Author: admin

Rocktober 7, 2020

* The up one day down the next trend continues… 

* Chuck goes through his thoughts on the Credit Markets… 

Good Day… And a Wonderful Wednesday to you! I said yesterday that an “Indian Summer” would be very welcome here in the Midwest, where quite chilly temps had ruled for the last week. And much to my surprise it warmed up yesterday, and now we’re set to have temps in the mid 80’s for the next week… I know that technically, it’s too early for an Indian Summer, but I’m going to call this week that, because…. I want to! We are in the U.S. right? Freedom of Speech and all that!  Sad news last night that cancer had taken the life of guitar great, Eddie Van Halen, at age 65… he had throat cancer, which is different from my cancer, but this one still hit home… RIP Eddie….   The Cure greets me this morning with their song: Friday, I’m In Love…  I do believe that this was one of my former colleague Jenn’s fave songs! HA!

I don’t know what I was thinking yesterday, thinking that maybe, just maybe the recent trend of one day up the next day down for the currencies and metals had come to an end… The day began on a good note, but that soon turned sour… And the currencies and metals took one on the chin all day long… The euro was 1.1802 yesterday morning, and by the end of the day here in the U.S. the single unit was 1.1735…. And Gold was up $4 in the early trading yesterday, only to see the dollar gain back $36.80 to see Gold close at $1,877.30. Silver too got the stuffing knocked out of it during the day, and the dollar gained back $1.12 to see Silver close at $23.12….  A whole $1 move in Silver is HUGE folks, and showed that the price manipulators weren’t fazed by the findings that their ringleader (JPMorgan) had gotten its wrists slapped once again… 

In the overnight markets… Well, let’s see yesterday was a down day, today should be an up day… And if the overnight markets are any indication, it will be… Gold is up $10 in early trading, and the euro is moving higher once again… 

I know this up one day and down the next day is pretty silly as it actually tells investors when to buy and when to sell… Sorta like those computer programs that light up green when it’s time to buy, and light up red when it’s time to sell…  For years, at the Money Shows our booth was near the booth where those programs were sold… I had their sales schtick down at one point I had heard it so much… 

Well, there was all this talk over the weekend that a new stimulus bill was nearing the end of negotiations, and that had Gold pushing higher on Monday, but then yesterday, they let the air out of the stimulus bill’s balloon, when it was Tweeted  that there would be no stimulus until after the election…   You should have seen everyone run to the exits after that Tweet…. Stocks, bonds, currencies, metals, there were no safe harbors….

And that put the idea in the price manipulator’s minds that Gold would see some selling, and they decided to pile on… And pile on they did… In fact if they played in the NFL, they would have gotten a flag for Unnecessary Roughness….   I told you all before about my football playing days, and about the time I ended up on the other team’s sideline, after driving a runner out of bounds. I feared for my life and a steered away from that sideline the rest of the game.  I was piled on, out of bounds mind you by, the opposing team, and the refs had to come and pull the opposing team off me… I was a tough sonofagun in those days, but even that made me think twice about going into another team’s sideline!

So… what’s the lack of another stimulus check in consumer’s mailbox or direct deposit into their bank account going to do to the election?  Better than that question is what will it do to the economy that can’t get started after being neglected for 5 month?    I see the economy as being akin to when you haven’t driven your car for months… What happens? The Batter dies. (unless you’re smart like me and have a solar battery tender)

You know, I’ve talked to you before about all these moratoriums and what they will eventually do to the bond holder… But… I thought it best to talk about it again…  We currently have moratoriums on eviction and foreclosures, because people can’t or wont’ pay their rent or home loan…

While that’s a nice thing to do for these people it does nothing for the bond servicing…  You may be renting, but there’s a home owner with a loan, and if you don’t pay your rent, he can’t make his home loan payment. And all those home loans get packaged into bonds, folks… Now Banks do cherry pick some of the home loans to have on their books and not present them for packaging, but those cherry picked loans are small compared to the size of the mortgage backed bond market…

Eventually, these bonds don’t pay P&I to the bond holder, and now the bond holder has a non-performing asset… And the bond’s value is going down the tubes, so he can’t sell the bond without taking a huge loss… Pretty soon the bond defaults, and one default, begets another one, and pretty soon the credit market as a whole collapses… Uh-Oh, did I just say that out loud?  Oh well it has to be explained and said so that investors can take appropriate measures before all hell breaks loose… .I’m just saying…

The Whole financial system is built around the credit markets, and without proper running credit markets the financial system that we all know and love will collapse…  And let me tell you something that you won’t hear anywhere else… The Credit Markets began to collapse last September, when the repo market had to be  bailed out by the Fed…. Remember me telling you that this was going to be a bid deal?   Well, in my opinion, it’s still a problem, but… The Pandemic slowed the process…. You see if people aren’t getting loans, banks don’t have a need to for extra capital and the place they would get that is the repo market…  And so the need for the Fed to keep bailing out the repo market slowed to a snail’s pace, but it still needs to be bailed out, and to me, that was the beginning of the end of the credit markets….

And no one is talking about this…. Crickets….  Makes you wonder if the powers in charge want to spring the whole collapse on you in one fell swoop…  I’m just asking….

Well, the U.S. Data Cupboard still is in need of a restocking, but for today, we will see the minutes of the Fed’s last FOMC meeting…  And Consumer Credit (read debt) for August… We just saw late last week that August Personal Spending, while not huge, was larger than expected, and out paced Personal Income… So, put two and two together and you get…. A larger Consumer debt number for August…  Yes, grasshopper… you figured it out… Credit Card purchases… 

OK, yesterday, I told you I didn’t know how to get a cartoon on the email server and so I wrote out the verbiage for you…  But my  associate at Adenresearch saw what I wrote, and said, I can do that for you! And so, Here it is for those of you who read the email, it won’t be here on the website version…. 

Before we head to the Big Finish today I wanted to tell you about this bit of news that showed up yesterday… “U.S. commercial bankruptcy filings are up 33% so far this year with new cases in September surging by 78% from a year earlier as the recession triggered by the COVID-19 pandemic hits small businesses, data released on Monday showed.

Filings by individuals, however, are lower so far this year courtesy of government relief efforts.

Chapter 11 bankruptcy filings totaled 747 last month, up from 420 a year earlier and from 525 in August, legal services firm Epiq said in a monthly report. Year-to-date filings total 5,529, a third higher than in the first three quarters of 2019.”   I found that on Reuters…  w

To recap… Everything was going along smoothly yesterday, and then a Tweet from the White House that said , “no stimulus until after the election” and you should have seen the players run for the exits… There were no safe harbors as, stocks, bonds, currencies, Oil, and metals all took a shot to the midsection… . The overnight markets show a rebound is building, but we’ll have to see what the NY traders have to say about that! 

For What It’s Worth…  Well, I was up all night last night, couldn’t sleep, don’t know why, but an hour here and an hour there was it.. .So, I got up and went to my writing desk, opened my email and there was Ed Steer’s letter, so there I was a 4 in the morning reading his letter and found this article that he highlighted about how the Fed keeps asking Congress for another stimulus package, and it can be found here: https://www.zerohedge.com/markets/watch-fed-chair-powell-ask-congress-more-fiscal-stimulus

Or, here’s your snippet: “Fed chair Powell is holding a virtual conference with National Association for Business Economics. As previewed earlier, there were  no notable surprises in his prepared remarks in which he emphasizes that the outlook remains highly uncertain, the expansion is far from complete, and in keeping with the Fed’s recent appeals to Congress, Powell asks Congress to quickly vote through more fiscal stimulus, assuring lawmakers that providing too much stimulus wouldn’t be a problem.

Powell’s remarks come amid continued gridlock in Congress and Republican opposition to a larger relief package that’s kept talks with Democrats at a stalemate in Congress since aid to jobless Americans and small businesses expired in July and August.

“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said in the text of a speech for a virtual conference hosted by the National Association for Business Economics. “By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”

While Powell didn’t explicitly reference either party’s position in his prepared remarks, he said that the “recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods.”

Meanwhile, the Fed chair confirmed what we said last week, namely that U.S. consumer are rapidly burning through their savings, something which has so far allowed U.S. consumption to remain stable, however at the current rate of spending, savings would will likely return to pre-covid levels in 2-3 months”

Chuck again…  Well, you know why Powell is so hell bent and whiskey bound to get Congress to pass another stimulus don’t you?  The stock market…The Fed’s baby…  It’s losing ground every day it seems that a new stimulus doesn’t get passed, and now with the Tweet yesterday… We won’t be seeing on any time soon…. 

Market  Prices 10/7/20: American Style: A$ .7123, kiwi .6586,  C$ .7515, euro 1.1757, sterling 1.2867, Swiss $1.0893, European Style: rand 16.6978, krone 9.3305, SEK 8.9367,  forint 305.93,  zloty 3.8170,    koruna 23.0574, RUB 78.16, yen 106.08, sing 1.3590, HKD 7.7498, INR 73.24, China 6.7882, peso 21.56, BRL 5.5659,  Dollar Index 93.81,  Oil $39.54,   10-year .78%, Silver $23.66, Platinum $864.00, Palladium $2,411.00, and Gold… $1,887.50

That’s it for today, and this week… recall that I have my monthly oncologist appt tomorrow bright and early…  And Friday will not be a sleep in day, as I have a bright and early appt at the Wound Center… yes, I have to go back to them…. UGH!  Monday morning at this time it was 36 degrees outside, and this morning it’s 56 degrees… I told my wife that she did a good job bringing back the warmer weather from Florida!  Now that my beloved Cardinals have been ousted from the playoffs, I try to watch the remaining teams play, but they can’t hold my interest very long…  The Allman Brothers take us to the finish line today with their song: Statesboro Blues…   “I woke up this morning, I had them Statesboro Blues”…  I hope you have a Wonderful Wednesday and rest of the week, and please Be Good To Yourself!

Chuck Butler

Rocktober 6, 2020

* Currencies & metals both rally on Monday

* Big Ben Bernanke & Paul Krugman explain GDP… 

Good Day… And a Tom Terrific Tuesday to you! I had a reader last week request that I include Tom Terrific’s dog, Mighty Manfred the wonder dog, on Tuesdays…  Well, I don’t know If I’ll remember to do it each week, but there it is! How many of you recall Tom Terrific cartoons? I loved the name of his foe: Crabby Appleton, whose saying was, “I’m rotten to the core”!  They don’t make cartoons like that these days! Well, tonight I’ll pick up my wife from the airport, which means, with kudos to Barbara Mandell, I won’t be sleeping single in a king size bed any longer! Well, for about 6 weeks that is, when she’ll return to our Florida home for a couple of weeks… I’m not a fan of country music, per se, but I am a fan of all the old recordings my Hank Williams…  My dad used to sing these song all the time, and so I learned how to play them on my guitar, and surprised him one day, many years ago… OK INXS greets me this morning with their song: Listen Like Thieves…  (were they talking about the price manipulators? HA!)

 

Well… I told you yesterday morning, that we were in store for an up day in the currencies and metals, and that’s what we got!   Gold held on to its early $6 gain, and added another $8 to close at $1,914.30, and Silver added another 33-cents to its 30-cent early morning gain to close at $24.42… The euro continued to ratchet higher through the 1.17 handle and was within’ spittin’ distance to the 1.18 handle, and the Aussie dollar (A$) was also close to hitting the 72-cent handle again…  But that was yesterday… And if recent trends hold true, it would mean that today will be a down day…. It’s turn down day… (The Cirkle)  Let’s hope the trend ends!

 

In the overnight markets… The euro did reach 1.18 and has held it so far, as the U.S. traders arrive at their desks… no wait!  Manhattan is a ghost town now, so traders are arriving at their laptops in their pjs…  The Aussie dollar (A$) found the sledding a little rough around 72-cents and it backed off of the figure..  The currencies I see that have gained VS the dollar since yesterday besides the euro would include: the krone, the sing dollar, the koruna, the renminbi, and real.  There could be others but these currencies have gained enough to make it noticeable…  

In the early trading in Gold & Silver, Gold has picked up another $4 this morning, but Silver has remained unchanged. 

So, maybe, the PPT will stay away, and the price manipulators are still licking their self inflicted wounds from last week’s news that their ring leader, JPMorgan had 2 more felony counts of price manipulation thrown on them by the DOJ….

The news that the Congressional folks in charge of negotiating a new stimulus bill are getting closer to announcing one… One side wants to pull out all the stops and have the bill larger than $2.2 Trillion, but they’re torn between two lovers… They want to spend, spend, spend, but if the stimulus bill helps reinvigorate the stock market, they don’t want that to happen before the election….  The other side wants the bill to be $2 Trillion and no more, but doesn’t want the public to see that they are working with the other side…   This isn’t politics, folks, this is fact!  And we all know that politics have no facts! HA!

So.. where was I before I went all truthful about the stimulus package… Oh!… The news of a new stimulus bill getting closer to realization, put the pedal to the metal for the metals, because even though we crossed $27 Trillion in current debt, it would mean another jump in the debt numbers… And while there are some that say they don’t matter, and that contrary to what my mom used to say to me and my siblings, that “money doesn’t grow on Trees”,  the Monetary Money Tree (MMT) folks don’t care… They’re hanging out the car window with their hands in the air, screaming, More Money, More Money, the debt is soaring and we don’t care!”

