Category: Uncategorized

August 14, 2018 

* Gold gets whacked again! 

* Is Turkey the 90’s version of the That baht?

 

Good day, and a Tom Terrific Tuesday to you! Well, I was just checking the scores from last night’s baseball games, and was pleasantly surprised to see that my beloved Cardinals had rallied to win on a walk off homer in the bottom of the 9th last night…  WOW! I had long gone to bed and missed it all, but will see it on the replay this morning. When you’re on the East Coast, like I am for a while here, those games start so late for me… And next week, I see the Cardinals will be on the West Coast… Forgetaboutit! I’ll check the score the next day! Billy Stewart greets me this morning with a perfect song for a summer day… Summertime… 

Yesterday afternoon, I checked on the currencies and noticed that the euro had rallied a little bit and was trading over 1.14… But then Italy went to Twitter and all hell broke loose! Claudio Borghi who is the head of the budget committee in Italy’s lower house, stressed that not only is Italy’s spread with German bonds widening, but also the ones of other nations like Spain are doing so. He added that “either the ECB will provide a guarantee or the Euro will be dismantled” as “there is no third option.”

Italy is demanding that the European Central Bank (ECB) maintain the thin spreads between German bonds and Italian bonds…  Well, that’s not going to happen folks… The ECB has no interest in maintaining each country’s yield curve! And think about this for a moment, the ECB has already announced a reduction of bond buying, and how they intend to end the bond buying altogether by the end of the year… That means the support for Italian bonds is going away, and it will be natural for the yields to rise in order to attract investors.  

And it does no one any good whatsoever to make statements about “dismantling the euro” when you know in your heart of hearts that’s not going to happen, so why make the noise? Italy just needs to cool their jets… They don’t need to apologize, although that would be nice, they just need to shut the hell up and go back to the beach… 

I was putting the finishing touches on this week’s DTL piece yesterday, and went into a long discussion about the Big Dog euro, and how it got that name from me, etc.  Something new to those readers, but something borrowed and blue for you longtime dear readers, eh?  The Big Dog has been neutered by all this dollar buying… But it will change, it’s just a matter of time before all this debt in the U.S. and weak economy come crashing down on the dollar… Until then though, we have to put up with the dollar kicking sand in the Big Dog’s face… 

I know I wrote about this yesterday, but I wonder just how many of you read it and said “whoa this is getting scary again” I’m talking about the falling mortgage apps that I mentioned yesterday…  here’s what I actually said… ” just last week it was announced that Mortgage apps sank 3% in the Aug 3rd week, down now for four weeks running, and the YoY trend has collapsed 17% from year-ago levels.”    I will bet a shiny quarter that you didn’t hear that new on the  TV or radio… And you would have to do a deep dive search on the internet for the news…  And that’s all I have to say about that!

Besides the news from Italy, the other BIG news for the currencies concerns the Emerging Markets currencies, which are seeing the contagion selling that’s rooted in Turkey… I’ve long explained how the Emerging Markets currencies all get lumped together when one of them goes bad… And the selling has reached the Russian ruble, the S. African rand and so on… I read an article yesterday calling the Turkish Lira “the Thai baht of the 90’s”…

And since I was writing the Pfennig back in the 90’s I had a first row view of the Asian currency crisis that had the Thai baht at ground zero… And so it does seem that Turkey is this era’s Thai baht, and sits at ground zero of this Emerging Markets currency selloff. 

The Trade War is really having a negative effect on the Emerging Markets currencies.  And the tent revival we were seeing in Global Growth last year, has come crashing down on us… Hopefully you were able to get out from under that tent before it came crashing down! 

Of course Russia rubles are being battered on a couple different fronts… First, we have the Emerging Markets meltdown, and second we have the latest sanctions on their economy by the U.S.  I have been very impressed with Russia’s ability to take a punch and not punch back… At this time, the U.S. has placed sanctions on everything Russian, and still nothing in retaliatory words or actions by the Russians… Something’s not right here, folks… There has to be something BIG planned by the Russians because they have never been a “yes sir, may I have another” kind of country… 

There’s a good article on the RT website this morning that talks about what Russia could do to retaliate and can be found here: https://www.rt.com/business/435760-russia-response-us-sanctions/

What the hell happened to Gold’s price yesterday? The shiny metal was whacked by $18!!!! What did Gold do to deserve that treatment? Well, the renminbi was weakened again, and so like I told you yesterday, when I said that I didn’t think the price of Gold had bottomed out yet, as long as there is a Trade War and China is offsetting tariffs with a weaker renminbi and Gold price. 

There’s a report this morning that says that Gold imports in India are surging… And why not? The price of Gold has sunk to new cycle lows, and if you are in the market for more Gold, it’s your lucky day!  I hope that India sends a Thank You Card to China… 

The U.S. Data Cupboard is still on its mini-vacation, but that will end tomorrow, when a truck load of data will print, so we need to get ready for that, because I doubt seriously that any of it will be good for the U.S. dollar, that is as long as fundamentals are used in pricing currencies… 

To recap…Italy was completely out of line yesterday with comments about dismantling the euro, if the ECB doesn’t maintain the spreads between German and Italian bonds… Chuck doesn’t side with the Italians on this, and tells them to cool their jets!  Gold got whacked by $18 yesterday, and Chuck wonders if India has sent a Thank You Card to the Chinese for that cheaper price in Gold?  And the Emerging Markets currencies are being brought down by Turkey’s lira… Is this a 90’s style, Asian Currency Crisis, brewing for the Emerging Markets? Maybe… 

For What It’s Worth…  Ok, before you go on, you must pledge to put away the sharp objects… Finished with that? Ok… this is the economic collapse blog, so you have to take it with a grain of salt, but the problem here is that they are talking about all the things I’ve been talking about, and I sure hope you don’t take what I’m saying with a grain of salt! HA!   Anyway, this is their 10 numbers that are very scary for the U.S. and can be found here:http://theeconomiccollapseblog.com/archives/10-numbers-that-prove-that-americas-current-financial-condition-is-a-horror-show

Or, here’s your snippet: ” America’s long-term “balance sheet numbers” just continue to get progressively worse. Unfortunately, since the stock market has been soaring and the GDP numbers look okay, most Americans assume that the U.S. economy is doing just fine. But the stock market was soaring and the GDP numbers looked okay just prior to the great financial crisis of 2008 as well, and we saw how that turned out. The truth is that GDP is not the best measure for the health of the economy. Judging the U.S. economy by GDP is basically like measuring the financial health of an individual by how much money he or she spends, and I will attempt to illustrate that in this article.”

Chuck Again… yes, I totally agree, but until the rest of the market and its participants agree, we as  a country will continue to go skipping along this road to ruin, oblivious to the dangers ahead… 

Currencies today 8/14/18… American Style: A$ .7460, kiwi .6595, C$ .7635, euro 1.1405, sterling 1.2785, Swiss $ 1.0086, European Style: rand 14.06, krone 8.3560, SEK 9.0927, forint 283.44, zloty 3.7705, koruna 22.5393, RUB 68.13, yen 111.00, sing 1.3737, HKD 7.8497, INR 69.79, China 6.8814, peso 18.93, BRL 3.8775, Dollar Index 96.34, Oil $67.85, 10-year 2.90%, Silver $15.03, Platinum $803.60, Palladium $893.75, and Gold… $1,194.71

That’s it for today… What’s gotten into my beloved Cardinals? They are actually playing good baseball again! Good defense, base running, fundamentals, pitching and hitting… Makes you wonder what took the front office of the Cardinals so long to make the managerial change? Maybe they learned a lesson about hiring your best buddy, that it sucks if one day you have to fire him… Maybe…  The team had more excuses for their sloppy play than Carter has liver pills, but that has stopped, and we’re back to real Cardinals baseball now… YAHOO! Oh, and Carters doesn’t have liver pills any longer! Remember when you used phrases like that? Like “all the tea in China”, and others? I’ve tried to keep some of them going in the Pfennig though the years, like “heavens to Murgatroyd” and others… Good friend Craig sent me a note with a list of all those old phrases that nobody uses any longer… Pretty cool… And at this point I bet you would think it was real swell, if I finished! HA!  The Spencer Davis Group takes us to the finish line today with their song; Gimme Some Lovin…  Now, please go out an make this a Tom Terrific Tuesday, and remember to Be Good To Yourself!

Chuck Butler

 

 

August 13, 2018  

* The dollar bugs continue to dance in the streets!

* But the U.S. economic data is weakening… 

Good Day… And a Marvelous Monday to you! What a very nice vacation I just finished up having! Simply marvelous! Lots of fun, with a heaping helping of rest and relaxation! Good for the body and soul, especially for a chemo patient! I remain in S. Florida, for an extended stay, as I need to be here while some work is being done on our new place. I feared this would happen, so I did pack my laptop upon leaving 2 weeks ago… Since I left, we celebrated my darling granddaughter’s birthday… Little d, or Delaney Grace turned 11 this year… She was born the same summer I was diagnosed with cancer, so I’ll always know how old she is! Funny, I actually kind of don’t remember much from before Little d was around…  The Beach Boys greet me this morning with their song: Surfer Girl… 

Alrighty then… I guess the old thought/ saying they used to have on the trade desk, that when Chuck was away, the currencies rallied, just doesn’t hold water any longer, now that I’m no longer on a trade desk…  The currencies continue to be ram rodded by the dollar bugs, who are still of the belief that these interest rate hikes are going to go on forever…  They are so euphoric over the prospect of endless rate hikes, that they’re missing the weak data that’s already showing up across the board… 

Yes, it’s tru, it’s tru, I did see a putty tat! And on top of that I have seen most of the data that’s printing for July coming in and not meeting the expectations and some being very weak…  And… In a case of “I told you so”… I read a report last week that showed that only 8% of the people that received a tax cut are going to use their money to make a major purchase…

And on the flip side, Corporations are doing just like I said they would do with the tax savings, they’re buying back their own stock…. So, there’s no “happy days are here again, the skies above are clear again” for the economy from the tax cuts like Americans were sold, I mean told…  

On top of that… guess what else is beginning to show signs of fatigue from the rate hikes already in place?   Housing…  I don’t make this stuff up folks…  just last week it was announced that Mortgage apps sank 3% in the Aug 3rd week, down now for four weeks running, and the YoY trend has collapsed 17% from year-ago levels. Oh, the humanity!   And wait till you get a load of what I have to tell you about the recent Jobs Jamboree!  

