing home sales data to look at today or tomorrow… But before we close out the week I wanted to circle back to what I talked about on Tuesday, and that is that U.S. Retail Sales were negative the last 3 months, which included the Christmas shopping season!  How on earth can that be? Unless of course the U.S. Consumer is tapped out…  They can’t put any more on their Credit card, and they’re savings have dwindled greatly…  And without Consumption the economy is going nowhere, folks…  There’s just no way the Gov’t can make up for this lack of consumer spending… of course that won’t stop the Gov’t from trying! So, look for more deficit spending and currency printing…   Got Gold?

To recap… It was Inauguration Day in the U.S. yesterday, and the currencies basically drifted, albeit a bit lower on the day.. Gold on the other hand rallied by $32, and Silver by 62-cents on the day… The overnight markets have gone back to pushing the dollar toward the currency woodshed. Chuck has read and heard some interesting things about new Treasury Sec. Janet Yellen, so he spends a large part of today’s letter talking about her…

Before we had to the Big Finish today, I wanted to highlight another quote from someone that should be revered, Ayn Rand, talking about Freedom of Speech…  Here’s Ayn Rand, “Once a country accepts censorship of the press and of speech, then nothing can be won without violence. Therefore, so long as you have free speech, protect it. This is the life and death issue in this country: do not give up the freedom of the press, of newspapers, books, magazines, television, radios, movies, and every other form of presenting ideas. So long as that’s free, a peaceful intellectual turn is possible.” – Ayn Rand

For What It’s Worth… Well, I began today with some quotes from new Treasury Sec. Janet Yellen, and the responses to the quotes, and then I saw this from James Rickards, who chimed in with his own response to a Janet Yellen quote, and I thought it played nicely in the sand box with my other highlights, so here it is for your FWIW today : “The Smartest Thing We Can Do Is Act Big” – The Daily Reckoning

Or, here’s your snippet: “Today, Treasury Secretary-nominee Janet Yellen addressed the Senate Finance Committee during her confirmation hearing.

In her statements, she argued that major fiscal stimulus is justified to support the economy while the pandemic still rages.

She stressed the need to address income inequality and pledged support for the incoming Biden administration’s climate change policies.

In other words, she plans to support large amounts of government spending to stimulate the economy.

She acknowledged that debt is a potential problem. “But,” she added, “right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”

Let’s just say that’s wishful thinking.

We cannot spend our way out of a debt trap. As I’ve explained before, fiscal policy is not stimulus because the U.S. debt-to-GDP ratio is now over 130% and rising quickly. Extensive research shows that at debt-to-GDP ratios above 90%, the multiplier on new debt is less than one.

This means we’re in a debt trap (in addition to a liquidity trap caused by Yellen’s previous organization, the Fed).

But Janet Yellen has no real understanding of money and monetary economics. Her tenure at the Fed proves it.”

Chuck Again… Well, I would say that Rickards comments qualify him to be banned from Twitter and Facebook!  HA! Seriously, he sure doesn’t pull any punches talking about Yellen does he? 

Market Prices 1/21/21: American Style: A$ .7780,  kiwi $ .7222, C$ .7926, euro 1.2150, sterling 1.3724, Swiss $1.1283, European Style: rand 14.7908, krone 8.4254, SEK 8.3014,  forint 294.05,  zloty 3.7260,   koruna 21.4770, RUB 73.52, yen 103.39, sing 1.3220, HKD 7.7516, INR 72.94, China 6.4669, peso 19.56,  BRL 5.3300,  Dollar Index 90.17,  Oil $53.02,  10-year 1.09%, Silver $25.97, Platinum $1,131.00, Palladium $2,419.00, Copper $3.64, and Gold… $1,871.30

That’s it for today and this week… Yesterday, was an absolutely beautiful day here, I sat out on the deck reading my book, 1984, for about 2 hours and then I had taken in enough sun for the day…  Another beautiful sunrise this morning, with an orange sky, not red…  My next book is Fahrenheit 451, which I have sitting here waiting for it to be read!  Oldies but goodies, right? Well, that’s pretty much how I am with my music too!   Dan Fogelberg takes us to the finish line today with his song: Late For The Sky…  I think I’ve told you before, that this song always brings me to tears, as it so sad…  You know, come to think of it, ever since 2007, I’ve become a big cry baby, over anything that’s sad…  Now there’s something that I’ve never talked about before to anyone… So, you dear reader know something about me that others don’t!  So, any way, it’s time to go, so I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… And Please Be Good To Yourself! 

Chuck Butler