People that own Gold get it… People that don’t own Gold, don’t get it…. They call it barbaric, non interest earning, glob of metal, and they try and try to rationalize why they haven’t bought Gold by now….  When Gold wasn’t “that pricey” I used to give a Gold coin to my kids each year at Christmas… A Gold coin for those that don’t know it, says $50 on it…  And my darling daughter said, “looks kids it’s a $50 Gold coin”…. I then explained to her that if she read more of the Pfennig than the first and last paragraph, she would know that the price of Gold was at that time $1,000….   Well, I had to stop giving Gold coins, and substituted Silver Coins for the grandkids… I asked my kids (3 of them) if they still had their Gold Coins, and all said yes… So, at least I taught them something through the years!

But here’s a little talked about fact regarding Gold that needs to be said more…. Gold is not issued by a Central Bank… Therefore it can’t be debased,  sent to the printers for copies, and there is a finite amount of Gold in the world….  I heard this yesterday, that the Pension companies, the one’s I’ve been telling you are in deep dookie for a long time now, are saying that they will change their bylaws and start buying and holding Gold…   Do you know the size of these potential  transactions? If the Pensions made a 1% allocation to Gold, it would put such pressure on supply that it would probably eat the supply away, thus leaving everyone else to scramble for physical Gold…  So… if you’ve been waiting, and waiting, and waiting, to buy Gold… I would certainly think about doing it before the Pensions Plans fire up the buying machines!

OK… enough… I mentioned above that the current debt is now $27 Trillion…  It wasn’t that long ago that we passed $26 Trillion… And with another stimulus coming, We, as a country will be very close to my estimate from months ago that our current debt would be $30 Trillion by year end…  And it’s not just the Gov’t debt, which doesn’t include Unfunded Liabilities ($155 Trillion),  but you have to include Corporate debt, which is 48% of out GDP right now at $10 Trillion, and State and local Gov’t debt, and then the topping on the debt cake, Consumer debt… How does all of this debt ever even think about getting paid down, much less paid off? 

And this is why…. I still believe that the U.S. along with other countries are going to have to default on their respective debts…  And this is why I continue to think that countries like Russia, Singapore, Germany, Ireland, Netherlands, Oh, wait, those last three, you can’t buy their currencies because they belong to the European Union, and use the euro…  But Isn’t it nice to know that not every country in the world is up to their eyeballs with debt?

All this talk about debt is giving me the willies…. Let’s move on…

I don’t know if you’ve noticed this or not, but the yield on the 10-year Treasury has been very stealth-like in its move higher this past week…  On 9/28/20 the 10-year’s yield was .66%, and today it sits at .78%…  In the “old day” that would be a big move…  Are the bond boys telling us something that we need to pay attention to?  Like inflation is rising? Or, is this upward move in the yield a result of a lot of absentees at the bond auction?  Hmmm… These ARE things that may you go Hmmm…  

The U.S. Data Cupboard  today doesn’t have much for us, just like yesterday’s offerings. Tomorrow we will get the Minutes of the last FOMC meeting by the Cartel, I mean the Fed…  We did see the color of the monthly Trade Deficit this morning… And it was larger than then expected and the August Trade Deficit came in at $67.1 Billion…  You know… it wasn’t that long ago, well it was before Covid (BC) , that the Trade Deficit was around $40 Billion, and then in July it jumped to $63 Billion, and now $67 Billion…  

I once read a paper written by an economist that said, “the Trade Deficit isn’t a concern”…  I said, “What?!@*%^(O  you’ve got to be kidding me! Oh me, oh my, what’s a guy like me supposed to do with a guy like that? I just hoped that my dear Pfennig readers didn’t read this guy’s essay… 

The other day I mentioned that GDP for the 2nd QTR was negative -33%, but I got to thinking that a lot of people don’t know what that means in dollar terms….  Well, that negative 33% was equal to $2.07 trillion, in the second quarter to a level of $19.49 trillion.  And all that thought about GDP got me thinking of this great cartoon that circulated during the Big Bernanke era… 

I have no idea how to get a picture on this set up, so…  Big Ben and Paul Krugman are walking down a country road, and Paul says to Ben.. I’ll pay you $20,000 to eat that pile of bull crap. Ben says, “Deal”!  Then Ben says to Paul, I’ll pay you $20,000 to eat the pile of bull Crap, and Paul says, “deal”! Ben then says, “I’m feeling pretty sick, we both ate a pile of crap and neither of us is any richer”… To which Paul Krugman says, “You’re missing the big picture, Ben, we ‘ve increased GDP by $40,000, and created two jobs”!   

And that pretty much explains how GDP is created….  pretty funny, eh? 

OK, To recap…  The currencies and metals had an up day yesterday, thus continuing the back and forth, up and down days in trading… But in the overnight markets and early trading the currencies have added to their gains from yesterday, and Gold is up another $4 this morning, so maybe, just maybe because you never know, the back and forth trend has ended! Chuck talks about the talk going around that the Pension funds are contemplating buying Gold, and what that would do to supply… 

For What It’s Worth…  Well, this is quite an interesting article that’s about the ending of the Dollar’s hold on the reserve status, and so on… Longtime readers know that I’ve said this for a long time now, but it’s good to get a refresher, eh?  This article can be found here: https://www.zerohedge.com/geopolitical/crash-looming-yale-senior-fellow-warns-end-dollars-exorbitant-privilege

Or, here’s your snippet: “The riddle once posed in the 1960s by former French finance minister (eventually president) Valéry Giscard d’Estaing is about to be solved. Giscard bemoaned a U.S. that took advantage of its privileged position as the world’s dominant reserve currency and drew freely on the rest of the world to support its over-extended standard of living. That privilege is about to be withdrawn. A crash in the dollar is likely and it could fall by as much as 35 per cent by the end of 2021.

The reason: a lethal interplay between a collapse in domestic saving and a gaping current account deficit. In the second quarter of 2020, net domestic saving – depreciation-adjusted saving of households, businesses and the government sector – plunged back into negative territory for the first time since the global financial crisis. At -1.2 per cent in the second quarter, net domestic saving as a share of national income was fully 4.1 percentage points below the first quarter, the steepest quarterly plunge in records that go back to 1947.

Unsurprisingly, the current account deficit followed suit. Lacking in saving and wanting to grow, the U.S. levered its exorbitant privilege to borrow surplus saving from abroad. That pushed the current account deficit to -3.5 per cent of gross domestic product in the second quarter – 1.4 percentage points below that in the first period and also the sharpest quarterly erosion on record.   

While a Covid-related explosion in the federal government deficit is the immediate source of the problem, this was an accident waiting to happen. Going into the pandemic, the net domestic saving rate averaged just 2.9 per cent of gross national income from 2011 to 2019, less than half the 7 per cent average from 1960 to 2005. This thin cushion left the US vulnerable to any shock, let alone Covid.

As budget deficits pile up in the years ahead, further downward pressure on domestic saving and the current account will intensify. The latest estimates of the Congressional Budget Office put the federal deficit at 16 per cent of gross domestic product in 2020 before receding to “just” 8.6 per cent in 2021. Assuming the US Congress eventually agrees to another round of fiscal relief, a much larger deficit for 2021 is likely.”

Chuck again…  Yes, like I’ve tried to explain numerous times previously, the pandemic just hurried along the rot that was on the economy’s vine, folks… And it’s nice to see someone else express this point! 

Market  Prices 10/6/20: American Style: A$ .7167,  kiwi .6656, C$ .7546, euro 1.1802, sterling 1.2956, Swiss $1.0945, European Style: rand 16.4645, krone 9.1919,  SEK 8.9012, forint 304.40,  zloty 3.7990,   koruna 22.8985, RUB 78.21, yen 105.63, sing 1.3588, HKD 7.7499, INR 73.28, China 6.7893, peso 21.25,  BRL 5.6388,  Dollar Index 93.36,  Oil $40.32,  10-year .78%, Silver $24.42, Platinum $887.00, Palladium $2,417.00, and Gold… $1,918.22

That’s it for today…  Well, it was quite chilly here yesterday morning, and today things are a bit warmer, good thing! I was thinking the other day that we are in need of an “Indian Summer”…  Which usually follows a cold spell in the fall… I saw the other day that for Halloween we’ll have another full moon, which would be a Blue Moon… Pretty cool…  Sorry for the tardiness of the letter, I had to stop and go put the trash and recycle bins out, I forgot to do that last night, and I had to wave down the truck to see my bins… the joys of owning a home! HA!  Ok…  Red Rider takes us to the finish line today with their song: Lunatic Fringe…  a 1980’s song, that my good friend Rick will enjoy!  I hope you have a Tom Terrific and Mighty Manfred the wonder dog day, and will Be Good To Yourself!

Chuck Butler

 

Rocktober 5, 2020

* Back & forth, up then down trading continues

* Oil slides downward again… 

Good Day… And a Marvelous Monday to you! Well, it was a bad weekend, sports wise, for me this past weekend, as both my beloved teams lost… My Cardinals forgot how to hit a baseball again on Friday night, and they were ushered out of the playoffs, after such a promising Game 1 victory… UGH! And then on Saturday, my Missouri Tigers forgot how to play defense in their loss at Tennessee, so I sat a sulked all day on Sunday! I’m only on page 600 of a 965 page book, so I did some reading, not making much of a dent in those remaining 365 pages!  I hope you have a relaxing, fun, whatever weekend, for mine was a bust! Big Head Todd & The Monsters greet me this morning with their song: Bittersweet…

Well, On Thursday last week, I talked about how the back and forth in markets were really giving me a rash… But Friday was more of the same…. On Thursday Gold closed up $21 to $1,906, and Silver was up 79-cents to $23.79, but on Friday, Gold gave back $7.60 to close $1,898.80 and Silver gave back 10-cents to close $23.69…  In the currencies, the traded stronger on Thursday, only to see about ¼ of a cent was taken from its value on Friday… The Aussie dollar (A$) also gave back ¼ of a cent, on Friday…

OK, it’s a new day, and since Friday was a down day for Gold & Silver, that must mean that today will be an up day… And as I look at the early morning trading in those two metals I see that’s exactly what’s going on, as Gold is up $6, and Silver is up 30-cents… 

And in the overnight markets the euro has regained its mojo, and is pushing higher in the 1.17 handle. The price of Oil has slipped downward again, as it is trading this morning with a $38 handle…  Which can’t be a good thing for the Petrol Currencies….  However, there is one Petrol Currency that has not gotten caught up in the Oil price slide… And that currency is…. drum roll please…. The Canadian dollar/ loonie…  Must be from all that tourism…. HAHAHAHA! As if! 

While I was sulking, yesterday, I got caught up on email.. And that includes watching some videos from Prager U…  And then I thought… why don’t I read some articles that have been sent to me from readers that want my opinion on them…  One of them was about Bitcoin… The reader wanted me to include the price of Bitcoin in the Market Prices roundup…. And…. Talk about Bitcoin on a regular basis….  Basically, I’m going to say the same thing I’ve said before about Bitcoin….  And I’m saying this knowing that many people have made beau-coup bucks in the cryptocurrency… I believe that Bitcoin is a scam…. There’s nothing there folks… I fear about computer hacking, and the thing I think about the most is that Gov’t is going to develop their own digital currency, and when they do that, all other forms of digital currency will most likely be outlawed…. Fed Head Brainard recently mentioned that the Fed is well into their work on their own digital currency…. 

So, I won’t be putting Bitcoin in the roundup, and I won’t be talking about it, that is if I can get away with that, I won’t!

OK…. So, last week I went all bananas on JPMorgan and their 2 new felony counts of price manipulation that gives them 5….   And the wrist slap for their illegal trading wasn’t enough…. But….  I wasn’t aware that the bank now is operating under a “deferred prosecution agreement” with the Justice Department and isn’t likely to mess with the gold and silver futures markets for a while.   JPMorgan is the ringleader of the price manipulation games they play, so… without them in the game….  Maybe, just maybe we can get back to a real price for Gold?   I sure hope so!

And while we’re talking about the revelation last week that JPMorgan received 2 more felony counts of price manipulation, I have a question for the mass media…. “Where has this story been on the 5 or 6 or 10 o’clock news? Local news, national news, cable news? No where! Crickets! And why is that? Because this news doesn’t \no, wait Chuck, don’t go there… You already had a reader tell you to stay out of politics when you said something about the Veritas finding of bundled mailed votes…  So, I know why the mass media has been absent in reporting about these felony charges at the U.S. ‘s largest bank, but that’s going to have to be a discussion on the Butler Patio….

And then there’s this final thing here….  I know in my heart of hearts that this slap on JPMorgan’s wrist and their “deferred prosecution agreement” isn’t going to be the end-all of price manipulation… There’s just too much money involved to these price manipulators to go Cold Turkey and quit….