On August 3rd, 2018, the Labor Department’s Bureau of Labor Statistics (BLS) reported that July payrolls rose 157,000. However, in their back door CES Birth/Death report, where they reveal how many of the 157,000 jobs were an estimated number of new jobs they hope were created by new businesses they think might have started up in July, net of jobs lost from businesses that closed their doors in July, they reported that 146,000 of the 157,000 were in fact a guess. That means the U.S. Economy generated 11,000 “counted” new jobs in July…   Now, I’ve been through all this birth/death model stuff before, but if I were ever to have a BLS official on the Butler Patio, I would ask them this… “Why do you make these assumptions that there were more business births, than deaths, when a couple of years ago, it was proven that all the while the BLS was adding jobs each month from thin air, that there were more business deaths than births for the last 10 years! So, why may I ask do you do this?

So, I’ve gone through all this so early today, because I’ve had time to think about these goings on… The dollar bugs dancing in the street, while Rome is burning in the background…  It’s there for everyone to see, but right now, the dollar bugs aren’t paying attention to that, and so, we have a stronger dollar… 

Mind you, I didn’t say, “Strong dollar”, because it’s not really strong per se, given the fact that even with the euro falling to a 1.14 handle, the single unit is still stronger than the dollar…  keep that in mind, as you scroll through the currency roundup today… 

Of course the leaders of the Eurozone, Australia, New Zealand, Switzerland, Japan, and others could make this easier for their respective currencies to stand up to the dollar, if they would do something about their interest rate structure!  I’m really singling out the Eurozone, Australia and New Zealand here folks…   It seems like we’ve been waiting forever for the European Central Bank (ECB) to get off their duffs and begin to reverse their stimulus policies…  It may never happen… It’s like a watching a pot of water on the stove, and waiting for it to boil… 

And here’s where I put my tail between my legs and wimper on home, hoping no one stops to give me whack! Last year about this time, I wrote about all the goings on in New Zealand, and how the Reserve Bank of New Zealand (RBNZ) were making overtures about the beginning of a rate hike cycle that could begin in the first quarter of 2018… I jumped all over those overtures to say that this was an opportunity for investors to get in before the rate hike occurred…  Well, we got in… and we’re still waiting for that rate hike…  And, unfortunately for us, the RBNZ stated last week that they don’t see rates changing this year or next year… Wait, What?  How did they go from what was believed last year at this time, to what they believe now?

Central Banks, and Central Bankers… If I ever had the opportunity to meet up with them in an alley! No wait, Chuck, you’re a broken down, partially handicapped old man, that’s had his strength zapped by 11 years of 5 different cancer medicines, you’re in no condition to “meet up with someone in an alley!”  Oh, thanks… Boy, that’s just what I needed a stark reminder of how the mighty have fallen…  OK… let’s say, that I would yell at them! HA!

Has Gold bottomed out? The recent trading of the shiny metal seems to indicate that could be the case, but I’m reminded of what I wrote about before I went on vacation, and that is that China had taken control of the COMEX and was pushing down the price of Gold along with their renminbi to offset the tariffs, which would lead me to believe that as long as the Trade War is going on, Gold will be subjected to further price manipulation by the Chinese, who get the wink and nod from the U.S. Gov’t to do so… 

And to further my thought… Gold is down $8.50 in the early morning trading today, so the daily beatings may have taken a break last week, but they’re bound to pop up again… 

I had to laugh when I read an article this past weekend, that the GATA folks sent me, that said that China says it’s not doing what it’s doing to the renminbi…  HAHAHAHAHAHAHAHAHA! What? do the Chinese think we’re all a bunch of dolts, and twits that don’t understand that their currency is a managed currency and if it gets weaker they made it go weaker?  I laughed so strongly that I spilled my coffee… 

They’re not doing to the renminbi what they are doing…  You have to laugh, right? 

The price of Oil has backed off it’s highs from last month, and has settled into a $67 -$68 range… Not the higher levels I thought we would see while the price of Oil was running higher last month, but still pretty good, compared to its slumped price of a couple of years ago. Have you heard about this new kind of Oil? Brandt Oil? It supposedly is chock full-o-energy that allows a car to get ultra-improved gas mileage…  Can’t wait for that take place, because I’ll be down the road at the Lincoln dealership waiting for my new Navigator to pull up for me to drive away! HA! 

The U.S. Data Cupboard is on a brief vacation the first two days this week, but on Wednesday, the Cupboard explodes with economic data! We’ll see the likes of Retail Sales, Industrial Production, Capacity Utilization, Unit Labor costs, Productivity, and more! All in one day! WOW!  So, with no real data today and tomorrow, the dollar will continue to be well bid… 

To recap… The dollar bugs continue to dance in the streets… But Chuck is pointing out many pieces of data that are beginning to show signs of fatigue from the already in place rate hikes… The price of Gold has appeared to have bottomed out, but Chuck thinks that’s a head fake… And what’s with this new kind of Oil that Chuck’s talking about?

For What It’s Worth… Well, I’ve talked and talked and talked about how debt is slavery through the years, and I’ve been tracking this Consumer Credit (read debt) data each quarter with a keen eye on the increases… Well, this article spells all this out with a nifty graph so you can see the increase and not just read numbers and get perfectly numbed by them… It can be found here: https://wolfstreet.com/2018/08/08/the-state-of-the-american-debt-slaves-q2-2018/

Or, here’s your snippit: “Total consumer credit – or less soothingly, consumer debt – rose 4.8% in the second quarter from a year earlier, or by $176 billion, to $3.87 trillion (not seasonally adjusted), the highest ever, according to the Federal Reserve. This includes credit-card debt, auto loans, and student loans, but not mortgage-related debt. Given how passionate Americans normally are in spending money they don’t have – that 4.8% increase is moderate: In 2011, increases exceeded 11%.”

Chuck Again… I love it when you can pull data right from the Federal Reserve… They counted the beans but apparently don’t pay attention to them, eh?

Currencies today 8/13/18… American Style: A$ .7275, kiwi .6575, C$ .7605, euro 1.1388, sterling 1.2750, Swiss $1.0055, European Style: rand 14.4310, krone 8.3735, SEK 9.1520, forint 284.80, zloty 3.7840, koruna 22.5456, RUB 67.57, yen 110.35, sing 1.3765, HKD 7.8496, INR 69.82, China 6.8465, peso 19.23, BRL 3.8683, Dollar Index 96.42, Oil $67.61, 10-year 2.86%, Silver $15.18, Platinum $813.75, Palladium $896.68, and Gold… $1,202.05

That’s it for today… I’d like to say it was good to be back in the saddle again, but I’ll leave that for you to decide! I wasn’t keeping track of the actual days and I completely allowed one of my long time friends’s birthday slip by… Happy belated Birthday, Mike…  We’ve known each other and have remained good friends since the 2nd Grade… Lordy that was a long time ago! Speaking of a long time ago… This month in 1969, the Beatles were breaking up, and I was in 3 a-days football practices, man was I in some kind of shape back then! I often wonder just how I lost all of that, as I dip a chocolate chip cookie in my coffee… HA!  R.E.M. takes us to the finish line today with their song: Drive…    I saw this band live back in 1995, they were really hot back then…  I hope you have a Marvelous Monday, and remember to Be Good To Yourself! 

Chuck Butler

July 25, 2018 

* Currencies can’t find a bid on Tuesday

* Subsidies to offset tariffs?

Good Day… And a Wonderful Wednesday to you! I’m sure hoping that my time away from home for the next two weeks, is better for my sleep time! Because I’m tired of what’s been going on here these nights! Yes, the day will finally arrive very early tomorrow morning when I board a plane going south! And this year, the whole family is going to be there with me! Usually it’s Andrew, Rachel and Braden, along with Alex that go with us this time of year. Dawn, Jerry, Delaney and Everett, usually go in the spring for Spring Training games, and warm weather. But this year, Dawn & family are going too! It’ll be a crowded little condo that we own, but we’re all family, so who cares, right? Jr. Walker and the All-Stars greet me this morning with their song: What Does It Take… (love that song!)

For my last Pfennig before vacation, I’m going to be nice and sweet, no harping on or calling people dolts, including myself! No complaining, no whining, no Chuck being Chuck… But more like Chuck when he was courting Kathy, all sweet, and lovey dovey! HAHAHAHAHAHA! So, let’s get to the meat of this letter today!

The currencies couldn’t find any buyers yesterday, and the euro dropped below 1.17 once again. And Gold didn’t do much better, after starting the day up $2, it ended the day down 10-cents… Yes, that’s what was left of the early $2 gain, just one thin dime… 

I am going to point out something that’s worrisome to me regarding the currency was last around this level back in January of 2017, and that was when there was a flight of capital flow out of China… A lot of observers, including me, thought that China would devalue the renminbi at that point, but they didn’t…  And a couple of weeks ago, it appeared that they were finished with this round of weakening the renminbi, but that was just a pause for the cause, apparently…  Talk about currency manipulation! But they have a managed currency, one that doesn’t float, so they can do with it what they want, as long as they realize that a weak currency invites inflation into the economy… 

I was sitting in front of my TV yesterday, for a short period of time, and while doing that, a blurb came across the screem that said that president Trump had announced a subsidy bill for billions of dollars to farmers that will be hurt by the trade war… He then tweeted that “tariffs are great!” Just don’t tell that to any company that gets parts from overseas, like Harley Davidson, Whirlpool, and others… tariffs aren’t so great for them!

So, that’s how it’s done I guess… get in a trade war, and then have tax payers pick up the bill for the subsidies to those hurt by the Trade War! OK, Chuck settle down, you said lovey, dovey today, remember? Yes, I do, but I want you all to think about that.. Your tax dollars being spent that way… Wouldn’t you rather have them spent on new bridges and roads, Fire Houses, etc.? But that’s what happens when you start a Trade War… unintended consequences…

Today, a delegation from the European Union (EU) comes to Washington D.C. to talk to President Trump about ending this Trade War with them. Jean Claude Juncker the EU Commission’s President, said that if no resolution to these tariffs can be found that the EU is prepared to retaliate the U.S. tariffs… So, I guess we want to hear later today that the U.S. and EU negotiated an agreement… Otherwise, that Beemer you were hoping to buy come fall, is going to be more expensive than you planned! 

A dear reader, (thanks Dave!) sent me a link to an article that was about China taking control of the direction of Gold away from the COMEX… OK, I’ve thought long and diligently on this, and I tend to agree with the writer’s theory that the Chinese are not only pushing their currency, the renminbi, weaker to offset tariffs, but also the price of Gold, to keep commodities from getting to high priced while this Trade War is going on. You should see the graph that Gold Guru, Omar Ayales sent me that showed the movement of Gold’s price and that of the renminbi… Talk about moving in tandem! So, Gold get’s pushed down in yet another of the unintended consequences of the Trade War…

Where will it stop? Well, according to the article, it appears that $1,174 has a target on it… That’s another $50 bucks or so, from where we are this morning… I don’t know if I can stand to watch it get taken down like that.. But if that’s what it’s going to be, then so be it… I will batten down the hatches with my Gold & Silver, and expect you do the same, for we all know these two metals are not going to zero value, and that these drops just bring us excellent buying opportunities…

Alrighty then, that brings us to the section that talks about U.S. data…  In the U.S. Data Cupboard yesterday, we saw the Markit version of a PMI index tick higher in July from 55.4 last month to 55.5 this month, so not a great or strong move forward, but no real signs of the Trade War interfering here yet. Today’s Data Cupboard will show us the June New Home Sales… On our Marvelous Monday June’s Existing Home Sales came in weaker than the previous month’s total… Are those cracks in the foundation? I guess we’ll have to keep an eye on that one, eh? 

Tomorrow’s Data Cupboard will have the June print of Durable and Capital Goods Orders, which should go in line with the rest of the data that has printed for June and be stronger than the May print, which for Durables was negative! 

To recap…  The currencies couldn’t find a bid yesterday, and lost some ground, while Gold was only able to eke out a 10-cent gain. Gold is up more than $6 in the early morning trading today though…  Trump announces subsidies for farmers hurt by the Trade War, and Chuck has a problem with the whole scenario… But he just points it out today, as he is all lovey dovey today!

For What It’s Worth…  Ok, since the news this morning on Gold and it’s price going forward for now, wasn’t so good, this article from Zerohedge.com seems to be bang on time! And it can be found here: https://www.zerohedge.com/news/2018-07-21/case-gold-not-about-price

Or, here’s your snippet: “Rather than long-term, ever-higher, onward and upward, we see strictly defined periods of extreme volatility. Indeed, it appears almost cyclical.

And our previous total return of 4,400 percent for the forty-year period August 1971 to August 2011, is reduced to 900 percent. Even so, that is the equivalent of a 6% average annual return, net of inflation. Which is huge.
(In case you are interested, the average annual return for the S&P 500 – with dividends reinvested – for the same exact time period, is 5.13 percent.

That relatively small differential on an annual basis is magnified considerably when you compare cumulative total returns: Gold at 900% vs. S&P 500 at 639%)

So, does the nine hundred percent total return/6% annual return represent a profit? Yes, most definitely. Net of the effects of inflation, the price of gold increased ten-fold; all of which represents added value. Here’s why…

In 1971, the cost for one loaf of bread was $.24. The average cost for one gallon of gasoline was $.36. With gold at $42.00 per ounce, you could purchase one hundred seventy-five loaves of bread or one hundred seventeen gallons of gasoline (or some combination of the two).

Forty years later, in 2011, the average cost for one loaf of bread was $2.42; and one gallon of gasoline was priced at $3.52. Hence, again, using only one ounce of gold (this time priced at $1900.00 per ounce) you could purchase seven hundred eighty-five loaves of bread or five hundred thirty-nine gallons of gasoline.”

Chuck Again… The title of the article is: The Case For Gold Is Not About The Price…  of which I wholeheartedly agree! It’s a store of wealth and protection from raging inflation… 

Currencies today 7/25/18… American Style: A$ .7415, kiwi .6812, C$ .7620, euro 1.1693, sterling 1.2155, Swiss $1.0079, European Style: rand 13.2470, krone 8.1660, SEK 8.7980, forint 278.86, zloty 3.6795, koruna 21.9458, RUB 62.98, yen 111.10, sing 1.3624, HKD 7.8451, INR 68.69, China 6.7995, peso 18.82, BRL 3.7638, Dollar Index 94.51, Oil $68.40, 10-year 2.94%, Silver $15.59, Platinum $841.61, Palladium $931.20, and Gold… $1,231.13

That’s it for today, this week, and for the next two weeks! This is the vacation where I don’t even take my laptop with me! It’s my opportunity to “get away” from the markets… Another gem of a game pitched by a different rookie pitcher for my beloved Cardinals last night, this time the Cardinals were able to win the game! Day game today! YAHOO! Love day baseball, the way it should be played all the time! Well, it’s that time to say goodbye for two weeks… The late great Alvin Lee takes us to the finish line today with a live version of his song: Going Home… Alvin Lee was a great guitar player, and died too early in life, when he checked into a French hospital for a simple procedure, and his life ended… I still say his performance at Woodstock was one of the best there!  And with that, I’m outta here… I hope you have a Wonderful Wednesday, and please remember to Be Good To Yourself!

Chuck Butler

 

 

 

 

July 24, 2018

* Currencies and metals give back most of their Friday gains

* A check on Russian fundamentals on the docket today… 

Good day… And a Tom Terrific Tuesday to you! At this point, we’re going to have to hope for a turn-around Tuesday to take the starch of the dollar’s collar. I sat outside with good friend Duane last night to watch the Cardinals blow yet another game late… Our rookie pitcher, making his major league debut, pitched 7 no-hit innings, but the bullpen blew the leas and he was not awarded a win, nor were the Cardinals… I said to Duane, “well, that’s what happens when you only score 1 run, you lose 2-1”… UGH! I’m about to wave the white flag on the Cardinals’ season, folks… The Beatles greet me this morning with their classic rock song: The Long & Winding Road…

Well, the overnight selling of the currencies from Sunday night, continued throughout the day on Monday… Why on earth, would investors/ traders/ hedge fund managers, be thinking that the dollar is the place to be when 1. We’re about to set a new record for length of an expansionary period. 2. The Fed has decided to hike rates late in this cycle, which has me about as confounded as can be, and 3. We as a country are ticking off our allies, and making enemies of the two countries that have said they was to change the dollar reserve status?

I posed that question to my long time friend, and former Boss, Frank Trotter, yesterday when we talked for about an hour on the phone. He seems to think that the Fed needs to be hiking rates right now… I meant to ask him if he meant, so that they have interest rates to cut in the next recession? But forgot, as I was once again mesmerized by the Jedi mind tricks of Frank Trotter! HA!

But with things all cockamamie these days, and what’s up is down, and what’s down is up, who knows where this will all go? I surely don’t… And quite frankly, I’m beginning to not give a damn, either, because if investors / traders and hedge fund managers, want to keep this circus going then I’m not going to keep telling them it’s all being done with smoke and mirrors. I’ll give them the rope, and let them hang themselves…

Yesterday in the Eurozone, we saw that Consumer Confidence fell this month -0.6%… Nothing that would have led to the euro getting sold… And this morning, July PMI (manufacturing index) ticked higher from 54.9 to 55.1 this month, led by an strong month from Germany. And yet, the euro can’t find a bid, even with this strong data print. 

I have to make an announcement here, so sit down… The Pfennig Replies mail server has basically crashed, and isn’t working, so all of you who sent me ugly emails yesterday about my position on the Russian economy and currency, aren’t going to see my response, because, well, I can’t see them!

But, I realized yesterday that I talked about economic fundamentals that were superior to other countries, and then didn’t really get into them, so here we go…

On July 12th, Russia announced that Russia’s trade surplus widened by 75.5 percent to USD 15.15 billion in May 2018 from USD 8.63 billion in the same month a year earlier, but still below market expectations of a USD 18.06 billion surplus.

Longtime readers know that I love surpluses! But that’s not all! The unemployment rate in Russia went down to 4.7 percent in May of 2018 from 5.2 percent in the corresponding month of the previous year, below market expectations of 4.9 percent. It was the lowest jobless rate since at least October 1992.

And just when you think this is over, there’s one more piece of fundamentals data here that you need to see and that is: Russia’s gross domestic product advanced by 1.3 percent year-on-year in the first quarter of 2018, matching the preliminary estimate and following a 0.9 percent growth in the previous period.

And the icing on the cake is that inflation in Russia fell to 2.3% last month! Now, I challenge you to find another country in this world that’s putting up these kinds of fundamentals… And that’s all I’m going to say about that!

My longtime friend, and former colleague, Chris Gaffney, sent me a note yesterday, and said that he had just done a presentation in Vancouver, and he had listed Russia’s economy as one of the best in the world, according to the back pages of the Economist… 

But in this day and age, fundamentals will only get you a cup of plain black coffee, that’s not even hot! I remember when currency valuations were all about fundamentals. These days I sit on cornerstones and count the time in quarter tones to ten… No wait! These days, it’s all about trader sentiment… For instance if traders went out for dinner, and went to a Mexican restaurant, only to have Montezuma’s revenge on their digestive systems overnight, they’re probably going  to sell pesos the next day…

Ok, I exaggerated there, but you get the picture, right? Alrighty then, we move along… You can’t have a discussion about Russian without talking about Gold… And well, the shiny metal is just not favored by the paper traders… On Friday, we saw Gold gain $9 but yesterday the shiny metal gave just about all of that gain back by dropping $7.50…  I know you all are getting tired of, or have already grown tired of me harping about the short Gold paper trades, so I’m not going to go there today… 

I mentioned to Frank Trotter yesterday that there seems to be a tinder box ready to go up in flames all over the world these days, and in my simple way of thinking of things, I just can’t put my finger on why Gold is being held back in these times… But, it is, and well, if it is anything these days, it’s much cheaper than it was a month ago, and a month before that! 