And Oh, I do have another thought here….  Why did it take the DOJ to find these unlawful trades, and file felony counts? Where was the CFTC? Aren’t they supposed to be the regulator of commodities?  What the hell do we need the CFTC for, when they failed miserably at their jobs?

Well, I had a lot of pent up thoughts on all that as you can tell….  So, as the day went on yesterday, and I’m looking at stuff, I see a headline that says that the “dollar soared back on Friday”…. Really? You call a ¼-cent move “soaring back”?  I wanted to fire off a response but couldn’t find a place to click to respond! Just shows to go ya that you have to be careful who you get your news and market updates from… 

The other misleading headline was this on Thursday… “Jobs come roaring back in Sept”….  Really? Let’s see the previous week 840,000 people filed for Unemployment and last week the number was 837,000… So, I’m to believe that these days, we think 3,000 is to considered “roaring back”? 

And also on Thursday, the Continuing claims increased from the previous week when they were 26.04 Million, last week they were 26.53 Million…. So, once again I can eyeball that and say that more people are staying on Unemployment!    So, then I did a quick computation on the back of a napkin, and came up with an Unemployment Rate of 8.8%…  The BLS said on Friday that the Sept. Unemployment Rate was 7.9% down from 8.4% in August….   

Riddle me this Batman….  The Continuing Claims are still high… And the monthly jobs created by the BLS were 661,000 in Sept, when the jobs created in August were supposedly 1.489 Million… So, take those two things into consideration, and you get a…..  lower Unemployment Rate?  Only the corrupt BLS could compute that, folks…  I’m just saying…

OK, enough of all that jobs talk… It’s all a bundle of confusion about the real number as far as I’m concerned… And really, I have no idea why I spend so much time on it, other than I have this inner drive to prove the BLS and ever other Gov’t report wrong! 

OK, enough of that too…. I’m just going to get myself all riled up and being to yell at the walls, it’s ok, I’m here alone..  No one will hear me, and then it all be me getting my blood pressure rising, when the walls don’t yell back!

Well, The GATA Folks let me know this weekend that this year’s New Orleans Investment Conference, to be held Wednesday to Saturday, October 14 to 17, and will be a “virtual” conference!  The New Orleans Conference is the granddaddy of conferences, and I was always very delighted to be chosen to speak there…. One year, it was held over Halloween…. And if you’ve never been to New Orleans, you would not be aware of the love the people of the are have for Halloween…  Frank Trotter, David Galland and I walked down Bourbon street,  and were amazed at the costumes the people walking up and down the venerable street were wearing…  I haven’t spoken at the NOLA Conference for a number of years now… I remember the crowds there being very lively!  If your interested in logging in to your computer to watch some of the presentations this year, you can click here to find out more: https://neworleansconference.com/wp-content/uploads/2020/09/NOICChrisPow…

The U.S. Data Cupboard last week had some other prints besides the labor reports….  Personal Income & Spending for August showed that Income was down -2.7%, and Spending was up 1%… Uh-oh… Mom, they’re doing it again!  Doing What?  Spending more than they take in…. Doesn’t that indicate that either savings or a credit card were getting used?  Yes…. It does…. Good boy!

There were a couple more prints on Friday… The ISM Manufacturing Index slipped in Sept from August, but my a miniscule amount, and Core Inflation remained at .3% for September…  Both of these reports are simply what the Gov’t wants you to see…  Nothing more, nothing less… 

To recap… The up one day down the next day for Gold & Silver continued through to the end of the week, and is looking as if today will be another run upward…  The currencies also saw some up one day and down another day, but this morning the euro is moving higher in the 1.17 handle, and taking the other currencies along. The price of Oil has slipped to a $38 handle, and all but one Petrol Currency is feeling the heat from this slippage…  Hey! you’ll have to read the letter to find out which currency that is! 

For What It’s Worth….  OK, I’ve got another article from Pam and Russ Martens from their Wallstreetonparade.com web site for you today… This one really hit a nerve with me, so it’ll be interesting to see if it does the same with you… It’s about the Fed NY and their repos, which by the way have gone over $9 Trillion that they’ve doled out to the primary dealers (Casino Banks) since they began this last September… So, this article gets into the meat of what’s going on, and it can be found here: https://wallstreetonparade.com/2020/10/the-new-york-fed-pumping-out-more-than-9-trillion-in-bailouts-since-september-gets-market-advice-from-giant-hedge-funds/ 

Or, here’s your snippet: “

The New York Fed, the unlimited money spigot in times of need by Wall Street’s trading houses, has been conducting meetings with hedge funds to get their input on the markets. More on that in a moment, but first some necessary background.

Millions of Americans have seen the movie The Big Short, based on the Michael Lewis bestselling book by the same name. A key character in the movie is Mark Baum, played by Steve Carell. The character is based on Steve Eisman, who, during the financial crisis of 2008, was employed at FrontPoint Partners LLC, a hedge fund unit of Morgan Stanley. As widely acknowledged, FrontPoint was shorting subprime residential mortgages that were packaged into CDOs (Collateralized Debt Obligations). Shorting means to make a bet that a financial instrument will lose value. FrontPoint was, in fact, hoping American homeowners would be foreclosed on and their subprime mortgages would become worthless.

But here’s what else FrontPoint was shorting. Lewis writes in his book that during the financial crisis Eisman, while at FrontPoint, “shorted Bank of America, along with UBS, Citigroup, Lehman Brothers, and a few others.” Lewis notes further that “They weren’t allowed to short Morgan Stanley because they were owned by Morgan Stanley, but if they could have, they would have.”

The New York Fed was in charge of almost all of the secret $29 trillion in bailouts during the 2007 to 2010 financial crisis. Congress never approved these loans or was even aware of where the money was going. After the Fed lost a multi-year court battle to keep its bailouts a dark secret from the American people, we learned that Morgan Stanley was one of the largest recipients, receiving a cumulative total of $2.04 trillion according to the audit conducted by the Government Accountability Office (GAO).

Buried deep in the GAO audit is this bombshell:

“Morgan Stanley funds include TALF borrowing by funds managed by FrontPoint LLC, which was owned by Morgan Stanley at the time TALF operated.“

TALF was one of the Fed’s bailout programs. Which means the Fed was subsidizing FrontPoint with super cheap funding as it was shorting the hell out of the very banks that the Fed was desperately attempting to prop up with trillions of dollars in secret loans.”

Chuck again…  Sure that makes abundant sense doesn’t it? The Gov’t was bailing out a company that was shorting banks the same banks the Gov’t was trying to prop up?  I shake my head in disgust at all this…  Oh, and there are more goodies like that in this article, so if you have the time, check it out! 

Market  Prices 10/5/20: American Style: A$ .7185,  kiwi .6648, C$ .7535, euro 1.1770, sterling 1.2960, Swiss $1.0911, European Style: rand 16.4152, krone 9.2545, SEK 8.8940,  forint 304.28,  zloty 3.8227,   koruna 23.3216, RUB 78.10, yen 105.60, sing 1.3602, HKD 7.7498, INR 73.09, China 6.7899, peso 21.45,  BRL 5.6828,  Dollar Index 93.54,  Oil $38.72,  10-year .71%, Silver $24.09, Platinum $889.00, Palladium $2,357.00, and Gold… $1,905.80

That’s it for today…  I think that I’m going to boycott Twitter… I only use the social media site to see what the economists that I follow have to say, but every now and then a rogue post hits my screen, and there was one Friday that said, “The President has the virus, I hope he dies”….  What? You hope someone dies? What have we become? First it was “death to America” and now it’s “death to the president”?  The Twitter folks should track down this person and ban them from the site! But that won’t happen, it’s freedom of speech, right? I’m just going to choose not to see their freedom of speech! I use Parler now more anyway!  It’s 36 degrees outside this morning! BRRR!  I had to make the switch from Cool to Heat on the thermostat over the weekend, as the house was getting too cold for me! I used to have a rule of no A/C before May, and no Heat before Nov. But I guess I broke that rule!  This is day 15 of being alone… Oh! no Pfennig this Thursday, it’s my monthly visit to my oncologist…  Bill Withers takes us to the finish line today with his song: Lovely Day, which I hope it turns out to be… I heard this one on a Commercial recently, and thought… I guess I’ll have to delete it from my songs, now…  HA!  I hope you have a Marvelous Monday, and Please Be Good To Yourself! 

Chuck Butler

 

Rocktober 1, 2020

*Currencies move higher yesterday and overnight!

* Gold loses $12 yesterday, but is up $13 this morning…. 

Good Day… And a Tub Thumpin’ Thursday to you!  And welcome to Rocktober! I almost didn’t answer the bell this morning, as yesterday I didn’t get my afternoon nap, and last night, I fell asleep in my chair for the first 5 hours, then I climbed the stairs at 3 in morning to go to bed, and when the alarm went off… I said, “to hell with it,” and turned it off… But within a few minutes, my conscience got to me, and so here I am….  But not bright-eyed and bushy-tailed, for sure! In fact, I’m cranky! I have to think of something that will cheer me up… Oh! That’s right! My beloved Cardinals won Game 1 of their best of 3 series with the Padres yesterday!  Now, I’m in the mood to talk! Neil Young greets me this morning with his song from the great Harvest album: Out On The Weekend….  “think I’ll pack it in and buy a pickup, head on down to L.A.”…. 

Up one session, down the next…. This back and forth is about to give me a rash folks…. Like when I’m driving behind a guy on the highway, and he keeps weaving over into my lane. I say, “Come on bud, pick a lane, any lane, there are 4 of them to choose from”  I’m saying to the currency and metals traders, come on pick a direction, and stick with it….   I know in my heart of hearts that most currencies traders want to sell dollars right now, but then there’s the wolf (PPT) that’s always at the door, and traders are a fickle group of people… So, even though they know they should be selling dollars, they aren’t because of the PPT hanging over them like the Sword of Damocles….

So, yesterday, the currencies recovered the ground they lost in the overnight markets, but Gold never recovered its early morning loss of $12 and closed at $1,885.00 and Silver lost another 52-cents to go with the 46-cents it had lost in the early trading to close down 98-cents at $23.30….  The ADP Employment report showed that 790,000 jobs were added in September… One would think that hearing that kind of news would have pushed the dollar higher on the day, but it didn’t… except VS Gold & Silver…

And in the overnight and early trading markets, the dollar has continued to be sold… The currencies added to their gains yesterday, and Gold & silver have erased those losses from yesterday! Gold is up $13.50 this morning, and is once again within spittin’ distance of $1,900, and silver is up 50-cents this morning…  

And the fallout from the Presidential debate Tuesday night, sure didn’t give dollar holders any warm and fuzzy feelings… Recall I told you that I didn’t watch it, live… Watched some of it yesterday afternoon, and all I can say is that we learned one thing… The contempt that these two men have for each other”….  OMG… Did they have to display it to everyone, even the country’s creditors?

So… that’s done, and we await the 2^nd debate, which by all accounts has to be better than the first one….  My suggestion to the group of guys that came over to watch the baseball game with me outside yesterday, was simply to give a “mute button to the Host”, and if a debater tries to interrupt his counterpart, he gets muted”  now that would stop all those interruptions wouldn’t it?

Not that I want to turn the Pfennig into a letter on Politics, but this was so bad…. That I had to talk about it! HA!

OK… So, the dollar bugs are running away once again… What gives?  Yesterday they were puffing out their collective chests, and today they are cowering behind the wall boards they came from…  One day sure makes a difference, eh? But it’s these one day moves, and then backward the next day that are really giving me a rash… 

Well, it appears that the Bank of England (BOE) is definitely going to go negative with their rates very soon… Recall I told you a couple of weeks ago that they were thought to be leaning in that direction? Well, from what I read the BOE has sent signals to the markets that negative rates are on the docket for their next meeting.  

And you’d have to be a longtime reader to recall this, but… as I used to say long ago, that whatever happens in the U.K. seems to come to our shores about 6 months later, which would mean the U.S. economy will have dived deeper into the depression, and the Cartel, I mean the Fed will have no other choice but to go negative with rates… What’s the diff? The “real interest rates” are negative already, might as well go the rest of the way… 

These are not my thoughts, folks… I’m just telling you what the cartel, I mean the Fed, will be thinking… Oh, and by the way for those of you new to class, “real interest rates” are the current rate minus inflation…  Well, now that I’ve ruined your day, because you didn’t know that we were already in negative rates, I’ll try to do something to cheer you up! 

I’ve been treating myself to a lot of music lately from Leon Russell, and JJ Cale… Great stuff, but as I was looking for more, I came across some stuff that JJ Cale and Eric Clapton did together…. It’s been a long times since I bought a CD, but I just had to have this recording titled: The Road To Escondido, by JJ Cale and Eric Clapton…. It arrived sometime yesterday ( I was preoccupied with baseball) and so I can’t wait to get it in the CD player this morning! 

There did that make you feel better? I sure hope so… Because I’ve got nothing else, but complaints, whining and gloom and doom up my sleeve, ala Bullwinkle! 