The Chinese are back to weakening the renminbi almost nightly again. A couple of weeks ago, it appeared that the Peoples Bank of China (PBOC) had weakened the renminbi enough, but that was before President Trump announced tariffs on an additional $200 Billion of Chinese exports to the U.S. Since the renminbi is a “managed currency”, the Chinese are able to move it wherever they please, and their thinking is straightforward, if you increase the price of my goods, I’ll lower the transaction costs… to even out the price… 

Now, the Chinese have added tariffs to U.S. goods coming into China, but here, we have the dollar rising, which is going to make the U.S. goods even more expensive… Who’s plan is going to work here?  I’ll give you a moment to think about that… 

Ok… Data-wise, this seems to be PMI Day around the world, as countries report their latest reports on the pulse of their respective manufacturing sector… For instance Japan already printed their latest PMI and it fell to the lowest level it has seen since Nov. 2016. At 51.6 the index remains above the important line in the sand figure of 50, but it’s going the wrong way… 

I mentioned the Eurozone PMI above, but there was something else going on in their PMI… In Europe, there are signs protectionism is already starting to weigh on output, with survey respondents reporting rising prices for raw materials and delivery delays.   There’s trouble brewing with the global trade war folks… And this is just the tip of the iceberg…  and each country’s economy is the Titanic… 

The U.S. Data Cupboard will have it’s own PMI for June to print today. This will be the Markit version of the PMI, which is different from the national ISM (of course we have to be different, right?).  I expect to see our PMI show signs of fatigue, but I’ll have to wait-n-see… 

To recap… The currencies and metals need for today to be a Turn-around Tuesday, after Monday’s trading just about wiped out all their gains from Friday. Chuck goes on and on about Russia’s economy this morning. Hey! don’t blame him, he was on a roll! Gold lost most of Friday’s gain yesterday, but is up $2 in the early trading today, and it’s PMI Day around the world today… 

For What it’s Worth…  more years ago than I care to admit, I met Thom Calandra, who at that time started the CBS MarketWatch, and he liked our products so much that he wrote about them, which was a good thing for our products, and his letter, because soon the dollar was dropping like a rock and he looked like a superstar!  Thom ran into some problems with the authorities years later, and he was penalized, But now he’s back, and writing a letter again, and yesterday, the GATA folks sent me a note about an article he posted on Gold, that can be found here: thomcalandra.com/cook-islands-marries-gold-royal-note/

Or, here’s your snippet: “Gold is back in circulation in small denominations as official government currency issued by the small South Pacific country of the Cook Islands, whose gold-containing bills are manufactured by the Valaurum company in Portland, Oregon.

The bills were publicized today by Thom Calandra of The Calandra Report as a reminder that there are entirely practical ways of putting gold into circulation in amounts usable for ordinary daily transactions.

Of course since the Cook Islands are too remote for a shopping trip for anyone who doesn’t live there already, the bills most likely will find use as curiosities and collector’s items. But they demonstrate that technology easily will remonetize gold as soon as governments get out of the way of free markets, which may be another reason why governments fear and undermine gold so. ”

Chuck again… Pretty interesting don’t you think? Sure it’s a tiny little island economy, but you have to start somewhere right? I’m telling you this now, so hear me now and listen to me later, the world is in need of a Gold standard, period.

Currencies today 7/24/18… American Style: A$ .7406, kiwi .6806, C$ .7602, euro 1.1705, sterling 1.3130, Swiss $1.0068, European Style: rand 13.3177, krone 8.1654, SEK 8.8250, forint 279.20, zloty 3.6910, koruna 22.0130, RUB 63.16, yen 111.05, sing 1.3638, HKD 7.8458, INR 68.80, China 6.7752, peso 18.82, BRL 3.7766, Dollar Index 94.49, Oil $68.22, 10-year 2.95%, Silver $15.53, Platinum $841.36, Palladium $924.78, and Gold… $1,226.56, and the SGE Gold Price $1,233.55

That’s it for today… What a great pitched game by the rookie last night, only to have the bullpen blow it… It’s a very frustrating season for me with these Cardinals… But they’re my team… All three grandkids were here yesterday, they play together so well, but they sure are loud! I found that my noise cancelling head phones come in handy! Well this Pfennig is in the books, and only one more to go before I head out the door for two weeks… I’ve talked about this enough that you are probably tired of hearing about it, but I always get a few emails asking where I’ve been when I’m on vacation… Frank Sinatra takes us to the finish line today with his song: Fly Me To The Moon…   I hope you have a Tom Terrific Tuesday, and that you continue to Be Good To Yourself!

Chuck Butler

July 23, 2018 

* Currencies and metals rally on Friday!

* Trump doesn’t appreciate the rate hikes!

Good Day… And a Marvelous Monday to you! A very nice weather-wise weekend here in the St. Louis area, led to a lot of outside time for me! Warm but not excessive heat, I loved it! My beloved Cardinals didn’t have the weekend series with the rival Cubs turn our the way they wanted… But boy did Matt Carpenter have “a day” on Friday… I texted my baseball buddies yesterday to say, that I have officially given up on Marcel Ozuna, not that most of you care, but that’s pretty bad when I give up on a player… I sure hope he proves me wrong! Yes, greets me this morning with their classic rock song: Roudabout…

Well, Friday’s price action in the currencies saw the dollar’s worst day in over two weeks… Seems the dollar bugs got spooked when President Trump not only blasted the Fed and their rate hikes one day, but came back for more for day two! Seems that Trump doesn’t appreciate the Fed hiking rates after all he’s done to improve the economy (tax cuts)… I don’t see this having any affect on Jerome Powell, and his band of Fed Heads from proceeding with their rate hikes, but I guess one always has to have in the back of their mind, that the President isn’t happy with them!

So, the euro, which on Thursday morning was hovering around the 1.16 handle, going back an forth around the handle. But by Friday’s end of the day/ week, the euro was 1.1745… I’ve told you all this before, but for any new readers here goes… The euro is the offset currency to the dollar, so when the dollar gets sold, the euro rallies, and vice versa… The recent trading has seen the dollar on the rally tracks just about every day, so the rain on the euro’s parade was quite heavy at times.

And Gold was allowed to rally closing on Friday up $9.20 on the day VS Thursday’s close. Boy was I ever mesmerized by Grant Williams’ Things That Make You Go Hmmmm…. Last night… He printed his speech from the recent Vancouver Conference, and in it he points out something I used to tell people all the time… In fact, a few years ago in hills outside of Atlanta, Georgia, where the EverBank managers were having a retreat, I told the people there that if Richard Nixon hadn’t removed the dollar from the Gold standard, that they wouldn’t be making so much money these days… I also told them that we wouldn’t be looking at a $15 Trillion debt, and unfunded liabilities of nearly $100 Trillion (remember this was a few years ago)… We, as a country had been growing by leaps and bounds, until the debt reached a limit where it took too much effort and attention to service the debt, and that’s when the economy began its Japan-like decade of relatively no growth…

Grant Williams pointed out that we are a need of a new Gold Standard… Again, about 6 years ago, a reader sent me a note and asked me why the U.S Gov’t didn’t just sell its Gold to pay off the debt? I then put pencil to paper, and did some math… and responded that selling the Gold at the price at that time wouldn’t put a dent in the National Debt… However, if the Gov’t wanted to reset the price of Gold, to say $10,000 per ounce, then they would have something! A reset of the Gold price wouldn’t be the first time this was done… Remember FDR confiscated everyone’s Gold and then reset the price of Gold up 75%!!!!! And then made it illegal to own Gold or trade it… We all know that’s been changed over time, but the reset is the most important thing…

Things That Go Hmmm… is a paid for subscriber newsletter, and it’s well worth the cost of admission, so just Google it or Grant Williams and you’ll find it… I rely on his newsletter to set me straight from time to time!

OK… Well, did you see/ hear about the tweet that President Trump sent out last night directed to the Iranian President? WOW! Very Strong words, but now that he’s gone to DEFCON 4 with this message, what happens if Iran ignores it and continues to threaten America?  There’s no backing down now… In case you missed it here’s the tweet: “To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!”  

Now, I’m not about talking about the President’s Tweets, but I thought for sure that this tweet would be a market mover for Gold… But a quick look at the shiny metal this morning, shows that’s just not the case, as Gold is flat as a pancake (Head East)…  

I told you last week, that what I needed was some time with my long time friend, and former boss, Frank Trotter, to help me with understanding what the heck is going on in the markets… What should be down is up, and what should be up is down…  He read that in the Pfennig, and fired off a note to me telling me this: “Things here in the US are simply madness to me. Pick a topic and rational analysis and decorum seems to no longer apply. The residents are running the insane asylum and people seem okay with that.” 

I have a call scheduled with Frank today, so hopefully he’ll be able to perform those old Jedi mind tricks on me, and I’ll hang up feeling much better about the goings on in the currencies and metals! 

The overnight markets have once again been unkind to the euro, and other currencies… Gold was able to hold its Friday gains, but not so much the euro, which gave back 1/4-cent of its gains overnight  last night.  UGH! You don’t think it’s the European Central Bank (ECB) doing the euro selling overnight do you? I mean, they need a weaker currency to help introduce inflation in their country, (they think!)…  So, they have the motive, they have access to the currency markets, so they have the weapon… Uh-oh! 

But they wouldn’t do that would they? Sell their own currency? In this day and age, I have no doubt they would…  But let’s just say that it’s not the ECB, then who?  The Russians and Chinese would much rather see the euro gain VS the dollar, as they have no qualms about telling the world that it needs a dedollarization…  

I sent off my DTL piece for this Thursday yesterday… And I’ll give you a snippet of a topic I discussed in the letter. And that is about the Russian ruble…  Think about this for a moment… What country has a Trade Surplus? What country has seen their inflation drop from near 10% to less than 3%? What country has seen economic growth, despite economic sanctions placed on them? And what country other than China has gone bonkers with Gold accumulation?  And more importantly, what country hasn’t gotten caught up in the currency wars going on right here, right now?  There’s only one answer to these questions and that is Russia, and their currency the ruble is a currency that I tend to believe should be stronger and would be if the euro got on a roll VS the dollar… 

I’m not a cheerleader for Russia, folks.. I’m just pointing out the facts that lead to a potentially strong currency… I can’t find many currencies these days that warrant getting pointed out for having a potentially strong currency!  