The U.S. Data Cupboard yesterday had the ADP Employment Report for September, and they showed that 749,000 jobs were added, which I’m thinking that those won’t last too long… OK, because I see the economy dragging its feet… 

And today’s Data Cupboard is chock-full-o-data! The Initial Jobless Claims for last week will print, along with the Continuing Claims, which to me is more interesting… In addition, we’ll see the color of the Personal Income and Spending reports for Sept. These are important economic prints folks… And finally, the ISM Manufacturing Index for September will also print, and is also an important economic report… So, we’ll see 4 real economic reports in one day!  

To recap…  The currencies turned the tables on the dollar bugs yesterday, and then continued throughout the night to move higher VS the dollar. Gold gave back $12 yesterday, but is up $13 this morning… Chuck is growing tired of the back and forth, and just wants traders to pick a lane, I mean direction and stick with it! 

For What It’s Worth….  It’s been some time since I last was allowed to view articles on Bloomberg.com, but last night in my perusal of Twitter, I clicked on a Tweet about major U.S. companies laying off Thousands of workers in one day, and it then took me to Bloomberg, where you’ll find this article that really spells out the problems for the economy, and it can be found here: https://www.bloomberg.com/news/articles/2020-09-30/disney-shell-cuts-mark-warning-sign-for-global-economic-rebound

Or, here’s your snippet: “Tens of thousands of job cuts announced by blue-chip companies in a 24-hour period are a warning sign for the world’s recovery and emerge just ahead of two key reports forecast to show limited progress in the U.S. labor market.

In one of the biggest layoff announcements since the pandemic caused widespread economic shutdowns, Walt Disney Co. said late Tuesday that it’s slashing 28,000 workers in its slumping U.S. resort business. In the hours that followed, the pace of job cuts at some of the world’s biggest companies — across in a range of industries from energy to finance — quickened.

On Wednesday, Allstate Corp., the fourth-largest car insurer in the U.S., said it will cut 3,800 jobs, roughly 8% of its workforce. And Bloomberg reported that Goldman Sachs Group Inc. plans to cut roughly 400 jobs after temporarily suspending job reductions at the beginning of the crisis.

Announcements like these point to further challenges in a rebound that’s already slowed after an initial bounce back in May and June. Weekly figures due Thursday are estimated to show filings for U.S. unemployment benefits remain far above pre-virus levels, while Friday’s jobs report — the last before the November presidential election — is expected to reveal that employers added a half-million fewer workers in September than in August.

“Job losses were at first concentrated in service-sector jobs, but in any economic downturn you’re bound to get some more pruning as corporations are trying to protect profit margins,” said Brett Ryan, senior U.S. economist at Deutsche Bank Securities Inc. “You’ll see larger companies that may have been on a certain revenue trajectory before the downturn start to reevaluate.””

Chuck Again…. Yes, we’ll see the latest Weekly Initial Jobless Claims in just a few minutes this morning, so hold tight….

Market  prices 10/1/20: American Style: A$ .7203, kiwi .6652,  C$ .7526, euro 1.1753, sterling 1.2957, Swiss $1.0898, European Style: rand 16.6200, krone 9.2796, SEK 8.9200,  forint 306.08,  zloty 3.8226,   koruna 22.9013, RUB 78.24, yen 105.50, sing 1.3620, HKD 7.7500, INR 73.03, China 6.8012, peso 21.84,  BRL 5.6274,  Dollar Index 93.54,  Oil $39.47,  10-year .70%, Silver $23.80, Platinum $906.00, Palladium $2,372.00, and Gold… $1,899.70

That’s it for today and this week… I’ll have my thoughts on tomorrow’s Jobs Jamboree for you on Monday, you can be sure of that!  So, I’m sure most of you know my reason for calling this month Rocktober, and some of you are wondering what the heck is Rocktober all about?  Well, it’s Pfennig Tradition… I’ve writing the Pfennig now for 28 years, and when it was young, I decided to call this month, Rocktober, and that’s that! That first inning of the Cards/ Padres game yesterday, was quite the surprise, as the Cardinals brought their bats that haven’t had much use, to San Diego, and put up 4 runs and then added a few more to win the game…  Now, if they can do the same today….   I sure hope their not like the currency and metals traders!  The Cardinals will send the wily old Veteran, Adam Wainwright to the hill today, in hopes that he can conger up more magic….   The Beatles takes us to the finish line today with one of my fave songs by them: Norwegian Wood….   OK, short-n-sweet for you today, and with that I hope you have a Tub Thumpin’ Thursday and a Fantastico Friday tomorrow…. And Please Be Good To Yourself!

Chuck Butler

September 30, 2020 

* currencies & metals give back gains overnight… 

* Chuck asks, why do people keep getting more stupid? 

Good Day… And a Wonderful Wednesday to you! Well, did you watch the debate last night? I didn’t because after cooking for 2 hours, yesterday, for some reason, I just didn’t have anything left in the tank. So I sat down, played some music and forgot about the debate… I’m sure I know who “won” the debate, without looking…  But I’ll be checking that out later this morning…  I forgot to congratulate the Tampa Bay Lightening on their Stanley Cup Championship that was won Monday night…  Well, I hope they get to each individually get the Cup for one day, as is tradition. I say that because the new hockey season begins December 1^st!  Yes, less than two months of “down time”… I’m still waiting for the folks at Roger Dean Stadium to let me know about my spring training season tickets… The Stadium only has about 6,500 seats, so if they spread people out, this could get interesting! Tom Petty and the Heartbreakers greet me this morning with their song: You Got Lucky….  

Funny story, for years that I’ve been getting scans, I get into the room and they ask me about my medical history (as if they couldn’t look it up!) and I tell them about losing my left kidney, part of my right femur, my left eye, and I still have cancer in my right jaw, and then I tell them, “They call me Lucky”… That always gets a chuckle out of them!

OK, onto the markets…. Well, the dollar bugs had really retreated yesterday… Last week at this time I was telling you that they were dancing in the street and inviting their neighbors to join them… And a week later the dollar bugs had all returned home to the wall boards they crawled out of!  The euro is leading the currencies back to higher ground, and Gold closed up $16 on the day to bring it back to within’ spittin’ distance of $1,900… 

However, the overnight markets have not been kind to the non-dollar assets.. Gold has lost $12 and Silver has lost 46-cents in the early trading today. There was nothing in the news or rumors or anything that would cause this reversal of yesterday’s moves… So, was it the wolf at the door? Sure smells like it to me… 

The dollar didn’t get sold yesterday, on the basis of the results of the Consumer Confidence Index for this month, as the index rose to an unbelievable high of 101.8 from 86.3 last month… I guess the 3 consecutive weeks of stock losses didn’t faze the folks they asked… And as usual, they didn’t dare ask me!  What on earth are these people who are confident smoking? Or drinking? Or just being plain stupid?  The Pearls Before Swine cartoon yesterday, had rat telling goat that…. for the fist time in history we have all the collective knowledge of the world in our hands. We can know anything we want to know about anything instantaneously… So, how did People get stupider?   Goat says, “you should Google that”, and Rat replies, “it’s says no clue”….

I emailed the cartoon to by good friends saying… I ask this question every day!  How in the world have people got more stupid?  Well, I’ll give you my two cents on that thought…. I believe it’s because of the education they receive…  When they don’t have to compute math equations any longer, or know the capital of every country in the world, or whatever, the knowledge gets weaker and weaker with every year….  And Google… Instead of having to know something, they can just Google it… I’m just saying…

I have something for you this morning, stay with it… read it carefully, because it proves me to be correct about price manipulation, etc.    here we go… Yesterday, I read a report from Wallstreetonparade.com  and it in they reported that Union Bank of Switzerland (UBS) had said that “Now that Indictments Have Outed Gold Manipulations at JPMorgan, UBS Says “Buy Gold” And that all sounds good, right?  Well, on the same day, I read on a GATA email that, “Don’t think for a moment, the TF Metals Report’s Craig Hemke writes today at Sprott Money, that manipulation and corruption in the monetary metals markets will stop with JPMorganChase’s admission of rigging them and the bank’s paying a $920 million fine.

Market rigging, Hemke writes, remains too easy and profitable and the market regulators too corrupt or incompetent to stop it.”

Chuck again… Yes, I agree, the market regulators are both too corrupt and too incompetent to stop it!

Oh, and once again JPMorgan has admitted to two new Felony counts of price manipulation, which brings the total to 5 Felony counts that have all occurred under Jamie Dimon’s leadership… or lack of, whichever you choose to use…   Now that’s me talking…  Here’s Pam and Russ Martens of wallstreetonparade.com  Read carefully…

“Under the richly compensated leadership of Chairman and CEO Jamie Dimon, JPMorgan Chase, the largest bank in the United States, has admitted to an unprecedented five criminal felony counts since 2014 and put on criminal probation three times. Dimon notched two of those felony counts in his belt today. (That’s five felonies more than the bank pleaded guilty to in its prior 100 years of existence. Translation: this is not normal even on Wall Street.)

The bank has agreed today to pay criminal fines and admit to two felony counts of wire fraud for manipulating (spoofing) trading in the precious metals and U.S. Treasury markets. Why the Justice Department is bringing only two counts when its own charging document indicates that traders engaged in “tens of thousands of instances of unlawful trading in gold, silver, platinum, and palladium…as well as thousands of instances of unlawful trading in U.S. Treasury futures contracts and in U.S. Treasury notes and bonds…” is one more sign that this Justice Department is egregiously failing the American people and making a mockery of the word “justice.””

Chuck again…  I just had to include their explanation of what’s going on at JPMorgan’s metals and Treasuries desks…. Now, back to regular programming… Oh, and JPMorgan’s fine?  It was $920 Million… Like I said earlier this week, that’s just chump change for what they made doing the unlawful trades… 

So… the question is this about the dollar rebound overnight… As I said yesterday, the wolf is always at the door here, and we had better not forget it… And like I said above, this rebound overnight smells of PPT….  But they’ll come a time when the markets say, “to hell with the PPT, we’re selling dollars before we get caught holding them” And when that day comes, and it will come in my opinion, I don’t think the PPT will want to stand in front of that bus…. Do you? 

The U.S. Data Cupboard yesterday had the aforementioned stupid Consumer Confidence. In addition, it also had the Case/ Shiller Home Price Index for July, which showed that home prices were rising at a good clip in July… Of course we’re one day away from Rocktober, so that data is a little stale, eh?

Today’s Data Cupboard has the ADP Employment Report for Sept, which the forecasters believe will be around 430,000, which if you were paying attention in class on Monday, I told you that the forecasters has thought the BLS Jobs Jamboree would be around 880,000…. Now there’s a Big Difference there isn’t there? As always, I say we should pay attention to the ADP report, but then that would mean the markets had to change their minds, and we can’t begin to have that happen! They aren’t smart enough to adapt, Change, innovate…  In addition, the 2^nd Revision of 2^nd QTR GDP will print and is expected to remain unrevised at negative 31.7%…  And there will be a regional manufacturing index that I’m boycotting, so we’ll just move along from here…

To recap…. The dollar bugs had all returned home to the wall boards they crawled out of yesterday, but that all reversed in the overnight markets…  Gold climbed higher by $16 to $1,897, and Silver followed along…  But has given those gains back early this morning… JPMorgan has admitted to being guilty of 2 more felony counts on price manipulation of metals and Treasuries…  Chuck has a long explanation of it all from the good folks at www.wallstreetonparade.com   In addition Chuck asks how people continue to just keep getting more stupid?

For What It’s Worth… since I spent a good part of the morning going through the price manipulation felony counts against JPMorgan this morning, I thought that this article tied it all up in a neat little bow for you… It’s an article about who’s behind all this price manipulation at JPMorgan, and can be found here: https://www.zerohedge.com/markets/how-jpms-precious-metals-trading-desk-manipulated-markets-crime-ring-within-bank?utm_campaign=&utm_content=Zerohedge%3A+The+Durden+Dispatch&utm_medium=email&utm_source=zh_newsletter

Or, here’s your snippet: “There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to “provide liquidity”, when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take “complicated” financial concepts at the face value set by a self-serving establishment, never dared to question anything.

All that changed in November 2018 when a former JPMorgan precious-metals trader admitted he engaged in a six-year spoofing scheme that defrauded investors in gold, silver, platinum, and palladium futures contracts. John Edmonds, then 36, pled guilty under seal in the District of Connecticut to commodities fraud, conspiracy to commit wire fraud, commodities price manipulation, and spoofing, a trading technique whereby traders flood the market with “fake” bids or asks to push the price of a given futures contract up or down toward a more advantageous price, and to confuse other traders or HFTs which respond to trader intentions by launching momentum in the other direction. As FBI Assistant Director in Charge Sweeney explained at the time, “with his guilty plea, Edmonds admitted he intended to introduce materially false and misleading information into the commodities markets.”

A little more than a year later, former Deutsche Bank precious metals trader David Liew sat in a federal courtroom telling a jury about how he learned to ‘spoof’ markets from his colleagues, and that he considered the behavior to be “OK” because it was “so commonplace.” Unfortunately for him, federal authorities didn’t see it that way, and have aggressively prosecuted the big dealer banks for market manipulation across a variety of markets. His testimony led to convictions for two of his former coworkers. A few days later, JP Morgan agreed to settle similar allegations with a record $1 billion fine, netting another major victory for the government in the nearly decade-long campaign to root out manipulation from the precious metal markets.

Today, Bloomberg is finally catching up to years of “conspiracy theory” reporting, such as this article published here in 2014 and titled “Gold Rigging By Bullion Banks Exposed: The Complete Chart“, with a sweeping expose about the precious metals manipulation and spoofing scandal, focusing on the precious metals trading desk at JPM and its top trader, Mike Nowak.

And although Bloomberg inexplicably did not mention it even once in its lengthy report, Nowak’s desk was under the direct purview of Blythe Masters, who from 2007 until 2014 was the head of Global Commodities at JPMorgan.   

Which is ironic because going all the way back to 2012, the “tinfoil hat” crowd was abuzz with speculation that central banks, perhaps in league with the big broker dealers and occasionally aided by HFT momentum ignition, were conspiring to manipulate precious metals prices. When questioned about this in an interview with CNBC, Masters denied that JPMorgan was engaged in any manipulation, and instead insisted that JPM’s precious metals desk was reputable a “client-driven business.”

“Our business is a client-driven business where we execute on behalf of clients to help them with their…risk management objectives,” Blythe Masters said before going on to claim that the bank runs a “balanced book”, where its long and short positions are always evened out. But the punchline was when Master, who is perhaps best known for discovering the Credit Default Swap, said that manipulating markets to benefit the bank’s positions to the detriment of clients would be  “wrong, and we don’t do it.””

Chuck again…So where are all those naysayers that laughed at me, and made me stop talking about price manipulation now?  And to Blyth Masters’ comment about price manipulation would “be wrong and we don’t do it” I say… OOPS!  

Market Prices 9/30/20: American Style: A$ .7122,  kiwi .6578, C$ .7469, euro 1.1708, sterling 1.2830, Swiss $1.0838, European style: rand 16.8254, krone 9.4805, SEK 9.0253,  forint 312.08,   zloty 3.8871,   koruna 23.2323, RUB 79.08, yen 105.72, sing 1.3692, HKD 7.7499, INR 73.64, China 6.8168, peso 22.34,  BLR 5.6491,  Dollar Index 94.10,  Oil $39.15,  10-year .64%, Silver $23.81, Platinum $880.00, Palladium $2,382.00, and Gold… $1,885.60

That’s it for today… Well, today’s the day… My beloved Cardinals start their best of 3 playoff series with the Padres…  The American League started their playoffs yesterday, and the National League starts their playoffs today.  The Cardinals need to steal game 1…  I’m just saying… Man did I go Emeril in the kitchen yesterday, and made a very yummy dinner for me and Alex, I’m not doing that again! I am going to make some pig-cluckers today, but the Big Green Egg will do most of the work! It’s been 11 days now that, for the most part I’m alone… I liked it at first, but now it’s beginning to become a drag… Deep Purple takes us to the finish line today with their song: Hush….   And with that, I hope you have a Wonderful Wednesday, and I ask you to please, Be Good To Yourself!

Chuck Butler

 

September 29, 2020

* The overnight markets sell dollars! 

* What up with the weakne

Good Day…  And a Tom Terrific Tuesday to you! Well, I tried something new for today… I got an instacart app, ordered our groceries and today I go pick them up, and they’ll bring them out to the car! No more having to walk around a grocery store with a face mask on….  ( I always had the feeling that they were going to arrest me with my mask on!) But no more! I could have them delivered to me, but I need to get out and drive my car a bit more, as I’m now getting 1 month to a gallon of gas! Tomorrow will be a busy day for me, as I go to the eye doctor to get a new prescription for my one eye… I ask them every year why the bill for such procedure isn’t cut in half, since they only have to deal with one eye, and they always look at me like a deer in headlights… and  then I need to get ready, as my beloved Cardinals begin their playoff series with the Padres…. Man did it turn cooler yesterday, I wore my Blues hoodie all day and evening… And the wind last night was taking no prisoners…. UGH!  Graham Nash greets me this morning with his song: I Used To Be A King…   (I relate that song’s lyrics somewhat!, not that I was once a King, but… I was somebody… I’m just saying)

Well… The reason I went into that bit of depressing stuff was I read an article last night in Grant Williams’ Things That Make You Go Hmmm, and it was about as people, especially men, get older they lose that feeling of relevance, and that takes them down a deep rabbit hole that most do not come out of….  But I am STILL somebody, I’m my wife’s husband, my kids’ dad, my grandkids, General, and so on… And I have thousands of dear Pfennig Readers too!  So, I haven’t lost that feeling of being relevant… yet…

OK… Well, I told you yesterday that the dollar bugs had backed off their assault on the currencies and metals, and that was quite evident in Gold & Silver… Gold closed up $20 on the day, at $1,881.20, and Silver closed up 71 cents to $23.71…  The currencies held their ground, and some moved positively VS the dollar, but the moves were very small… But at least they held their gains from late last week…. Which is saying a lot, given the PPT is like the wolf, and is always at the door….  The PPT’s knocking on the door… Do Not open the door and let ‘em in!  (a play on the Paul McCartney song) 

In the overnight and early morning trading the dollar bugs have retreated even more. Gold is up a buck or two, and the euro is back above 1.17…  It’s a watered down version of the trading pattern we witnessed a few weeks ago, where the overnight markets sold dollars, and the U.S. markets bought dollars…  There are just so many articles out there, folks, that are talking about a collapse of the dollar is coming…  

But who said that first? Yes, they’re all jumping on my bandwagon, let’s hope that bandwagon doesn’t lose a wheel, eh?  Even the former head of economics at Morgan Stanley, Stephen Roach, is now on the bandwagon, and when he joined, it gave me a feeling of vindication for my thought… 

So, what’s up with the Russian ruble being so weak these days?  Well, according to an article on the Russian Times website,  the weakness can be attributed to the rise of coronavirus cases in the country. Negative investor sentiment and low oil prices, which were down in morning trading amid concerns over the possibility of new coronavirus restrictions, also affected the ruble exchange rate.

Last week, the Ministry of Economic Development said the ruble had weakened due to temporary factors, such as rising geopolitical strife and other risks felt by the financial markets.  But then they also said that they expected the ruble to rebound and average a price of 71.2 rubles to the dollar. It currently is at its lowest price of 78.71 since April of this year, when the Oil price plummeted….

So, all you ruble holders, don’t despair… We’ve seen these weak spots for the ruble before, and it has always rebounded nicely… And I fully expect to see a rebound here in due time… 

Well, what have we here?  New Zealand recorded its largest trade surplus since 2014 this month… Now normally that would be cause for celebration, but… because of the pandemic closing the economy down, this cause of celebration has been cancelled, because, it’s all about the pandemic… I’ve gone through this before for one of my fave countries… New Zealand is an Islands nation, and therefore besides, wool, lumber and dairy, they have to import just about everything, and that puts a strain on their current account, and in the past when New Zealand would post a trade surplus, it would mean that the demand for wool, lumber and dairy had exceeded expectations. And THAT my friends, would cause for celebration!

I do understand that this trade surplus was helped by a rash of dairy order deliveries, so one out of 3 ain’t bad… Shoot Rudy, 1 out 3 will put in baseball’s hall of fame!….  I’m just saying…

The U.S. Data Cupboard has the Case/Shiller Home Price Index for August to print today, along with the stupid Consumer Confidence report for September….  In August the Consumer Confidence Index rose to 89 from 84 the previous month… But I’m pretty sure that given the poor performance of the stock market in recent weeks that this index number will be weaker for September… But then it should be very weak, in my opinion… But don’t let that get in the way of a good time, eh?

There will also be 4 more different Fed Head speeches today, with Fed Heads Williams and Clarida doubling up to make two different speeches, for a total of 6 collective speeches today… I doubt that any of them say anything to upset the applecart, but…. If I were there I would ask them, “just what’s up with your backing off buying Corp Bonds and ETF’s?”  But I’m not there….

I have a funny story for you… Quite a few years ago now, I was invited to a breakfast meeting with St. Louis Fed President, James Bullard the featured speaker, with a  Q&A session following… I woke up that morning with laryngitis and couldn’t ask him any questions!  Chris Gaffney and Frank Trotter thought it was very funny…. I of course did NOT!

The Eurozone will also print their version of a Consumer Confidence report today, and I’ll betcha dollar to a Krispy Kreme that theirs is weaker! They’ll also see indexes on Services Confidence, Business sentiment and Economic outlook…  So, the whole shootin’ match in one morning’s data prints, sure sound like the way to do it to me!

To recap… The dollar bugs remained on the sidelines again on Monday, and the currencies inched higher while Gold gained $20 and Silver 71-cents….  OMG! Did I ever make an error in yesterday’s Pfennig, saying that Silver closed at 23-cents… instead of $23.00! What a dolt! And only one reader caught it…. Or maybe you’re just tired of highlighting my fat finger errors…. The overnight markets were….

Before I head to the Big Finish today…. So, project Veritas has found voter harvesting in Minnesota….  I just knew that this mail in votes thing was going to get really ugly, and it’s already starting….  I’ve absentee voted several times in my life but never for a Presidential election… That’s a day I like to go and see the ilk of the people that are there to vote…. 4 years ago, I bumped in a neighbor while getting ready to vote, and she said, “I guess we’re here to cancel each other’s votes”….  I couldn’t have agreed with her more! 

For What It’s Worth….  I find this news to be somewhat bad… Of course I don’t know what shape the world will be in 15 years, but this is an article about the California Gov. who signed a law that prohibits the sale of gas fueled vehicles by 2035, and it can be found here: http://www.restoreamericanglory.com/breaking-news/california-governor-signs-order-no-gas-using-vehicles-after-2035/

Or, here’s your snippet: “In a ludicrous move against climate change on Wednesday, California Gov. Gavin Newsom (D) signed an executive order that will prohibit car companies from selling cars and passengers trucks that produce emissions after the year 2035. The order, which is a transparent attempt on Newsom’s part to set himself up for a presidential run down the line, was touted as a move to help California to move closer to its stated “Greenhouse Gas Emissions” goals.

“This is the most impactful step our state can take to fight climate change,” said Newsom. “For too many decades, we have allowed cars to pollute the air that our children and families breathe. Californians shouldn’t have to worry if our cars are giving our kids asthma. Our cars shouldn’t make wildfires worse – and create more days filled with smoky air. Cars shouldn’t melt glaciers or raise sea levels threatening our cherished beaches and coastlines.”

At a press conference announcing the order, Newsom encouraged other states to follow California’s lead. But while Newsom was busy worrying about turning himself into America’s Grand Leader on Climate Change, there were some within his own party who wondered how the state’s non-rich residents could possibly afford to make the switch.

“The EV’s pictured in today’s signing of the EO cost more than $50k each,” tweeted Assemblyman Jim Cooper. “How will my constituents afford an EV? They can’t. They currently drive 11-year-old vehicles. This doesn’t even take into account the strain an all-electric vehicle fleet will have on our state electric grid.”

As of last year, only 6% of vehicles sold in California meet the standards set by the governor in his order.

Even so, Newsom’s office insisted that fifteen years would be enough time for things to change.”

Chuck Again… Yeah, in 15 years, we may well have figured out that the we all didn’t die from climate change, and then what happens?  I’m just saying…

Market  prices 9/29/20: American Style: A$ .7133, kiwi .6595, C$ .7477, euro 1.1703, sterling 1.2866, Swiss $1.0842, European Style: rand 16.9535, krone 9.4415, SEK 8.9905,  forint 312.05,  zloty 3.8739,   koruna 23.18235, RUB 78.71, yen 105.62, sing 1.3684, HKD 7.7498, INR 73.72, China 6.8149, peso 22.19, BRL 5.5895,  Dollar Index 94.05,   Oil $40.57,  10-year .65%, Silver $23.78, Platinum $874.00, Palladium $2,170.00, and Gold… $1,884.50

That’s it for today…  I was looking over all the pictures I have on my wall that’s the backdrop for my writing desk, and one of them is hilarious! Years ago, at EverBank, we used to sponsor this matchbox car race, and the folks on the desk would dress up as a group to see if we could win a prize for that, because our car entry was always a dud… One year, the folks on the desk decided to dress at the Flintstones…  And they did win! And the picture of them is hilarious!  I received fantabulous news from good friend Dennis Miller last week… He is cancer free!  His latest Pet Scan showed no sign of cancer…  Give thanks and praise to the Lord (Bob Marley)  Last week, Dennis’ weekly letter, which can be found here: : https://milleronthemoney.com/free/ He interviewed me! I really let loose in the interview too, so check it out and sign up for his letter if that floats your boat!  The Moody Blues take us to the finish line today with their song: I’m Just A Singer (In a Rock & Roll Band) …  I used to identify with that song!   And with that, I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler

September 28, 2020

* the dollar bugs backed off late last week… 

* Gold & Silver… up, down, and up… 

Good Day… And a Marvelous Monday to you! Well, my beloved Cardinals kind of stumbled, and fumbled its way into the playoffs this year, but…. As 2006 will remind everyone that follows baseball, the important thing is to get into the playoffs, for you never know how it will all play out….   My beloved Missouri Tiger (Mizzou) didn’t turn out to be a blood donor for Alabama on Saturday night, and they beat the spread, which was a whopping 28 points! I think the SEC was getting back at Mizzou for crashing their SEC Championship games 2 consecutive years a few years ago…. The two teams added to the Tigers schedule, this year,  were Alabama and LSU….  Oh well…  You’ll never get better playing the Little Sisters of the Poor! That’s my story and I’m sticking to it! The Ozark Mountain Daredevils greet me this morning with their song: If You Wanna Get To Heaven…  …. You’ve got to raise a little hell….  Which has been my frame of mind while writing the Pfennig over the years!