The U.S. Data Cupboard doesn’t have much for us in the early part of this week, with only Existing Home Sales and New Home Sales dominating the first two days of data prints this week. It’ll be Thursday when we finally see a piece of real economic data, when Durable Goods and Capital Goods Orders print for June. By the time that data prints on Thursday, I’ll be 35,000 feet in the air, on my way to my summer vacation! 

To recap… The currencies turned around and rallied on Friday, but saw some of those gains of Friday, given back in the overnight markets last night… Chuck points out, using his CSI training, that the ECB looks to be the perp we’re looking for with regards to who is selling the euro in the overnight markets?  Gold did gain $9.20 on Friday, and is flat this morning, so maybe that’s the start of something, eh?   And Chuck points out that Gold should be rallying on the President’s latest tweet, but it’s not… UGH!  

For What It’s Worth…  I thought that since I went on and on about Russia and the ruble this morning, that this article about Russiaphobia fit nicely in the FWIW section today, and it can be found here: https://www.rt.com/usa/433798-russophobia-us-russia-war/

Or, here’s your snippet: “Russian demonization and Russophobia have gripped the U.S., where politicians would rather impeach Trump than avert a nuclear war with Russia, professor emeritus at both Princeton and New York Universities Stephen Cohen believes.

While U.S. media and establishment still cannot settle nerves after Trump-Putin summit in Helsinki, Cohen, who is also contributing editor at The Nation, and Chicago University professor John Mearsheimer, bashed the Russian bogeyman approach in an interview to Vice news.

Cohen has been labelled as Russian president’s apologist, with “tsunami” of attacks on him. However, the scientist says that those people are just uninformed, with Mearsheimer adding many refuse to engage in fair dialogue with both of them merely because they would “lose the debate.”

“We’ve demonized Putin and we’ve putinized Russia, so we’ve demonized Russia. Russophobia is running amok in this country.” Cohen said. “I’ve seen these things from the inside. I’ve re-thought and re-thought how we got to the edge of war with Russia, where we haven’t been since Cuba in 1962. And I have concluded it is 95 percent our own doing.”

Chuck again… It’s all strange to me what’s going on folks…  but I do believe it’s all the discord between the parties, and the parties’ followers… I’m just saying… 

Currencies today 7/23/18… American Style: A$ .7410, kiwi .6810, C$ .7610, euro 1.1712, sterling 1.3240, Swiss $1.0083, European Style: rand 13.49, krone 8.1526, SEK 8.8342, forint 278.32, zloty 3.69, koruna 22.0585, RUB 63.12, yen 111.10, sing 1.3633, HKD 7.8474, INR 68.68, China 6.7685, peso 19.07, BRL 3.77, Dollar Index 94.46, Oil $69.08, 10-year 2.88%, Silver $15.49, Platinum $832.15, Palladium $894.02, and Gold… $1,230.38, and the SGE Gold price $1,232.32

That’s it for today… Up all night again last night… I’ve been sleeping like a baby, up every 3 hours! But I don’t have a tumor in my mouth any longer! I’m happy to trade the tumor for sleepless nights! My St. Louis oncologist, told me that my recent scans said there were two very small nodules on my lung, but that they hadn’t grown, so they’re not sure what they are… I told her, that with my history, we all know what they are…  But they aren’t growing which means the medicine is keeping them in check… I never smoked one cigarette in my life… go figure!  OK, enough of that! I have two more Pfennigs to write (Tuesday and Wednesday) and then you’re on your own for the next two weeks…  My darling granddaughter, Delaney Grace, continues to perform on the Muny stage each night with the closing night coming this Wednesday. And with that, the band, Looking Glass takes us to the finish line today with their song: Brandy…  One hit wonders, eh? I hope you have a Marvelous Monday, and remember to Be Good To Yourself!

Chuck Butler

 

 

 

 

July 19, 2018  

* Euro loses a full cent!

* Gold sees an $11 gash this morning! 

Good Day… And a Tub Thumpin’ Thursday to you! I’m hoping to recharge my batteries early this morning, so I am able to participate! It was a very late night for yours truly, but one that was well worth it! Delaney Grace was on stage at the Muny! If you’ve ever been to St. Louis in the summer, you’ve probably heard or had the opportunity to see a production at the Muny… And there was my little bundle of joy, dancing and singing on the stage! She was GREAT! And she’ll be back on stage for nightly presentations of ANNIE for a week! The Kinks greet me this morning with their song: Sunny Afternoon… 

Well, I think I had better be getting my things in order to walk away from all this… Recall I told you a couple of weeks ago that if things didn’t work they way I described them that I would have to really “retire”, as my credibility would be shot!  And judging from what happened in the overnight markets last night, I’ve got one foot out the door… 

So, let’s get to it…  Yesterday late afternoon, I checked to see how the markets were behaving, and things looked a bit better, the euro had climed higher within the 1.16 handle, Gold was holding its own, and things seemed calmed down… But that was all put to bed last night, the currencies, led by the Big Dog, euro, got trashed once again, and Gold is down $11.30 in the early morning trading today… 

It doesn’t help the currencies when one of the major currencies, is dropping like a rock, as the rate hike thoughts have turned to mush for pound sterling… This morning they printed their latest Retail Sales report and it was negative! OUCH!  That’s going to leave a mark! Yes, a June print for Retail Sales in the U.K. was a negative -0.5%!  

There’s been not a peep from the European Central Bank (ECB) and so the currencies aren’t even fighting back… They are acting like the 90lb weakling that gets sand kicked in its face by the big bully (dollar), and cowers in fear and doesn’t dare fight back. 

I hesitate to even mention this, as I’m sure I will be putting the old jinx on it, but with all the currencies getting whacked, there is one that needs to be singled out for not getting caught up in the dollar buying…  The Canadian dollar/ loonie has quietly moved higher by 2-cents in the past week…  

Gold yesterday traded down 10-cents… marking two days of trading and about 500,000 contracts for the two days, and not even a full $1 movement in the two days, that is until this morning.  I read a piece/ opinion on gold this morning on Bloomberg, and since it’s not what I would like to hear, I think you need to read at least a piece of it… 

“The gold chart is incredibly ugly these days. The precious metal is at its lowest level in more than a year, having fallen by over 10 percent since early January. But what’s even worse is that bullion has become boring. A few years ago, in the pre- and post-crisis era, it got tons of attention. Now nobody outside of some die-hard enthusiasts really care. Even critics don’t spend much time on gold, with many of them having moved onto bashing crypto. Still, one must marvel at the cognitive dissonance gold bugs need to have. They argue that the economy remains in a gigantic bubble that’s being held up by central bank stimulus all over the world. And yet gold is meant to be a check or a hedge against precisely that behavior. So either gold isn’t working as advertised, or the economy isn’t the gigantic scam it’s made out to be. It’s basically one or the other. All this being said, just because the bull story has collapsed, it doesn’t mean its argument is flawed.” – Bloomberg 7/19/18

Chuck Again… To that, I would say, yes, what you say is correct, but what you left out, is that physical Gold isn’t allowed to trade on supply/ demand mechanics, that there’s just too much interference from the paper trades, and as long as that scenario exists, people like me that believe in Gold as a store of wealth, will have to hear about how Gold is failing to live up to its historic performances… 

OK, since this is all going on this morning, I think it would be best for me to go through a short list of reasons why this dollar rally is on a wobbly three legged stool…  So, the Fed says they’re on pace to continue hiking rates (which has helped the dollar turn around), but what happens when the rug is pulled out from under the economy? And more so, out from under inflation?  Well, that would be the end of the rate hikes, that’s what! And here’s a hint of what I’m talking about… Real average hourly earnings haven’t managed to rise in any of the past three months. What does this tell me? Well it tells me that inflation is falling again, and I wonder why? Oh, that’s right, Chuck, you told us all two years ago what Fed Rate hikes were going to do for inflation! 

Now… for all of you who do not believe me that we are a country that has gone from making things to sell, to buying things, and receiving things for doing nothing, take a gander at this info I pulled from Paul Ryan’s twitter page yesterday… “The last time unemployment levels were this low, there were 17 million SNAP recipients. Now there are 42 million.”

42 Million SNAP recipients? Are you kidding me? That’s really strange for a country that is supposedly at full employment (even with 95 million people still looking for work), and an economy that’s robust, (but could only muster 0.5% growth in Retail Sales in a month full of graduation gifts!)  Smoke and mirrors, folks… That’s what the Fed and Treasury are using on you, to make this all look good…  But, if this (dollar strength) is what comes of all this, then I give up… Raise the white flag….  Because all that I’ve learned in economics and currency valuations is being thrown out the window, folks… 

But I’m still here, talking about it, so no worries about me… I’ll continue to talk about how this doesn’t make sense, point out the things that worry me, and should worry the markets, but don’t… 

The U.S. Data Cupboard doesn’t really have much for us today, and yesterday it had housing data that showed June data on Housing Starts that fell from 1.337 Million in May to 1.173 Million in June… And like I just said there’s not much today, so more dollar buying will take place given that if there’s no real data printing, there’s no bad data printing to soften the dollar! 

To recap… It was a very ugly night for the currencies and metals, with the euro down 1-cent, and Gold down $11.30 in the early morning trading. Forget the Trade War, forget the exploding debt here in the U.S., forget the fact that there are 42 Million SNAP recipients… 

For What It’s Worth…  this morning’s FWIW piece come to us courtesy of the WSJ and was sent to me by long time reader, Bob…  (thanks!) it’s about the rising debt here in the U.S. and you’ll have to have a WSJ subscription to read it all…  

Or, here’s your snippet: “WASHINGTON—The Trump administration expects annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years, pushing the federal deficit above $1 trillion starting next year.

The revisions, which went largely unnoticed when the White House submitted its annual update to Congress last week, reflect the cost of federal spending increases agreed to earlier this year and higher interest payments.

The budget proposal released in February showed annual deficits totaling $7.1 trillion over 10 years. The latest revisions increase these cumulative deficits by $926 billion, to $8 trillion.”