Well…. As I stare at the screen this morning, wondering where to start, the thought crosses my mind that what I do say could get me in trouble with readers….  And then what I do say might have them exulting me! So, I’ll flip a coin…. HA!   The currencies didn’t really do much on Thursday and Friday last week, the dollar bugs must have taken a pause for the cause… Gold & Silver rallied on Thursday, and then turned around and reversed their Thursday gains on Friday…. 

The Dollar Index was 94.54 last Thursday morning and this morning it sits at 94.18, so, as you can see the currencies found some breathing room, but not a spacious floor plan! 

The Economic data late last week was pretty telling if you ask me…. First of all the weekly Initial Jobless Claims rose the previous week, and Durable Goods Orders only rose .4% in August VS 11.2% gain July, and Capital Goods Orders (CAPEX) only grew 1.8%  in August, VS 2.5% in July… Now what do those three economic prints tell you? Let’s see if we agree…. It tells me that whatever strength the economy was seeing from the reopening of economies, was nearly completely reversed the next month, and to me these are signs of a deep divide that’s beginning to show in the expectations of the rebound in the economy… 

So, the currency traders going into the weekend, didn’t know what to do…. Buy dollars, Sell dollars, or just do nothing…  Yes, I’ll take what’s behind door number 3…. And so the currencies ended the week on somewhat of an up note, but the move was nascent at best….  But like I said above, Gold gained $5 on Thursday, but lost $7 on Friday, and Silver had the same fate, gaining 37-cents on Thursday, and giving back 24-cents on Friday….

There’s just sooooooooo much price manipulation going on in the metals folks, that once again, I’ll remind everyone that to kick these price manipulators where the sun doesn’t shine we would need to buy as much physical Gold or Silver as we possibly can and hope to catch them short….

In the overnight and early morning markets, the dollar bugs have backed off a little more, and Gold has regained the $7 it lost on Friday, while Silver is back to 23-cents, up 11-cents this morning.  There’s been no real news overnight to cause this backing off by the dollar bugs. I’m thinking that they went too far, too fast, and like star burning out, it burns the brightest right before it fades out…  

Last week I told you about a metals trader that was convicted on price manipulation of metals and Treasuries….  And then this weekend I read that another trader in Europe was been indicted for price manipulation… And to top it all off I also read this week that Two Los Angeles-based dealers have been charged with swindling senior citizens on precious-metals purchases in the run-up to this year’s record high in gold prices.

Well…. Florida is the land of the free!  I’m just saying…  And S. Dakota has always been!

Nothing can prepare you for a jolt to the financial system…. But having Gold & Silver in your possession, and not ETF’s, is the only way to weather the jolt….  Margin Debt in stocks just keep climbing higher and was up another 5% in July from June.  The last time we saw a major decrease in margin debt was in February 2009, which was one month before the Fed announced their first bond buying implementation in March and the stocks being bought on margin haven’t slowed down since….  Oh, there was that short period in March of this year, but soon the Fed would announce the alphabet soup of currency printing plans, and well, we all know where stocks have gone since then, right?

I just don’t get it…. The stock investing is against every economic fundamental that I learned with regards to stocks….  The number of businesses in the U.S. that continue to close their collective doors just keeps climbing, and so does the number of Zombie Corporations…  And the businesses that are still viable, don’t have income, per se, and so their balance sheets look a lot like a sea of red….  And don’t forget about them cutting their dividend payments too!  But…. Their stock prices continue to climb… (Ok, we’ve actually seen 3 consecutive weeks of downward movement in stocks, but that’s chump change VS what they’ve climbed to)

Have investors finally seen the writing on the wall? If so, then we’ll begin to see the margin debt levels come down, as those positions held on margin will get sold out, to cover their balances…. I know I’ve told this story before, but here it goes again….  In a galaxy far away, I ran a margin dept, for a regional brokerage firm….  And there were times when myself and all the guys on the margin desk would be dialing clients on the phone, and telling them their account would be sold out….  It got so strange that the guys on the desk would come up with different ways to tell the client the bad news…. The one I remember was the margin clerk telling the client who was a dentist, that his account had a big cavity, that needed filling….

OK, enough of that!  Well, that was one heck of a week with all the Fed Head speeches last week, eh? And the result? Not much movement, as they collectively didn’t upset any applecarts, which I’m sure is their goal, so at least they can go back to the Eccles Building and claim that they met their goals!  Not so much on employment or inflation here in the U.S. but that’s for another day, the Fed Heads are too busy slapping each other on the back… 

The U.S. Data Cupboard doesn’t have a lot of data prints for us this week, and is empty today, but the week does end with a Jobs Jamboree!  I’m sure that the bond, metals and currency markets will be tuned in to the ups and downs that will come with leaks, and commentary that goes on this week regarding thoughts on what the Jobs report will tell us…. 

If the Weekly Initial Jobless Claims are any indication, and they should be, the report will be weaker than the one printed earlier this month for July.  Right now the experts are forecasting an increase in employment for August of 810,000, which is down considerably from the 1.31 Million that were added in July…  I know these numbers are very large and don’t seem possible, but you have to remember where employment number fell too this spring, and then it kind of makes sense… 

To recap…. The dollar bugs have backed off on their assault of the currencies and metals from last week, and the two asset classes are fighting back. Gold & Silver were up on Thursday, down on Friday, and up again this morning, and the Dollar Index has fallen from 94.54 last Thursday to 94.18 today, so you can see that the dollar has given back some of the ground it gained last week.  Chuck sees a real problem with the size of the margin debt in stocks, folks… And he has a story for when stocks slide in margin accounts… 

For What It’s Worth….  Well, did you know that the Fed has backed off their buying of Corp Bonds and ETF’s? Well, they have and I have to believe that they sending Congress a message, of how ugly this whole enchilada could end up being, if Congress doesn’t come up with a new stimulus plan soon…. Well the info on the backing off is here : https://www.zerohedge.com/markets/powell-sending-even-louder-message-fed-refuses-resume-bond-etf-purchases-despite-slump

Or, here’s your snippet: “Two weeks ago, when the Fed published its latest monthly breakdown of purchases Secondary Market Corporate Credit Facility which shockingly showed that in the entire month of August, the Fed had not purchased a single corporate bond ETF and had barely purchased any corporate bonds in the open market, we asked if Powell was “sending the market as message.”

In the subsequent two weeks, which saw a sharp drop in risk assets and the Nasdaq sliding into a 10% correction, coupled with a modest rout across the corporate bond sector, many had expected the Fed to revert to its role as custodian of market stability and ramp up its purchases of corporate bonds, if for no other reason then to assure investors that Uncle Jerome was still watching over everyone.

So in what may come as a big surprise to all those praying for the Fed to bail them out, or to at least telegraph that he is keeping an eye on the current tech-led market mess, Powell did no such thing and in fact the Fed’s latest weekly H.4.1 report showed that the corporate credit facilities held $12.911bn of corporate bonds and ETFs as of Tuesday, up a tiny $44 million from $12.867BN the prior week.

And since that implies the Fed bought a paltry $9 million/day of corporate bonds and ETFs on average this past week, down from $19 million/day the prior week, and far, far below the $300 million in daily corporate bond/ETF purchases for much of the early summer, one wonders if Powell is urgently trying to let the market know that it is on its own?”

Chuck again…  I don’t believe the Fed will play this game of chicken with Congress too much longer folks… They may all be dolts in my opinion, they’re not going to watch stocks fall much further without doing something…  I’m just saying…

Market   prices 9/28/20: American Style: A$ .7068, kiwi .6655, C$ .7470, euro 1.1675, sterling 1.2869, Swiss $1.0796, European Style: rand 17.0144, krone 9.4665, SEK 9.0584, forint 311.82,  zloty 3.8977,   koruna 23.3313, RUB 78.11, yen 105.46, sing 1.3772, HKD 7.7499, INR 73.74, China 6.8228, peso 22.27, BRL 5.5597,  Dollar Index 94.18,  Oil $40.45,  10-year .66%, Silver $23.10, Platinum $867.00, Palladium $2,299.00, and Gold… $1,867.50

That’s it for today…  A rainy day apparently, the first rain we’ve had here in two weeks, so that’s OK, with me… Not that I can do anything about mother nature!  All my kids and grandkids were here yesterday to spend the day with me…  I cooked up some yummy chicken and a good time was had by all!  Now, I know I’ve seen three of my own kids do this, and their kids do it, but when I saw little Evie, stand up by herself, and begin to walk the other day, I was amazed, and shocked, and a tear came into my eye… Simply amazing…. She’s so darn cute!  Justin Heyward and John Lodge of the Blue Jays take us to the finish line today with their song: When You Wake Up….  “you will find, that your love has left your side”…  And with that, I hope you have a Marvelous Monday, and will Be Good To Yourself!

Chuck Butler

 

September 24, 2020

* Currencies & metals can’t stop the bleeding… 

* JPMorgan to pay a hefty fine for manipulating metals… 

Good Day… And a Tub Thumpin’ Thursday to you! Well, yesterday was a day to be forgotten as far as I’m concerned… The sun barely made an appearance, Gold & Silver get rocked again, and my beloved Cardinals lost to the Royals… UGH! They didn’t just lose, they got their butts beat! The road trip ends with a record of 7-6 with the rash of doubleheaders and so forth, in a regular year, that would be a good road trip, but considering there aren’t 162 games this year, every loss is like 3 losses… Now we come to the cheese that binds… 5 games VS the Brewers in 4 days…  This will be day 6 alone during the days, I know one thing, I don’t have to put in my noise cancelling headphones to take an afternoon nap!  Maroon 5 greets me this morning with their song: Harder To Breathe…  Which I find happens to me when I get to the top of the stairs! HA!

OK… Well, here it is…. The dollar bugs are really taking some major chunks out of the currencies and metals.  The dollar won back $37 of Gold’s value to close at $1,864.10, and the dollar also won back $1.52 of Silver’s value to close at $22.86…  Talk about bringing the thunder down on the currencies and metals! The euro fell further in the 1.16 handle, and so on….  Welcome To the Thunder Dome!  The dollar bugs have been heard to be shouting these days….  And I’ll give them credit, when they smelled blood they attacked, and the siege hasn’t stopped…. Gold, Silver and the currencies are beginning to think that they are Davey Crocket at the Alamo!  General Santa Anna wouldn’t let up and neither will the dollar bugs…

And in the overnight and early morning markets, the siege on the currencies and metals hasn’t stopped. The dollar has taken back another $7 from Gold, and another 76-cents from Silver… this is beginning to look like it’s never going to stop… but it will, when the sellers have taken enough profits…  I’m just saying… 

You, know this is where I usually go all crazy about how this isn’t what should be going on, but I’m not going there today…. There are bigger fish to fry, as my dad used to say…. Like the news that JPMorgan has agreed to pay $1 Billion, with a capital B, folks,  for their participation in market price manipulation of metals and Treasuries…  Now this is a very large fine, right? But what have I told you before about these fines?  That you can be sure that the entity being fined made 3 times that amount doing the unlawful trading, and they consider these fines to be “a cost of doing business”…  

What would it mean to the asset classes that get manipulated to have the head of JPMorgan go to jail? Well he is the captain of the ship right?  I’m just saying that this kind of stuff is going to continue to happen until someone goes to jail….  It’s all fun and games until somebody goes to jail!  You thought I was going to say, loses an eye, but that’s a sensitive subject with me!

And once again, I say neener, neener, neener to the folks at my former place of employment that didn’t believe that the metals were manipulated and made me stop talking about it, saying it was just another one of my conspiracy theories… 

And this is one kind of price manipulating, but the big fish to fry comes when someone does something about all the short positions that are on the book of COMEX, that have nothing to do with selling a metal and making delivery of it…  They are there strictly to manipulate the price of the metal lower… Now THAT would be something if, nah forget it Chuck, there’s no one with the intestinal fortitude to stand up to the price manipulators… UGH! 

And in all the Fed Head speeches yesterday, there wasn’t anything said that we didn’t already know…. For instance, Fed Vice Chairman, Richard Clarida, had this to say, “the central bank won’t consider raising interest rates from near zero until it actually achieves 2% inflation as well as full employment.”

Now we didn’t need Mr. Clarida to tell us this news…. We already knew that! Because Chuck told us a long time ago! So, what we have here is a new “Mr. Obvious” in Clarida…. I’m just saying…

Wouldn’t it have been better if Clarida had said, “ We are prepared to keep rates near zero until the cows come home”?  Or, how about this, “ we can’t see raising rates until we are all retired from the Fed and won’t be responsible for this awful monetary policy any longer”? 

Ok… let’s move on…  Well, how about the news yesterday that   Johnson & Johnson has begun the final stage of clinical trials for its vaccine…  For the Covid-19 virus that is…   This news came after a blip that came out on Monday from the FDA, that they are preparing more stringent testing for any virus vaccine…  So, what’s it gonna be FDA?   That’s ok you won’t see me standing in line to take this vaccine! I’m just saying…

Remember when I told you a month or so ago, that traders were rewarding the currencies from countries that seemed to be putting the pandemic in their rear view mirror? Well, it occurred to me yesterday, that this news about a vaccine reaching the final stage of clinical trials could very well be behind all this dollar buying…  But then I came to my senses and said, “Nah Chuck, traders aren’t that smart, this dollar buying still walks like the PPT, talks like the PPT, and quacks like the PPT…   

Its’ a herd mentality in trading folks… Take this dollar buying…. Traders were lining up to sell dollars last week, but then the PPT stepped in, and not wanting to fight city hall, traders tore up their sell order and threw them in the circular disposal (trash can)… And once a few traders saw what the PPT was doing, then they began to buy dollars, and then all traders were on that bandwagon…

Look I was one of those guys… I know that each morning they receive a memo from the boss telling them what they are to buy or sell that day….  Now, it wasn’t like that for me, because I wasn’t taking positions for the company… but in talking to these guys through the years, that was their charge….  So, just to “put it to the man” I will say that what we should be doing right now is buying whatever it is they are selling, because this won’t last long, and besides things are very cheap right now!

And early this morning, longtime reader, and good friend, Sharon, sent me this video of one of my all-time fave economists, Stephen Roach, and it was good, so I’ll give you the link and you can view it when you have the time.. It’s good, by the way…  https://www.cnbc.com/2020/09/23/us-faces-dollar-crash-high-double-dip-recession-odds-stephen-roach.html

Today’s Data Cupboard has the Initial Weekly Jobless Claims, that as I stated on Monday this week, people are looking at this all the wrong way… They see that the weekly number isn’t 1 Million, and they think that to be cause for celebration…  You have to look at the Continuing Claims folks, which have been inching toward 30 Million each week… And that is NOT cause for celebration! 

In addition, there will be not 5, not 6, but 7 Fed Head speeches today….  That marks 20 of them so far this week, and we still have tomorrow, which is scheduled to have only 2 speeches on the docket for Friday…  Today, we’ll also see New Home Sales, which doesn’t get me excited one iota!

To recap…  it was another day of dollar buying and Gold & Silver received the bulk of the damage although the currencies saw some losses too…  Chuck decided to forego any talk of how things are not what they should be, today….  JPMorgan is going to pay a $1 Billion fine for manipulating metals and Treasuries… But no one is going to jail…  And Chuck asks the question that wonders if the dollar buying is because of the vaccine news? 

For What It’s Worth….   Well, I really played arts and crafts with this article, getting what I wanted you to read in the snippet today… It’s a long article but worth the time and effort. It’s by Gail Tverberg, of whom I’m quoted many times in the past, and can be found here: https://ourfiniteworld.com/2020/09/23/reaching-the-end-of-early-stimulus-whats-ahead/

Or, here’s your snippet: “Many people thought that COVID-19 would be gone with a short shutdown. They also thought that the world’s economic problems could be cured with a six month “dose” of stimulus.

It is increasingly clear that neither of these assumptions is correct. Despite the claims of epidemiologists, our best efforts have never been able to reduce the number of newly reported COVID-19 cases for the world as a whole for any significant period of time. In fact, the latest week seems to be the highest week so far.

At the same time, the economy, despite all of the stimulus, is not doing very well. Airlines are doing very poorly. The parts of the economy that are dependent upon tourism are having huge problems. This reduces the “upside” of economic recovery, pretty much everywhere, until it can be corrected.

Another part of the world economy doing poorly is clothing sales. For example, many fewer people are attending concerts, weddings, funerals, out-of-town business meetings and conventions, leading to a need for fewer “dressy” clothes. Also, with air travel greatly reduced, people don’t need new clothing for visiting places with different climates, either. Most clothing is bought by people from rich countries but made by people in poor countries. This cutback in clothing purchases disproportionately affects people who are already very poor. The loss of jobs in these countries may lead to an inability to afford food, for those who are laid off.

Most people think that the issue we are dealing with is a temporary problem associated with a new coronavirus. I think that we are dealing with a much worse problem: The world’s population has outgrown the world’s resource limits. This is why our current problems look so difficult to solve from a financial point of view. This is part of the reason part of the world’s population feels that shutting down the economy for COVID-19 is a good choice. When the economy is already struggling with unprofitability and low wages, shutting down for COVID-19 appears to be a good choice: Keeping people inside stops the many protests related to low wages. The shutdowns appear to restore order to a troubled system.

Overshoot and collapse is a problem that many smaller economies have encountered over the years. If I am right that we are now encountering a similar situation, there is a big change ahead. The change will not be instantaneous, however. The big question that arises is, “Over what time scale does such a collapse take place?” If it takes place over a number of years, it may look more like “overshoot and decline” than “overshoot and collapse” to those who are living through the era.”

Chuck again.. Thanks to longtime reader, Bob, who sent me this article to read, and while reading it said, FWIW article over and over to me… So, here it is!

That’s it for today…  This week has seemed to take forever to get along…  I don’t know why, it just seems that way to me…. I’m hoping the sun comes out today, I need to get outside and enjoy some sun! I’m also hoping the kids and grandkids come over this weekend to spend some time with me… I know everyone has “life” things to do, but we’ll see, eh?  I had some very nice emails in the response box yesterday…  All I can do is say thank you, very much, your kind words are truly appreciated!   The Hollies take us to the finish line today with their song: The Air That I Breathe….   Kind of funny that to start the day we had a song: Hard to Breathe, and to end the day we have a son The Air That I Breathe….  Hey the iPod is on shuffle, I’ve heard about 20 songs while writing this morning, leading up to the song by the Hollies….   I hope you have a Tub Thumpin’ Thursday, and Please Be Good To Yourself!

Chuck Butler

 

September 23, 2020

* the dollar bugs continue to dance in the streets… 

* Gold has been brought down below $1,900 this morning… 

Good Day… And Wonderful Wednesday! Not so wonderful yesterday for all asset classes, but I don’t want to talk about that now…. First, my beloved Cardinals finally hit the ball, somewhat, and won in Kansas City last night… There are only 6 games left in the reg. season, with the chance of having to add 2 games in Detroit, if the teams all end up tied… I have a solution for avoiding the ties…. Win the remaining 6 games, and then head to Atlanta, to begin the playoffs…. Easier said than done, for sure! OK, then win 5 of 6! I really stirred up a hornet’s nest on Monday, but after reading all the responses, I found that most of the readers agreed with me!  So, I have that going for me, eh?  The Strawbs greet me this morning with their song: Autumn…  Hold on to me… I’ll hold on to you… All winter long I will always be with you….

Well, I didn’t want to get into this front and center this morning, but, I’ve got nothing else cued up to talk about first, so no beating around the bush for me this morning!  The dollar bugs have continued to dance in the street, and now they’re inviting their friends, and neighbors to join them! I don’t know who’s buying all these dollars to push the euro below 1.17, and Gold below $1,900, But they are getting whatever it is that they’re after taken care of…  SERENITY NOW!  I’ve said this over and over again, that this dance is gonna be a drag… no wait! What I’ve said over and over again, is that there is no rhyme or reason to buy dollars right now, but someone or some group is doing just that, and to me I find that to be so moronic…. But it is what it is, and there’s nothing I can do about it… So… I’ll move on…

In the overnight and early morning trading, Gold has suffered more losses to the dollar bugs, and Silver has followed along…  For the record, Gold closed yesterday at $1,900, down $12.30 on the day, and this morning, the dollar has won back $18 more dollars to put Gold at $1.882.80. Silver closed yesterday at $24.37, down 31-cents on the day, and this morning Silver is down $1, to trade at $23.37…  UGH!  

There are two currencies that have bucked the trend…. The Chinese renminbi has been inching higher in value VS the dollar on a near daily basis, and whenever the renminbi moves the Singapore dollar follows because, as I’ve explained before, Singapore competes with China for exports, so they can’t allow the currencies to get out of alignment… 

The things I have to put up with! SERENITY NOW!  OK, lets move slowly away from the markets… SLOWLY I said! 

OK… I do have new eye glasses ordered, so it couldn’t have been the weaker lenses in my current eye glasses, but I checked it twice, and then a third time to make sure I was actually seeing what I was seeing. And there it was in BIG BOLD letters, the title of an article on CNBC.com… “Here’s why top economists are not worried about the national debt, now worth over $26 trillion”

So, of course I read it, having to hold back my immediate reaction to these dolts….  Here’s an example of the stuff in the article: “When asked about the staggering number, Nobel laureate Esther Duflo told CNBC, “That is not something that the general public should be worried about for the time being at all.” She continued, explaining that American credit is one of the safest assets to hold, so in a sense, it is unlikely that the government will ever have to repay this debt.”

Chuck again… Wait, What?  “It is unlikely that the government will ever have to repay this debt”  Really? I do believe that you meant to say… “the government will NEVER be able to repay this debt”…. 

OK, there are some real economic points in the article, like when economic function slows, along with capacity, the government needs to step in to provide those missing parts…  But… I would argue that this deficit spending has been going on during good times, and bad times… So, don’t give me that argument that this is just a pandemic response!  What a bunch of dodo brains! 

And this economic point is something that used to get me in trouble with professors… I see the NEED for the government to step in when things are bad, BUT! I do not see reason we have to do that? If Corporations are in trouble, let them fail! It’s how economies work, when they’re not manipulated like ours has been, for over two decades…   

I would argue my point of view with those professors, and they would get so upset with me, and say, “Can’t you see that when the economy bottoms there is a need to give it a boost?” And I would say, “well yes, but why does it have to be with taxpayer money?  (Back in those days, deficit spending was minimal and there was never talk of helicopter money, until Big Ben Bernanke decided it was time to unleash that phrase)   These professor would just throw up their hands in the air, and walk away from me, mumbling… 

So, one night a few years later, when I was at Mark Twain Bank, and getting schooled on economics from the great Hy Minsky, I asked him about this, and he said, ” You’re right, Chuck”  But, when the Gov’t has surpluses why not allow them to use them to boost the economy?   I still don’t see the need for the Gov’t to be involved in boosting the economy, other than jawboning it up….  That’s my thought and I’m not going to change it so don’t try! 

And the other day, I mentioned the debt to GDP ratio in Japan at 253%… But what I failed to mention is that their debt is somewhat different than ours, in that a large portion of the debt is held by Japanese citizens, so self financed if you will….  Here, in the U.S. even with the Fed buying Treasuries by the boat load, we still rely on the kindness of strangers, like Blanche in a Street Car Named Desire…. 

Speaking of the kindness of strangers… That “kindness” is really getting stretched a bit with all supply of Treasuries needed to finance the ever expanding deficit spending… China has noticeably reduced their Treasury holdings… Russia has already cleaned their house of Treasury holdings, and now I read the other day that Iran is reducing their Treasury holdings…  You see, these countries don’t have to sell their Treasuries which would really upset the apple cart, instead, choosing to not show up at the  auction window for new Treasury issuances… Of if they show up at all, they show up with less to spend…. And all that means is that the Fed has to take on more treasuries to add to their currently bulging balance sheet…

So, why doesn’t the Fed just buy the whole auction, and no longer have to depend on strangers? Because that’s called monetizing the debt… And currencies usually get rocked to the core when a country goes that route….  But in my mind, I see  the Fed, or illegal central Bank, whatever you want to call them, going this route eventually. 

And I think it all goes hand in hand with the use of digital currencies… Yes, I’m still of the belief that this is the direction we’re headed…  I have Bill Bonner’s thought on this in the FWIW section today, so you won’t want to miss that!  Because…. like I said in a previous Pfennig… I talk to you most days and give you my thoughts, and sometimes it helps to get another adult to talk to you….  Sort of like with kids… you harp and harp at them about something, but if some other adult mentions it, your kids immediately react….  I’m just saying… 

The U.S. Data Cupboard today has the Markit versions of PMI (manufacturing indexes) for the current month, which no one really pays much attention to…. And then we have 5 more Fed Head speeches today, with Fed Head Chairman Jerome Powell, batting lead off speaking about the COVID-19 virus…. Other than that, it’s a nothing day for the Data Cupboard…

To recap… Chuck just does not get it…. All the signs, point to a weak dollar, and a soaring Gold Price, and what we getting is the complete opposite… Chuck wants to know who’s buying all these dollars, so they can have their, collective, heads examined!  Chuck goes all nine yards on an article on CNBC.com yesterday, so you won’t want to have missed that!