Chuck again… And I’m so sure of this if I were a betting man, I would be the farm that even these upward revised numbers will be low, when the final tally comes in… I’m just saying… 

Currencies today 7/19/18… American Style: A$ .7342, kiwi .6730, C$ .7705, euro 1.16, sterling 1.2980, Swiss $.9975, … European Style: rand 13.4460, krone 8.25, SEK 8.9350, forint 280.86, zloty 3.7330, koruna 22.3438, RUB 62.90, yen 113, sing 1.3723, HKD 7.8494, INR 68.91, China 6.7144, peso 19.06, BRL 3.8393, Dollar Index 95.49, Oil $68.23, 10-year 2.88%, Silver $15.28, Platinum $799.66, Palladium $893.72, and Gold… $1,216.21

That’s it for today… and this week… I’m going to need to find my old boss and friend, Frank Trotter, for when we worked together and things didn’t make sense a visit with Frank would help me to sort things out… Frank? are you out there? Last night was just perfect for sitting outside at the Muny, as the heat backed off, there was a nice summer breeze,  and my little d, as I call her, Delaney Grace was on the stage! My beloved Cardinals get back on the ballfield tonight so good luck to them for the 2nd half of the season, may it be much better than the first half was! One 3 more Pfennigs next week, and then I’m on my annual summer vacation! And with that thought… The Commodores takes us to the finish line today with their song: Brick House…  That song will get you dancing in your seat! Ok, I hope you have an opportunity to make this a Tub Thumpin’ Thursday, and remember to Be Good To Yourself! 

Chuck Butler

 

 

July 18, 2018  

* Gold gets whacked badly!

* Currencies get sold again!

Good Day… and a Wonderful Wednesday to you! I had a great time with my grandson, Braden, yesterday, and at the end of the day he said I was his BFF! Well, I can tell you this right here, right now, that the title BFF wouldn’t last 2 minutes if I refused to let him swim in the pool! But for now, I’m beaming like a proud BFF… The All-Star Game last night, was pretty light on highlights, and after about 4 innings, it no longer held my attention! And no I’m not ADHD! Or whatever the letters that are used to describe someone with no ability to focus and sit tight! I did see this morning though that 10 home runs were hit in the game that ended up 8-6 AL… Bob Marley greets me this morning with his song: 3 Little Birds… Don’t worry, cause every little thing is gonna be alright…

My Monday Pfennig was titled: Could We All Just Get Along? And after the Helsinki summit where President Trump met Russian President Putin, I need to repeat that over and over again… How in the world can Trump’s detractors rail on him for meeting with Putin? I shake my head in disbelief! Oh, and before you think this letter has gone political, I’ll just point out that I’m no fan of the Trump tariffs, I’ve said it, defended it, and will do it again!

Well, Monday’s “nothing day” when the currencies and metals were stuck in the mud ended when the beginning of Tuesday morning’s trading began… Once again, the currency rally of Friday last week,, was wiped out with dollar buying on Tuesday. So it was a turnaround Tuesday for the dollar… I have no idea why, other than the stuff that came out of the U.S. Data Cupboard, which you could have had a positive knee-jerk reaction to, but real traders would have looked at last month’s negative -0.5% print, and then compared this month’s (June print) 0.6% gain, and call it basically a wash… But I’m sure some boy-genius, said that this is the start of a trend, and bought dollars…

The euro lost the 1.17 handle, and all the other currencies followed the Big Dog, and were sold too… And Gold? It got sold like funnel cakes at a State Fair, and most of it was paper trades.  But they get to drive the price of Gold down, and since there are more of them than the physical trades, guess who wins? The short Gold paper trades totaled 268,000 yesterday, quite a bit more than usual for a summer day…  As of last Saturday, Ed Steer (www.edsteergoldsilver.com) showed that it would take 60 days of Gold production to cover the amount of ounces sold short in the paper trades. And yesterday’s trading showed trades were entered for Gold, with the probability of a large number of those being short Gold paper trades, being very high! 

The selling in Gold s live leaving blood in the ocean for the sharks to come in a take a bite out of what’s left, and that’s what going on this morning, as Gold is down another $5 in the early morning trading today… 

Speaking of short paper trades… the number of days of production that’s needed to cover the total ounces sold short in Silver is… are you ready for this? … . 216 days, which is a bit over 7 months of world silver production…

The GATA folks sent me this email last night, check it out… “Craig Hemke of the TF Metals Report, writing at Sprott Money, reports tonight that in recent months India’s demand for silver has been running at record levels. But Hemke adds that paper silver traded on the New York Commodities Exchange trades every two days more silver than the world produces in a year.

“Led by India,” Hemke writes, “the world is on pace to consume all the silver produced in 2018, yet the dollar price of silver is now down over 10 percent year to date. That’s a dichotomy that must soon rectify itself. Either physical silver demand will crash before year-end or the paper price will be forced to respond as it did in 2016.”

I shake my head in disgust that this continues to be allowed to go on…  

The price of Oil also saw selling once again, and what for a fleeting moment about 10 days ago, looked like the Price of Oil was heading to $80 and higher?, has been wiped out… And the price of Oil is trading with a $67 handle this morning… I alluded to the ideal of some price shenanigans with Oil yesterday, and I truly believe it to be true, that there’s something else at work here… And it’s not just the increased production from the Saudis that have caused the price of Oil to drop like a rock in the past 10 days!

In The U.K. this morning, they posted their latest CPI (consumer inflation) and it fell… Core CPI dropped to 1.9%, a 15 month low, and out the window went any remaining hopes of a rate hike soon here… And Bank of England (BOE) Gov. Mark Carney? He was nowhere to be found, because he’s hoping that if he stays out of sight, it will be a out of sight out of mind experience for him, and he has egg all over his face right now…  I shake my head in disbelief that the markets were fooled once again by this man’s bag full of promises to hike rates… Tsk, Tsk Tsk.. 

I’m doing a lot of shaking of my head this morning, so I had better wrap this up soon, or I’ll be getting dizzy!  I already talked about the outcomes in the U.S. Data Cupboard yesterday, but we did also have the first of two testimonies by Fed Chairman Jerome Powell to lawmakers. And like I said yesterday, he didn’t tell us anything new, it was the same old yadda, yadda, yadda…   But I did pull this from his speech, and while reading it I bet you’ll be able to tell me why I highlighted this section…  Ok… here we go… 

“Powell said the unemployment rate is expected to fall further and the Fed’s challenge will be to keep inflation close to 2%. Key unknowns are the outcome of the ongoing trade disputes and the impact of the Trump tax cuts and boost in federal spending, he said. “Overall, we see the risk of the economy unexpectedly weakening as roughly balanced with the possibility of the economy growing faster than we currently anticipate.” 

Yes, just like a two handed economist right? on one hand we could see this, and on the other hand we could see this…  And why did he come out with that two handed statement about risk to the economy weakening as balanced with the possibility the economy could grow faster?  Because he’s greasing the tracks for whatever outcome comes about, and he be able to say, “see I told you”…  

There’s not much in the U.S. Data Cupboard today except some Housing Data, that I just don’t see as market moving at this point.  Powell will makes the second of his two testimonies today, and I expect today to be a mirror image of yesterday’s speech.  

To recap… Gold got whacked badly yesterday, and the sharks are circling the blood stained waters this morning and Gold is already down $5 in the early morning trading today. The currencies also got whacked yesterday, the euro lost 1-cent, Oil lost another buck in its price, and the dollar is for some unknown reason pounding its chest… Chuck goes through some numbers on data, and short paper trades in Gold & Silver.. 

For What It’s Worth… Well, I told you last month that Russia had sold 1/2 of their Treasuries they held in reserves. According to the folks at zerohedge.com Russia has sold their remaining Treasuries now… this is all detailed with graphs and is a good write up that can be found here: https://www.zerohedge.com/news/2018-07-17/russia-liquidates-its-us-treasury-holdings

Or, here’s your snippet: “Readers may recall that last month we first reported that for all the confusion about sharply higher yields in April, the explanation was simple: it was Vladimir Putin who liquidated a whopping half of Russia’s Treasury holdings, which declined by $47.4BN to just $48.7BN – the lowest since 2008 – from $96BN in March.

But wait, it gets better, because as Trump continued to jawbone about more sanctions targeting Russia, Putin did not stop and in May he continued what was an outright liquidation of Russia’s TSY holdings, which plunged by another $40BN, or 82%, from $48.7BN to just $9BN in May. Keep in mind this was over $100BN at the start of the year.

It appears that When Putin warned he would diversify Russia’s state reserves out of Treasuries – he was serious.”

Chuck again…  Recall that I said that I thought that Russia’s first sale of Treasuries was a test for China to see the reaction of the markets and the U.S.? The next big seller will be China… well, that’s how I see this all unfolding, folks… I sure hope I’m wrong on this!

Currencies today 7/18/18… American Style: A$ .7355, kiwi .6765, C$ .7673, euro 1.1620, sterling 1.3035, Swiss $1.00, European Style: rand 13.3208, krone 8.1728, SEK 8.8645, forint 278.60, zloty 3.7090, koruna 22.2380, RUB 62.44, yen 113, sing 1.3682, HKD 7.8493, INR 68.44, China 6.6900, peso 18.96, BRL 3.8549, Dollar Index 18.96, Oil $67.62, 10-year 2.85%, Silver $15.44, Platinum $806.34, Palladium $907.79, and Gold… $1,222.75

That’s it for today…  I need to get my eyesight checked today, they make sure that my remaining eye remains in good health… And then I’ll be off to the Muny, St. Louis’ outdoor theater, that’s been around for 100 years! My darling granddaughter, Delaney Grace is an orphan kid in the presentation of Annie tonight!  I’ll be smiling from ear to ear when I see her up on that huge stage! Kathy got home yesterday, just in time for Delaney’s Muny debut! So, someone’s moving around upstairs, and it startled me at first because I’m use to being alone here!   The Steve Miller Bank takes us to the finish line today with his song: Serenade…  Stevie Guitar Miller on the iPod this morning! I hope you have a Wonderful Wednesday and remember to Be Good To Yourself!

Chuck Butler

 

July 17, 2018

* A nothing day for currencies & metals on Monday

* Cut the pork, will you Lawmakers?

Good Day… And a Tom Terrific Tuesday to you! Well, my busy day yesterday, got to me about mid afternoon, and I was wiped out, took a long nap, and was then ready to watch the Home Run Derby… I’m reminded of a HRD of years ago, when I was recovering from my two major cancer surgeries, and my colleagues, Chris, Mike, and Christine, came to visit with me… Good memories…  One of my doctors told me yesterday, that I’m his best patient, and that he loved it when I came in! WOW! My grandson, Braden is coming to spend the day with me… Just me and Braden, I wonder how this turns out! HA!  Seals & Crofts greet me this morning with their song: Summer Breeze…  

Well, yesterday’s trading was a lot of nothing.. No major movements anywhere, the Dollar Index at the end of the day stood at 94.55, and it began the day at 94.53…  Gold lost 80-cents on the day!  Have the Dog Days of Summer come upon us already? 

The U.S. Data Cupboard had the June Retail Sales print for us yesterday… Recall that I call this print a piece of real economic data, so paying attention to it is called for. And like I told you yesterday, the BHI indicated that June’s report would good, not great, but good, and that it was, gaining 0.5% for the month.  When I looked at that yesterday I got this feeling of being let down…  I asked myself, “is this all we get for all we did as a country to spur consumption?” 

Do I think consumers have finally figured it out that sooner or later the bill comes in the mail for their purchases, and if they don’t have the money they won’t buy? I doubt it one second! We’re a country of consumers, we buy, buy, buy…  But as a country of consumers we do catch our collective breaths every now and then, and when we do, the numbers begin to look ugly…  But the point I’m getting to eventually, is this… The U.S. Gov’t and Fed went a long way toward ruining our financial system to get us to this point, and it’s just not what we paid for! 

This past weekend, President Trump said some things about NATO that had a lot of people up in arms… But if you go back to the Chuck’s Debt Solutions from many years ago, I was the first to call for the closing of military bases around the world, especially in countries where the citizens don’t’ want us there to begin with! Now, if that was my call then, I was sure happy to hear the President call NATO to the red carpet… and then tell them they’re obsolete, and that the European countries need to buck up and pay more of their share of the costs of NATO… You tell ‘em!

I spoke about the Federal Budget Deficit yesterday, and good friend, Dennis Miller, sent me a note that he too had written about it in his letter published last Thursday (the day that I was whacked out!). So, I thought I would share with you one of his thoughts on the Federal Debt… Here’s Dennis Miller (www.milleronthemoney.com)

“Today you spoke about government debt. This was last weeks article and I realize you were fogged over. What I found amazing was the budget deficit and the government grants were almost identical.

Congress gives us the BS that there is nowhere to cut the budget. What crap! If they all stopped their pork giveaways, we would have a balanced budget.

This explains to me why Reagan said no matter how much you take in… congress will spend more. They look at revenue as their personal piggy bank.” – Dennis Miller

Chuck again… Thanks Dennis… Yes, I was “fogged over” last Thursday… But I’m back now, and I bet you all are happy as larks that I’m back! HA!

I mentioned above that Gold lost 80-cents yesterday… And that move contributed to my thought that it was a nothing day in the currencies and metals… Have you noticed how the price of Oil has been taken back down so swiftly? I’m going to have to call foul on this move…  The fingers are all pointing at Saudi Arabia’s call to increase production… And while that could have caused some slippage, I’m not buying what they’re selling here, as the reason for this huge drop in the price of Oil… There’s something else in the works here folks… That’s all I’m saying… 

I did let the cat out of the bag last week, when I said that all markets are manipulated… OOOPS, did I say that out loud? I guess I did! No one wants to hear those words, but they’ve got to be said, and if their said enough and loud enough then maybe some regulator will do something about it, but I’m dreaming folks… And before I go deeper into that rabbit hole, I’m going to climb out, and live another day! 

Fed Chairman, Jerome Powell, will be speaking today and tomorrow, so this must be the semi-annual trip to give the Fed Chairman’s testimony on the economy to both houses of the Gov’t. It used to be called the Humphrey-Hawkins Bill, but that bill expired long ago, and Fed chairmen and woman have continued to make the trip up to the “hill”…  I could say that the markets are awaiting Powell’s speech to give them some direction, but deep down I don’t believe that to be the case…  Why?

Because they’ve and we’ve heard it all before… The economy is robust, unemployment is down, yadda, yadda, yadda…  Pink Floyd said it best when they wrote in their song: It’s a battle of words, and most of them are lies… 

The U.S. Data Cupboard has two pieces of real economic data for us today… Industrial Production and Capacity Utilization will print the June’s results today. As I said yesterday, I suspect that the Industrial Production data will reverse May’s negative print, but in all for the year, this data is still underwhelming…   I read a report the other day, about how Capital expenditures are falling, and plans to spend are also showing signs of backing off…  Capital expenditures, or CAPEX, are what makes the economy go around folks… This is an easy thing to check out folks… Check around your place of business, are they planning on making equipment purchases, expand space, etc.? 

It’s all about the U.S. Data and Powell speech today folks, there’s just not much going on overseas today… China did print their latest GDP figure and called it weak at 6.7%…  Sure, it’s not the go-go years of 10% clips and above for Chinese GDP, but weak?  If we saw GDP of 6.7% here in the U.S. we would be dancing in the streets!  We did see that Russian Industrial Production for June printed this morning, and it was not a strong number, only gaining 2.2% VS 3.7% in the previous print… 

The Russian ruble has had to deal with sudden drop in the price of Oil, and now this weaker IP data… Hang on ruble, times will be better…  reminds me of a great 60’s song: Hang on Sloopy, Sloopy hang on… 

I’ve been pleasantly surprised by the resiliency of the Canadian dollar / loonie…  The loonie saw weakness late last month after they picked a fight with the bully, and lost, but has regained its mojo, and has withstood the test of a price drop in Oil. 

To recap… It was a nothing day in the currencies and metals, as there was little movement if any in both asset classes. The Dollar Index dropped 3 ticks from yesterday morning’s figure, and Gold lost 80-cents on the day…  nothing…  Fed Chairman Powell heads to Capitol Hill today for the first of his two speeches to lawmakers, and Chuck believes it will be more of the same yadda, yadda, yadda…  

For What It’s Worth…  OK… I’ve said this quite a few times previously, but when I saw this article, it reminded me that Debt Is Everywhere!  And this article breaks that down and can be found here:https://www.blacklistednews.com/article/67143/there-is-now-officially-3-times-more-debt-in-the-world-than.html  

Or, here’s your snippet: ” You may well have seen in the news the last couple of days that global debt has reached another all time high. After climbing to astonishing $247 trillion when combining public debt of around $60 trillion and non-financial sector debt of about $186 trillion.

This eye-watering figure also means that for the first time ever there is now officially 3 times more debt in the world than money.
It has been reported that this astounding level of debt is causing major cause by investors on top of ongoing concerns about the Federal Reserve’s monetary policy.”

Chuck again… 3 times more debt in the world than actual money… Now how’s that going to work out? Badly, if you ask me, but then I’ve said that all along, but who listens to me? 

Currencies today 7/17/18… American Style: A$ .7407, kiwi .6815, C$ .7572, euro 1.1715, sterling 1.3208, Swiss $1.0052, …European style: rand 13.2720, krone 8.0960, SEK 8.7880, forint 275.80, zloty 3.6720, koruna 22.0735, RUB 62.31, yen 112.55, sing 1.3612, HKD 7.8486, INR 68.28, China 6.6847, peso 18.93, BRL 3.8546, Dollar Index 94.50, Oil $68.13, 10-year 2.85%, Silver $15.76, Platinum $822.71, Palladium $916.56, and Gold… $1,241.31

That’s it for today… Well, I had better get ready for the arrival of Braden today… I had a pretty good day with my stomach yesterday, so hopefully that can continue today… I cringe when I load up the meds in the morning and at night, and realize they are the reason I have stomach problems… of course if I just didn’t eat I wouldn’t have any problems either!  HA!  I used to tell people that I was trying to grow to 6’4″ because I had reached the perfect weight for someone that tall, and I had more of a chance of growing taller at my age, then I did losing the weight! HA! So, here’s to growing to 6’4″!  A Big Thanks to my good friend, Terri, who helped me get something done yesterday, and she went out of her way to get it done for me! Thank YOU!  Ok, Uriah Heep takes us to the finish line today with their song: Sweet Lorraine…  I hope you have a Tom Terrific Tuesday, and remember to Be Good To Yourself!

Chuck Butler

 

July 16, 2018

* Consumer Debt Soars In June!

* Currencies attempt to come back!

Good Day… And a Marvelous Monday to you! Thanks so much for understanding my plight last Thursday I must have scared a few people, as even my good friend, Duane, sent me a text, asking me if I was OK?  It all passed by Thursday afternoon, and Friday was a new day, full of sunshine and lollipops! I have no idea why the medicine whacks me out like that sometimes… But, I guess I have to say thanks to the Lord, that it doesn’t whack me out like that all the time! The Pousette Dart Band greets me this morning with their song: Amnesia…   I hope that it’s only amnesia, believe me I’m sick but not insane! 

The currencies fought back on Friday to gain a bit VS the dollar, on the day. The week of relatively little economic data came to and end last Friday with a weaker Consumer Confidence Index for July, printing at 97.1 down from June’s 98.2…  On Thursday last week, the U.S. printed its Federal Budget number, and in June, let me remind you that in June quarterly taxes are due, the U.S. posted its second largest June deficit of $75 Billion! 

Here’s the breakdown in case you were keeping score at home: Where the money was spent on social security ($88BN), defense ($65BN), Medicare ($79BN), Interest on Debt ($32BN), and Other ($126BN).  The $75 Billion net deficit, saw receipts of $316 Billion…  There are some other items in the numbers but these are the biggest expenditures…  

Did you notice the $32 Billion spent on bond servicing? And that was just in the month of June… That means if we multiply it by 12 we would get the annual amount spent on paying the interest on debt, and it would be $322 Billion… And that’s at much lower interest rates than will be available going forward!   I’m so disgusted with the lawmakers in this country that I wouldn’t mind if they all lost their reelections. That they have sold the country down the road for a bagful of promises to social security, Medicare, Medicaid, and whatever other Gov’t handout that’s available to them.   They don’t care how much debt they incur, because by the time it all comes crashing down they won’t be in office any longer and it will be someone else’s problem…  Shame, Shame, Shame…  I don’t know how they live with themselves knowing well what they are doing… 

And the Fed is no better, as they’ve allowed the lawmakers the ability to run up debt with zero interest rates for 10 years, now, and even after 3 years of rate hikes, our Fed Funds rate is still only 2%!!!!  I’m get riled up here, don’t know if you can tell, but my blood is boiling thinking about this mess our country is in, and all these people with their grand schemes have failed miserably…  But we as a country (as a whole, not Pfennig Readers!) would rather be intrigued by whether or not Putin rigged the election, than we care about what the lawmakers and Fed Heads are doing to our country! 

OK… I’ll step down from my soapbox now, maybe I can calm down a bit, here… I have to because I’m all alone here, if I passed out or had a heart attack no one would know… So, settle down Chuck, take a sip of coffee, savor it, and then sit back for a minute before continuing on…  Ok, I’ll be back in a minute… 

So, I told you above that the currencies attempted to fight back VS the dollar on Friday, and that was all good, but the real move came last night in the overnight markets, and for once in a blue moon, the overnight markets saw the currencies continue to their moves higher VS the dollar. I told you last week that I thought the dollar rally was over, and then just to prove me wrong, the green/peachback rallied for a couple of days… 

So, once again we sit at the crossroads that has one route heading to more dollar strength, and the other heading to dollar weakness… I’m going to pick the one that has dollar weakness, but I’m hesitant, because the manipulators have proved that they can move the dollar where they want to, as long as it makes them feel alright! If traders show a lot of commitment toward dollar weakness, then the manipulators will step back and play in the shadows…

In the overseas data cupboards this morning, we saw Chinese Industrial Production for May, slip a bit from 6.8% in April to 6% in May, but to offset that slippage, Chinese Retail Sales also printed for June, and saw an increase from the May print of 8.5%, to 9% in June. A mixed bag-0-nuts there, folks, and nothing to really hang your hat on… Let’s move on…

In the Eurozone this morning, they printed their May Trade Balance and saw a nice narrowing of the deficit that printed in April at euro 18.8 Billion to the Mary print of euro 16.9 Billion.   

And finally, today continues the meeting of President Trump and Russian President Putin… I see what Trump wanted to do, as he thought he was on a roll after the meeting with the N. Korean leader, but as time has gone on, that meeting with N. Korea’s leader has turned sour, and hopefully Trump can salvage something from this meeting with Putin… In my view, which is in the cheap seats, so I don’t have an up front and close view, I see the world wanting the U.S. and Russia to get along… 

Since we went down the data cupboard road for overseas, we might as well see what’s going on in the U.S. Data Cupboard… Well, the U.S. Data Cupboard gets restocked this week with a truck load of data, and some real economic data reports, starting today with June’s print of Retail Sales…  The Butler Household Index (BHI) tells me that in June Retail Sales should be good, not great, but good…  (lots of money spent in the U.S. on graduation gifts)…  

According to the latest Monthly Treasury Statement, in June, the US collected $316BN in receipts – consisting of $162BN in individual income tax, $94BN in social security and payroll tax, $3BN in corporate tax and $22BN in other taxes and duties- a drop of 6.6% from the $338.7BN collected last June and a reversal from the recent increasing trend…even as Federal spending also dipped, down 8.8% from $428.9BN last June to $391.1BN last month.

Where the money was spent on social security ($88BN), defense ($65BN), Medicare ($79BN), Interest on Debt ($32BN), and Other ($126BN).

This resulted in a June budget deficit of $75 billion, better than the consensus estimate of $98BN, and an improvement from the $147 billion deficit in May and as well as slightly less than the deficit of $90.2 billion recorded in June of 2017. This was the second biggest June budget deficit since the financial crisis.

Tomorrow’s Data Cupboard will have the latest prints of Industrial Production and Capacity Utilization, and I would look for some recovery in the June print from the negative prints in May… But that’s tomorrow, and you know my saying for that… let tomorrow be… 

I watched a quick video this morning from CNBC that had Ron Paul talking about a great collapse that he sees coming, that has its roots in all the debt… And he something that plays well in the sandbox with my call that that the Fed’s “Great Unwind” of their balance sheet won’t get too much further, before they have to call it off…  Mainstream America just didn’t get Ron Paul, just like they didn’t get Ross Perot, but people like us, Pfennig Readers, we get them, they are true Austrian economics folks… 

This weekend I took a walk through all my books here that I’ve read through the years, and came across the book that I wrote the Foreword for in 2008…  Addison Wiggin’s: The Demise of the Dollar, with Foreword by Chuck Butler.. It was the first time I had any words printed in a book. I then remembered that I wrote a whole chapter for the Little Book of Dollar of a Shrinking Dollar…  I know the guys like John Mauldin, James Rickards, and Addison Wiggin, and Bill Bonner have all written multitude of books through the years, but I’m very proud of my short pieces for these books mentioned above… Something my grandkids can look up one day, and say, “Grandma, the general (that’s what they call me), sure was a smart man, wasn’t he?” 

The folks at Wiley publishing used to contact me all the time about writing a book, and at the time I was busy trading and managing risk at EverBank World Markets, traveling to speak, and writing the Pfennig every day… I had no time to allocate to book writing, and now that I’m no longer doing all those things I no longer hear from them…  Boy, I have no idea how I slipped down this rabbit hole, but I’ve got to get out of it before I begin to point fingers… 

To recap…  The currencies rallied on Friday, and then bucking the recent trend to sell the currencies in the overnight markets, they continued their Friday rally last night… Is the dollar rally finally over?   Did you see the HUGE, Monstrous, Godzilla-like Consumer Credit (read debt) report from last week? Chuck breaks it down for you… Chuck also gets on his soapbox this morning, so you won’t want to have missed that! 

For What It’s Worth… The folks at MarketWatch sent me this late last week, and I saved it for my FWIW section today. It’s about when the tariffs will begin to be felt by consumers and can be found here: https://www.marketwatch.com/story/heres-when-americans-will-start-feeling-the-pain-from-escalating-trump-imposed-tariffs-2018-07-11?mod=MW_section_top_stories   

Or, here’s your snippet: “Very few Americans have paid a price from escalating U.S. tariffs, but if trade fights get worse, the first big bill will come due shortly after the school year starts.

An initial blast of tariffs, mostly targeting $50 billion in Chinese goods, was tailored by the Trump administration to minimize the damage to the U.S. economy. Consumers or businesses could more easily find substitutes for goods whose prices would rise due to higher U.S. tariffs.

For now most consumers don’t have to worry much. The economy accelerated rapidly in the spring and is expected to remain strong through the summer months.

Come fall, though, and the price of many imported consumer goods in the crosshairs of the White House could begin to rise.

China exported about $500 billion in products to the U.S. in 2017. They encompass a vast range of goods such as fabrics, clothing, vacuum cleaners, refrigerators, computers, lighting and so forth — the kind of goods that are no longer made in America or are only made in small quantities.

Absent another source of supply, prices on these goods are sure to rise.”

Chuck Again…  Good analysis here… that I agree with. 

Currencies today 7/16/18…   merican Style: A$ .7425, kiwi .6782, C$ .7545, euro 1.1710, sterling 1.3253, Swiss $1.0014, … European Style: rand 13.2140, krone 8.008, SEK 8.8208, forint 275.50, zloty 3.6760, koruna 22.1040, RUB 62.52, yen 112.42, sing 1.3620, HKD 7.8485, INR 68.53, China 6.6897, peso 18.80, BRL 3.8510, Dollar Index 94.53, Oil $69.35, 10-year 2.85%, Silver $15.78, Platinum $824.63, Palladium $932.21, and Gold… $1,241.09

That’s it for today… I’ve got a busy day ahead, and need to clean up the house from all the parties I’ve had while Kathy was gone… (NOT!) the house looks hardly lived in! But a busy day for me… Well, I’ll my pointing out that the Cardinals poor play was the manager’s fault, came to a head Saturday night, when the Manager was fired… You can’t fire all the players, so you fire the leader…  The All-Star Game is tomorrow night… I have two pictures on my wall here of me and my two boys, at the All-Star Game back in 2009, and one of just the two boys. Good memories…  And with that it’s time to go, and America takes us to the finish line with their song: Lonely People..  I hope you have a Marvelous Monday, and Be Good To Yourself!

Chuck Butler

 

 

 

 

 

July 13, 2018

 

Good Day… And a Tub Thumpin’ Thursday to you! I’m not going to be able to participate in the Tub Thumpin’ today, folks… In fact this is going to a record for the shortest Pfennig ever! The meds have whacked me out, I was awake almost half the night, and finally got to sleep when the alarm went off… I’ve tolerated this new chemo to a degree, and that has been run over with a Mack Truck this morning… So, I’ll give you the currency roundup, and head back to bed, hopefully by noon or so, this death warmed over feeling will have stopped! 

There’s been more dollar buying overnight, and the currencies all are getting knocked around, along with the price of Oil and the Gold, I guess it’s a good thing I’m not commenting on all this today, I would probably say something that got me in deep dookie… 

Currencies today 7/13/18…. American Style: A$ .7383, kiwi .6758, C$ .7576, euro 1.1652, sterling 1.3190, Swiss $1.0014, European Style: rand 13.4350, krone 8.1152, SEK 8.8675, forint 279.12, zloty 3.7131, koruna 22.2624, RUB 62.07, yen 112.55, sing 1.3636, HKD 7.8479, INR 68.42, China 6.6674, peso 18.95, BRL 3.8366, Dollar Index 94.90, Oil $70.85, 10-year 2.86%, Silver $15.86, Platinum $831.56, Palladium $939.65, and Gold… $1,244.58 (not change in the SGE for days now)

That’s it for today, sorry for the short Pfennig, I really can’t believe I was able to get through this much of it!  Have a great day, and Be Good To Yourself!

Chuck Butler