For What It’s Worth… OK… So, I gave you a teaser above on who’s going to visit us today for the FWIW article…  It’s longtime friend, and publishing guru, and author of many books, Bill Bonner… And he’s going to talk about digital currencies, and this can be found here: https://www.rogueeconomics.com/bill-bonner-diary/digital-money-is-coming-to-america/

Or, here’s your snippet: “Crypto/digital money might turn out to be the money of choice for governments more so than for their citizens.

It is no secret to us that current levels of debt growth and money-printing are leading to trouble. By 2030, the feds will probably owe about $40 trillion, not counting their unfunded obligations under Social Security, Medicare, etc.

That debt is only sustainable as long as the dollar floats. When it sinks, the whole ship goes down with it. The feds know this as well as we do. And they, like we, are already making plans.

No, they are not making plans to right the ship by balancing the budget, cutting the deficit, or reducing the Federal Reserve’s balance sheet. They know that is politically impossible.

More likely, they’re planning to abandon ship.

Who would benefit most from the collapse of the dollar? The world’s biggest debtor, of course – the U.S. government.

At 50% inflation (the current rate in Argentina), half of the feds’ debt disappears in a single year. In three years, it is almost all gone.

Then, they can introduce a new dollar. Our colleagues at Tradesmith report:

The Bank of International Settlements, or BIS for short, is known as the central bank for other central banks. In January 2020, the BIS published a new research paper – not its first one – on central bank digital currencies (CBDCs).

Eight months ago, the BIS found that 80% of all the central banks they surveyed were investigating CBDCs, and 40% had moved from the research stage to the concept and design stage.

Meanwhile the U.S. Federal Reserve and European Central Bank (ECB) have expressed interest in digital currency and research, and the People’s Bank of China (PBOC) is potentially years ahead of the competition in rolling out an e-yuan, with mass trials underway involving real-world commercial use.

So you see, Dear Reader, there is no reason for despair. The feds will get to start the scam all over again!”

Chuck again…  Yes, that’s right! I can always count on Bill to set the record straight…  And don’t forget that a month or so ago, I told you how the U.S. was investigating digital currencies… They should be well into configuring a way to introduce them by now… 

Market  Prices 9/23/20: American Style: A$ .7113, kiwi .6588, C$ .7496, euro 1.1694, sterling 1.2731, Swiss $1.0856, European Style: rand 17.0398, krone 9.3990,  SEK 8.9240,  forint 311.85,   zloty 3.8473,  koruna 23.0444, RUB 76.06, yen 105.14, sing 1.3678, HKD 7.7497, INR 73.55, China 6.7818, peso 22.05,  BRL 5.4333,  Dollar Index 94.10,   Oil $39.83,  10-year .67%, Silver $23.48, Platinum $866.00, Palladium $2,242.00, and Gold… $1,882.80

That’s it for today….  Yes, it’s not you… The Pfennigs have been going out later this week…  I have found that I have to rely on an alarm, which I never had to do before, and when the alarm goes off I instinctively turn if off, and…. Well, you guessed it… go back to sleep!  Oh, well… as they say… Better late, then never! HA!  LinkedIn sent me a note yesterday, that said they found a job for me, and then went into a diatribe about the benefits of the job were…. I responded to them that they needed to look at my profile, it says that I’m retired!  And that’s how I will remain!  Besides I would miss too many days of work with my schedule of appts. The Guess Who takes us to the finish line today with their song: No Time…  I was always a Big Fan of the Guess Who, and Burton Cummings… And with that, I hope you have a Wonderful Wednesday, and will Be Good To Yourself! 

Chuck Butler

 

 

September 22, 2020

* Currencies, metals, Oil and stocks all get sold… 

* Does Kaplan “get it”? 

Good Day… And a Tom Terrific Tuesday to you! Another Chamber of Commerce day here in the Midwest yesterday… I had a lot of things to do yesterday, so I didn’t spend the day reading articles once again… So, I have no idea what will happen, but this could be a short-n-sweet letter today, But I won’t promise you that! You know that I told you that Kathy is gone again, so that leaves me cooking dinner for Alex (and myself of course!). I love to cook… no problems there… I totally disdain the cleanup afterwards…  And I’m not one for leftovers, per se, there are some I like, but for the most part, no thank you on the leftovers. So, when I’m in charge, it’s down the garbage disposal with any food left. Which isn’t a ton of food, given that Alex eats like a horse! Bob Marley greets me this morning with his song: One Love/ People Get Ready…  I’ve got to be “in the mood” to listen to Reggae… But I absolutely love steel drum music!

Well, it was an all hands on deck day to buy dollars, as the dollar bugs danced in the street… The Currencies lost more ground in the U.S. buying of dollars that began in the overnight markets and carried through the day…  The Fed is doing their best to make the dollar unattractive, the President says he wants a weaker dollar to offset the Chinese manipulation of their currency, and still the dollar bugs get to dance in the street….  If I were training a new currency trader, I would tell him front and center that these are not the fundamentals that your father knew….  

For the record… Gold lost $36.50, to close at $1,912.40, and Silver lost an eye-whopping $2.03 to close at $24.68…  As Ed Steer says this morning… “Da Boyz really smoked the metals”…  That’s a real shame folks, but… as I always say, for those of you who have procrastinated for years now, this is an excellent buying opportunity…  What are you waiting for! Put down this letter, and call Tim Smith at 1-800-926-4922, and tell him you need to buy some Gold!   (or Silver, whatever floats your boat!) 

What are people buying these days, because it certainly isn’t stocks, bonds, currencies, metals, or Oil… I know that the wealthy have been moving out to the country, and paying more than asking price for places not in NY, Cal, Mich, and so on… But, while a house could be considered an investment choice, it doesn’t make up for the rot that’s on all investments’ vines….

St. Louis Fed President, James Bullard, says that we better get ready for some real inflation sooner than Wall Street is expecting….  I wonder what made him think that, and then actually say it out loud?  Oops, did I say that out loud?  HA!  But he said it, and MarketWatch reported it…. So, Does Bullard know something we don’t? Like is the Fed getting their helicopter gassed up and ready to fly?  Or do they get private messages from Congress?  Well, whatever it was, I think he’ll be proven to be wrong….  There is still no velocity of currency, folks, and until velocity begins to spiral upward, inflation is an afterthought…. 

And the problem with dropping currency from the Fed’s Helicopter, besides it being totally the wrong thing to do, is that when you have families in need like we do now, after weeks of not being able to work, and earn currency, is that they’ll have to use the currency they gathered on the streets, that was dropped from the helicopter,  to pay off debts they’ve built up for the last 6 months…. Like rent…. Mortgage payments… the grocer…. Student loans, etc.    And therefore the velocity of currency will remain stagnate….  

But when you get down to when the rubber meets the road, you’ll eventually get your currency velocity, and inflation, for we are Americans, and while it would be better for us personally to save and grow wealth, we’re going to spend, that currency, and that’s when things get going… But first we have to deal with the guilt of not paying rent and mortgage payments, etc. Once that’s taken care of, then it’ll be party on Wayne, party on Garth! 

I used to be treated, when at EverBank, to an economics professor at St. louis U., who would come in and allows us to ask questions economics related of course….  And one time I questioned the astute professor about money supply, and that I had learned from my economics professors that sharp increases of money supply will increase inflation… And what that right?  Well, you must remember that this long before 2008, and certainly what’s going on now…. She reminded me that velocity of money was the key, not just money supply….  And so now you know where I learned that lesson!

OK… remember a few years ago, when Gold rose steadily since 2002 to reach $1,917, and the Gold miners got a lot of the blame for the fall of the price of Gold in 2018…  You see, since Gold had gone a long term bull market run, the Gold miners splurged and got out of whack with fundamentals…. Well, the folks at GATA sent me this note yesterday, that I found to be interesting: “The world’s top gold miners sought to reassure investors on Monday that they’re not going on a spending spree despite surging gold prices boosting their shares and free cash flow.

Miners are opting to give more cash back to shareholders rather than plotting takeovers that the market may disapprove of with the COVID-19 pandemic far from over.”

Chuck again… I came across these numbers for Gold that I found very interesting….

Here’s Gold’s performance since starting to rise in 2000….

The last 30 days    -$24.85   1.28%

Last 6 months      +$345.70  27%

In the last year     +389.06   25.53%

Last 5 years           +787.76    70.02%

Last 20 years        +1,638.81   598.22%

I bought my first Silver in the early 80’s…. I bought my first Gold in 2005, after reading the book “Hot Commodities” by James Rogers… And I was the first to use the non-allocated buying facility at EverBank!  

In 2010, sitting around a table at our local hang out, the boys were talking about how they could become rich… And my good friend Duane said, “well, if we had all listened to Chuck 6 years ago, and bought Gold, we’d all be rich!” 

OK, enough of that….

The U.S. Data Cupboard today, just has the Existing Home Sales data for August, and 3 more Fed Head speeches, to follow up on yesterday’s 5 Fed Head speeches… I think I mentioned yesterday that there will be a lot of Fed Head speeches this week…  There’s really no other data today, folks, so the asset classes are on their own today. 

In one of the Fed Head Speeches yesterday, Dallas President Robert Kaplan said something that made me think “he sees what’s going on, but can’t stop it for he’s just one vote”….  Kaplan said, that “he’s worried that new forward guidance will spark risky trading.”   Now being the smart Alec that I am, I would normally say, “You think?” , or “Really?”  But since I had this thought that maybe he does “get it”  I won’t be a smart alec today… 

To recap… The Boys in the band took Gold & Silver out at the knees yesterday… Gold lost $36, and Silver lost $2, in the most blazingly obvious market manipulation, ever!   We have the Fed talking about allowing inflation to rise higher than 2%, and that interest rates will remain near zero for many years to come, and Gold should be climbing the stairway to heaven, but instead the boys in the band show up at the COMEX with arms full of short Gold & Silver trades, and the dirty deed was done….  It’s shameful, it really is that they are allowed to do this…. 

For What It’s Worth…. Well, what do I have here today? I have an article from the Russ and Pam Martens of Wallstreetonparade.com, who have taken another run at JPMorgan…. This time on Money Laundering, and it can be found here: https://wallstreetonparade.com/2020/09/3-count-felon-jpmorgan-chase-caught-laundering-more-dirty-money/

Or, here’s your snippet: “The International Consortium of Investigative Journalists (ICIJ) has once again managed to do what federal bank regulators refuse to do in the United States – come clean with the American people about our dirty Wall Street banks.

ICIJ dropped a bombshell investigative report yesterday about money laundering for criminals at some of the biggest banks on Wall Street, but you won’t find a peep about it on the front page of today’s Wall Street Journal or New York Times’ print editions. In fact, the New York Times, as of 6:44 a.m. this morning, hasn’t reported the story at all. The Wall Street Journal carries an innocuous headline, “HSBC Stock Hits 25-Year Low,” putting the focus on the British bank, HSBC, when its focus should be on the largest bank in the U.S., JPMorgan Chase, a serial felon.

JPMorgan Chase has already pleaded guilty to three criminal felony counts brought by the U.S. Department of Justice since 2014. Two of those counts related to money laundering and failure to file suspicious activity reports on the business bank account it held for Bernie Madoff for decades. JPMorgan Chase actually told U.K. regulators that it suspected Madoff was running a Ponzi scheme but it failed to share those concerns with U.S. regulators, even though it was required under law to do so.”

Chuck again…. When will all this madness stop? Oh, I know the answer to that question, choose me teacher, choose me! OK… I believe that until one of these CEO’s goes to Jail, these unlawful things will continue….  

Market  prices 9/22/20: American Style: A$ .7221, kiwi .6667, C$ .7517, euro 1.1755, sterling 1.2810, Swiss $1.0929, European Style: rand 16.6440, krone 9.3032,  SEK 8.8523,  forint 307.43,  zloty 3.8175,  koruna 22.9650, RUB 76.04, yen 104.57, sing 1.3621, HKD 7.7499, INR 73.42, China 6.7826, peso 21.38,  BRL 5.4069,  Dollar Index 93.65,  Oil $39.35,  10-year .67%, Silver $24.29, Platinum $882.00, Palladium $2,293.00, and Gold… $1,911.20

That’s it for today….  The Cardinals lost to the Royals last night. UGH! The playoff push is tightly contested, among 4 teams, and the Cardinals can’t afford to lose a game, much less to the Royals! I told you all in August when the two teams played my dislike for the Royals…. So I won’t repeat myself, here that is…. This is day 4 of being alone during the day….  I did get a quick visit from darling daughter, Dawn and her kids, little Delaney Grace, and Everett…  I did get a little sunburn on my face on Sunday, so I was careful yesterday…. But the days are so beautiful I have to be outside to enjoy them! Well, the plan the wound center doctor laid out for me, and my legs, has taken a bad turn… I can’t keep them healthy for any long period of time…. UGH!   I received my new Cormoran Strike book last week, and it’s a long one! 966 pages long!  I only read about 35 pages a day, sometimes more, so it’ll take me more than a month to read the book!  And with that…. The Rolling Stones take us to the finish line today with their song: Can’t You Hear Me Knocking….  One of my fave Stones songs…  So… I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler