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Rocktober 19, 2017  

* New Zealand gets new coalition gov’t!

* Dollar buying ends overnight 

* Is Gold ready for a turnaround? 

 

Good day… And a Tub Thumpin’ Thursday to you! Not for me, but for you! What a night for our Blues! The thumped the rival Blackhawks 5-2 last night, and I watched the whole game! I feel like someone took a bat and tenderized my body while I slept last night! UGH! I prefer to feel at the top of the game when I go in for an infusion, which isn’t going to happen today!  Don Henley greets me this morning with his song: The Last Worthless Evening…   

The dollar strength of the last two days has faded and the currencies are making a comeback as I write this morning.  the outlier is kiwi… From the title today, you know that kiwi got taken to the woodshed last night, but that doesn’t tell you why, and, well.. that’s what I’m going to do right here, right now! 

OK.. Recall a couple of weeks ago, when kiwi got whacked because the election there left uncertainty about what Party would be able to form a coalition government… That uncertainty has been taken care of, as it was announced last night that the Labor Party had formed a coalition government, and now we have a different uncertainty hanging over kiwi like the Sword of Damocles…  And so kiwi lost 1 whole cent overnight or 1.6%, for those of you keeping score at home!  

You see, the Labor Party is all about spending, and more spending, and they want to dictate to the Reserve Bank of New Zealand (RBNZ) how to calculate things…  this is not a good development for New Zealand folks, and threatens the path that New Zealand was on with regard to economic growth. But did the markets overact with selling kiwi?  Yes…  But as I was explaining to someone last night, the markets always either over buy or over sell… It’s what they do!  In the end, I would look for kiwi to recover some lost ground, starting today…   

The euro found some terra firma and has rallied back above the 1.18 figure…  I understand that this rally has been fueled by hedging trades ahead of next week’s European Central Bank (ECB) meeting…  Recall, that ECB President, Draghi, told us that he was prepared to give the details of the ECB’s unwinding of their balance sheet on the 10/24?  Well, that’s the day, and I’m sure the markets will hold Draghi’s feet to the fire on this one…    

Pound sterling has been on a roller coaster ride recently… Rallying on the Bank of England (BOE) news that a rate hike was in the future, and then selling off when the data doesn’t support that thought. We had more of that this morning when Sept. Retail Sales in the U.K.. only gained 1.2% when 2.1% growth was expected, and was the result of August’s print. 

Gold got sold some more yesterday to the tune of $4.30…  But… we may have a turnaround today, with Gold up $4.50 in the early morning trading!  In the 5 Minute Forecast (www.agorafinancial) , James Rickards was giving his thoughts on why Gold was ready to go on a long strong bull run, and he quoted Commodities expert, Jim Rogers…  Let’s listen in…  “Rogers makes the point that no commodity ever goes from a secular bottom to top without a 50% retracement along the way.
Gold bottomed at $255 per ounce in August 1999. From there, it turned decisively higher and rose 650% until it peaked near $1,900 in September 2011.

So gold rose $1,643 per ounce from August 1999 to September 2011.
A 50% retracement of that rally would take $821 per ounce off the price, putting gold at $1,077 when the retracement finished. That’s almost exactly where gold ended up on Nov. 27, 2015 ($1,058 per ounce).
This means the 50% retracement is behind us and gold is set for new all-time highs in the years ahead.” – James Rickards     

I agree with him, and have said that Gold was ready for a long bull run for sometime now…  And this period of Gold selling is only making it better for all the Gold buyers that want to buy at cheaper prices, but I wouldn’t procrastinate here… these cheaper levels might not be around too much longer! Of course that’s my opinion, and I could be wrong…  

With this being a “Pfennig-lite” today, it’s time to move on and finish this!  So… To recap…   New Zealand may have a new coalition gov’t. and that has sent kiwi to the woodshed overnight. Chuck believes it has been oversold, but we’ll have to wait-n-see.  The euro is on terra firma this morning as hedging ahead of the ECB’s meeting next week, has the single unit trading over the 1.18 figure again this morning.  

Before I head to the Big Finish today…I was doing some reading yesterday, and I had my radio playing 60’s on 6 on Sirius XM, and the old song by Glen Campbell came on. The Wichita Lineman… And in that song is a phrase that could possibly be the most romantic phrase ever used in a song. I’ll let you be the judge… He says, “ And I need you more than want you… And I want you for all time”… That line always gets to me right in the heart… And there you go, I’m be teddy bear at heart…  

For What It’s Worth….  Last night I saw an article about Blue Apron cutting 6% of their work force, and then this morning I see where General Electric is cutting their workforce too… It’s starting to happen folks, the tell-tale signs of an economy about to come to a halt… Well, the GE article is here should you want to read about it: http://www.foxbusiness.com/features/2017/10/18/ges-new-chief-starts-making-cuts-starting-with-old-favorites.html  

Or,  here’s your snippet: “Next month, Mr. Flannery is expected to unveil the results of a strategic review that includes thousands of corporate-level job cuts and scaling back of GE’s global structure, people familiar with the matter said.

The new CEO is shutting down research centers in Shanghai, Munich and Rio de Janeiro, shifting some of their engineering work into individual business units, the people said. The retrenchment will leave GE, which spent more than $5 billion on research and development last year, with just two global research sites, located in Niskayuna, N.Y., and Bangalore, India.

Asked about the looming changes, the GE spokeswoman said: “The company will continue to have an intense focus on our global operations and customer base,” noting that the company gets 70% of its revenue from outside the U.S.

The company is expected to report quarterly results on Friday that include hefty restructuring charges related to the changes, according to analysts.”   

Chuck again… I read yesterday that former CEO of GE Immelt, used to have a spare (empty except for pilot of course) jet follow him when he would jet to a destination…  Now, that’s overkill, eh?   

Currencies today 10/19/17… American Style: A$ .7866, kiwi .7033, C$ .8025, euro 1.1825, sterling 1.3158, Swiss $ .9763, … European Style: rand 13.5110, krone 7.9471, SEK 8.1394, forint 260.84, zloty 3.58, koruna 21.7286, RUB 57.32, yen 112.56, sing 1.3568, HKD 7.8015, INR 65.02, China 6.6220, peso 18.79, BRL 3.1625, Dollar Index 93.19, Oil $51.29, 10yr 2.32%, Silver $17.08, Platinum $928.38, Palladium $962.25, and Gold… $1,287.25   

That’s it for today…  I’m getting psyched up for my visit to the oncologist today… She’s a great doctor, and always tries to remind me of how strong I am as a person, which is right before I head to the infusion center and reality comes back to me..  5 solo home runs, and the score was 3-2 in favor of the Cubs last night… I don’t know that I’ve ever seen a game with 5 solo home runs accounting for all the runs in the game! But I have now! I was really impressed with how our Blues played last night, and thought, man would it be great if they could bottle this and let it out for every game?  Yeah, and winter doesn’t follow fall! HA!  Oh well, The Blues have played 6 games so far, 74 more to go before the playoffs next spring!  The Alan Parsons Project takes us to the  finish line today with their song: I Wouldn’t Want To Be Like You…  And with that, it’s time to get out of your hair today, and send you out to makes this a Tub Thumpin’ Thursday!  And remember to Be Good To Yourself! 

Rocktober 18, 2017

* Gold gets taken below its 50 MDA

* Chuck want’s to know why?

* Chuck has idea for scandalous corporations.. 

 

Good Day… And a Wonderful Wednesday to you! I woke up this morning, and my mind immediately thought it was Thursday, and I needed to get going because I have an infusion appointment right out of the starters blocks on Thursday. Then I realized it was Wednesday, not Thursday, and I said, “Chuck you dolt, it’s only Wednesday”…  And so, I start my day… Makes me wonder what else I’ll “get wrong” today..  The Chi-Lites greet me this morning with their song: Oh, Girl…    

Front and Center this morning, “the boys in the band” have taken Gold below its 50-day moving avg. There were more than 300,000 contracts traded yesterday, and once there was some slippage in the early morning trading yesterday, “the boys in the band” (TBITB)  decided to pile on and point to the slippage in the currencies and the rise in the Dollar Index as their reason for all the short paper trades… And Gold is not faring well this morning with the early morning trading pushing Gold lower by $4.  

Yesterday’s damage to the shiny metal’s price was $9.70… What? have all the geopolitical tensions gone away? I don’t think so! And is the Fed really going to hike rates in December?  I don’t think so!  So, tell me, tell me true, what’s behind this assault on Gold all about Alfie? Well, I could give you my conspiracy theory answer, but if I did, you would probably think that I’ve lost it… So, I won’t, that is, unless you want me to….  Oh? You say, you want to hear it?  OK, hold onto your hats… And for those of you not into conspiracy theories, then skip ahead, go ahead, my feelings won’t get hurt!  

OK, for those of you who wanted the conspiracy theory it goes like this…  First of all, you must recall the “big price reset” thought that James Rickards has for Gold… And then think about all those short positions out thee in Gold. More than 90 days of production it would take to equal the short positions on the books..  So, what’s the only way the institutions behind all those short positions are going to make money?  That’s right, if the price of Gold continues to drop, but what happens to all those short positions if the “big price reset” happens tonight or tomorrow or next week? Those institutions take HUGE losses…  So, in my mind, these short Gold paper traders are rushing to push the price of Gold lower so they can close out their short positions, and get ready for the “big price reset”…  Sound corny? Well, it’s how I see things going on right now, right or wrong, it’s how I see it!     

Alrighty then, it’s OK, it’s safe now, you can come out and play again, I’m finished with that!  Well, as I mentioned briefly above, the Dollar Index saw some love yesterday, as the talk about a rate hike in December increased in volume… I just don’t see it happening like that folks… I don’t see the Fed hiking rates in December, and IF they would, it would be a last ditch effort by the outgoing Fed Chair, Janet Yellen, to everything she can to put 100 miles of desert between her and the zero interest rates policy that held court for quite a few years here…  And IF she did hike rates in December, which I still don’t believe she will, that rate hike would be quickly reversed at the next meeting. 

That’s my story, and I’m sticking to it! And I really dislike having to rinse and repeat myself so much on interest rates, but when the newswires are full to the brim with articles about the Fed hiking rates in December, I just get all worked up…  So, the dollar is in charge this morning, and is still feeling its oats as the strong dollar trend has basically ended, but no one told some dollar traders… HA!   Seriously though, when a currency trend ends, you’ll still have days when the asset on its way out, has good days… And don’t forget that a star burns the brightest right before it goes dark…   

I read an article last night about how far the Chinese and Russians had gone with convergence, and then I came across this bit of information from the Russiafeed.com site… “The trade turnover between Russia and China in the first eight months of 2017 grew by 35.2 percent and had exceeded $54 billion, the figures of Russia’s Federal Customs Service showed on Thursday.”  WOW!   It was also announced yesterday, that China has developed a payment system (PVP) for trade between the two countries, that will remove the need for any dollars to be involved…

These two countries are hell bent and whiskey bound to de-dollarize the world. See what happens when you tick off other counties? The can’t match our military strength, but they can go after the use of the dollar around the world, and that’s what they are doing…  Shoot Rudy, as long ago as 7 years ago, I was doing presentations and showing audiences a quote from the Chinese President, about how the dollar standard needed to be changed…  

I’ve said this before, but allow me to repeat it… The Chinese don’t say things that they don’t mean. And, if they do say something, you can bet your bottom dollar that they will do everything they can to achieve or meet that statement.  So, 7 years ago, the Chinese were telling the world, that the dollar standard needed to be changed, and no one was listening, except me, of course!  And people used to think I was crazy, and so on..  Well, who’s crazy now? 

And what’s the U.S. doing about it? The only thing I see that they are doing about it, is making things worse, with their debt build up, and the prospects for more debt to come.  On a side bar, I had to laugh out loud yesterday when reading the paper and seeing that Wells Fargo was going to have to pay $3.4 million to customers to settle a regulator’s claims that brokers recommended certain investment products they did not fully understand.   Really? $3.4 Million, that’s all?  OK, I’m going to get on my soapbox here so if that’s not your bag baby, then skip ahead…  

So, do you believe in your heart of hearts that the bank made more in fees than $3.4 million?  Then why on earth would they not have to give back all the fees they made when a court finds them guilty of wrongdoing? I can tell you that until an institution has to give back all its gains made in something that is ruled to be unlawful, or in bad ethics, etc. then this stuff will continue, and we’ll be reading about some other institution doing something to harm investors and depositors… 

Boy,  today started out slow, but the crescendo was building, and then BAM! Chuck shows his true colors about these so-called refunds for damages…    

The U.S. Data Cupboard was as expected yesterday, with Industrial Production turning around August’s negative print, and printing a 0.3% gain in September. Capacity Utilization ticked up to 76 from 75.8% nothing to write home about..  And now we sit and wait for additional real economic data to print… Until that day, we’ll see some Housing data today and Friday, and Leading Indicators, and that’s about it for data this week…  

Oh, one more thing on Gold before I go today… Apparently Lola (Goldman Sachs) likes Gold more than Bitcoin..  Lola issued a statement yesterday, and here it is… “Precious metals remain a relevant asset class in modern portfolios, despite their lack of yield,” analysts including Jeffrey Currie and Michael Hinds wrote. “They are neither a historic accident or a relic.” Looking at properties such as durability and intrinsic value, they are still relevant even with new materials discovered and new assets emerging, such as cryptocurrencies.”   

So, Lola likes Gold… Interesting isn’t it? I would say that this tells us that Lola is long Gold, and doesn’t like seeing investors swap out of Gold for Bitcoins..  But then If I said that, it would mean that I know something about Lola that everyone else doesn’t, and I don’t!  Just to make that clear!   

To recap…  The Dollar is in charge, but as Chuck reminds us, a star burns brightest before it goes dark…  Gold got whacked again yesterday, and taken below its 50 day moving avg. Chuck wants to know what has changed, with what’s going on around the world to cause this selloff of Gold? Lola likes Gold more than Bitcoin…  Tells you something doesn’t it?   

For What It’s Worth… This is interest in that it’s something that I’ve wanted to see for years, and now that it’s available the CIA doesn’t want POTUS to release it… I’m talking about the Kennedy assassination papers…  And it can be found here:  http://theduran.com/cia-urges-potus-trump-to-delay-release-of-3000-never-before-seen-documents-on-assassination-of-john-f-kennedy/     

Or, here’s your snippet: “More than 3,000 never-before-seen documents from the FBI, CIA, and Justice Department are set to be released, along with 30,000 that have only been partially released in the past. The document dump “will simply fuel a new generation of conspiracy theories,” write Philip Shenon and Larry J. Sabato.

Sabato is the director of the University of Virginia Center for Politics and author of “The Kennedy Half-Century” and Shenon is a former reporter for The New York Times and author of, “A Cruel and Shocking Act: The Secret History of the Kennedy Assassination.”

The CIA is urging President Donald Trump to delay disclosing some of the files for another 25 years according to friend and political adviser Roger Stone but the National Archives would not say whether any agencies have appealed the release of the documents.

According to The Gateway Pundit Roger Stone and Gerald Posner, two New York Times bestselling authors who are polar opposites about who killed JFK, have joined together to urge Donald Trump to release all the remaining classified files on Kennedy’s assassination.”  

Chuck again…. I was 8 when Kennedy was assassinated, and I still remember that day like it happened yesterday, and for years I, of course, would have a different take on how it all happened, and who was behind it all, so I’m hoping these papers get released soon!  

Currencies today 10/18/17… American Style: A$ .7829, kiwi .7133, C$ .7985, euro 1.1750, sterling 1.3175, Swiss $ .9812, … European Style: rand 13.4910, krone 7.9525, SEK 8.1634, forint 262.33, zloty 3.60, koruna 21.8911, RUB 57.31, yen 112.70, sing 1.3580, HKD 7.8074, INR 65.12, China 6.6146, peso 18.79, BRL 3.1686, Dollar Index 93.67, Oil $52.10, 10-year 2.32%, Silver $16.98, Platinum $923.85, Palladium $979.73, and Gold… $1,282.30  

That’s it for today…  The Baseball games last night were good, and I say that even though the Yankees won their game! The ALCS is tied 2-2, and the NLCS is 3-0 in favor of the Dodgers.. Our Blues come back home after a 4 game road trip to play the rival Blackhawks tonight… Let’s Go Blues! This is the last “full to the brim” Pfennig of the week, as tomorrow’s will be a “lite” version, and then no Pfennig on Friday…  It’s Homecoming Week at Mizzou this week… We used to make a weekend out of Homecoming, but not any longer…  I was talking to a friend last week and he said, he hadn’t flown is Mizzou flag this year since they were so bad, and I said… I’ve flown mine every Saturday!  My team may be bad, but their my team…   Ok…  Steely Dan takes us to the finish line today with their song: My Old School… Is there gas in the car, yes there’s gas in the car…  Love it!    I hope you have a Wonderful Wednesday… And Be Good To Yourself! 

 

 

Rocktober 17, 2017   

* Dollar gets boost and takes off!

* NAFTA talks hurt loonies and pesos… 

* Gold gets taken to the woodshed!

 

Good day…And a Tom Terrific Tuesday to you! I could write a book and title it: Sleepless in St. Louis…  But, I won’t…  About 10 years ago, a representative of a book publishing company contacted me and wanted me to write a book about trading currencies. I wanted it to be more about my survival from cancer… We never agreed, and after about a year of asking me, she finally gave up…  The closest I ever got to writing a book, was writing the forward for a book! The Second edition of Addison Wiggin’s book: Demise of the Dollar…  Check it out on Amazon, it’s pretty cool… The late great George Harrison greets me this morning with a live version of his song: While My Guitar Gently Weeps, which was recorded at Madison Square Garden back in the day…    

Well, the currencies saw a choppy day yesterday. The euro traded up and through the 1.18 level, and then back below it, and then did a rinse and repeat. And the other currencies followed the Big Dog.  But then late in the day and throughout the overnight markets the dollar has been the focus of traders and here’s the skinny on why that is as I know it to be… 

Late yesterday afternoon, the President, met with John Taylor, an economist, for the Fed Chairman job, and is thought to have impressed the President, so much so, that the markets have already thrown the front runner for the job, Kevin Warsh, to the side of the road…  Taylor is thought to be much more hawkish than the present crew at the helm of the Fed.  

But there’s a problem here Houston..  A Hawk in Charge, when Trump is so dovish? That just doesn’t make any sense to me, given that Trump has the open roster of candidates to fill the job…   Oh well, whatever it will be, it will be, right?    Oh, and before I go on with the reasons for the dollar strength this morning, I just wanted to mention that current Fed Chair, Janet Yellen is going to meet with Trump on Thursday this week… 

I wonder what that’s all about? Is it to let her know that he’s going to name a new Fed Chairman soon and she should step down? Or is it to let her know that he’s not a fan of a rate hike at this point, and request that the rate hike be delayed?  Or something else? Man, to be a fly on the wall, eh?  

OK, back to the dollar strength. The other thing helping the dollar this morning is the news that U.S. and N. Korean diplomats will meet next week in Moscow, thus giving hope to the idea that a diplomatic resolution can be ironed out, without any bombs flying around… This news especially was bad for Gold, which has lost over $11 in the early morning trading today. 

So, just like that, we go from “all options are open” to “everything will be right on the night”?  Now, don’t get me wrong, I do prefer the latter scenario, but I just don’t see how we got there in what seems like the flicking of a light switch. It’s all a little surreal to me, and that has my spider sense going bananas this morning… 

And in other news overnight, reports are that the U.S. has come out in the NAFTA negotiations as the aggressors, and that has put the Canadian dollar/ loonie, and the Mexican peso on their back feet this morning…  I read about this scenario this morning, and it was like the proverbial V-8 head slap moment for me…  I had wondered the other day when the Mexican peso traded back above the 19 handle, what could be the cause of this move, but was too busy at the time to deal with the peso, which is not a fave currency of mine.  And then BAM, there it was right before me! NAFTA talks!   

Well, where were you 30 years ago? October 19, 1987, Black Monday…  That’s the storyline of my Dow Theory Letters (www.dowtheoryletters.com) article this week. I just put the finishing touches on it yesterday afternoon, and so, it’s still on my mind, and thus I’m talking about it now! HA!  But seriously, think about it, where were you when you heard the stock market was crashing? I know where I was, and it was in the trading office of the old Mark Twain Bank Brokerage, helping with order entry…  I just shake my head in disbelief at those out there that think that can’t happen again…   Hmmm…  

Of course we did see other stock market problems in 2001 and 2008, but not a one-day drop of 508 points, or 22.6%,  Which is still the largest one-day drop in Wall Street history…  Oh well, so much for that, but that’s really a relatively long time, folks, 3o years, or 3 decades…  

Things in Spain / Catalonia aren’t getting any better, as a Spanish judge ruled that two of the Catalonia leaders of the independence movement be put in jail on sedition charges. Did someone forget to tell the Spanish judge that the two entities are trying to negotiate an agreement right now, and doing something like this would damage those diplomatic negotiations?   

And back to Gold for a minute…  A couple of weeks ago, I wrote about the news that China was introducing an Oil future that would be tied to Gold. This was HUGE news as far as I was concerned… But now, Gold researcher, extraordinaire, Kook Jansen, is saying that there will no such thing… Let’s listen it to Koos as he explains his position on this… “China hasn’t announced anything but an oil-yuan futures contract. Gold has nothing to do with it.”   Koos Jansen then goes on to explain how you can purchase Gold on the Shanghai Gold Exchange (SGE) with renminbi/ yuan so Oil producers could just take the renminbi they just received for the sale of their Oil and buy Gold at the SGE with it…   

You may recall me telling you over a year ago, that that exact scenario is what the Russians were doing with the renminbi they were receiving from the sale of their Oil to China.   If Koos is correct, and I have no reason to believe he isn’t correct, then it’s still all good for renminbi, and bad for the dollar… It’s just as good for Gold..   

And speaking of China the news came out yesterday that China is interested in obtaining a 5% stake in Saudi Aramco Oil through a direct investment… Hmmm…  Remember when China was going to buy the California Oil company and the media went bonkers?  Yes, let’s go back to 2005… Chinese oil company Cnooc Ltd. withdrew its $18.5 billion takeover bid for California energy firm Unocal Corp., saying it would have increased its offer had the resistance not been so strong….   12 years ago folks…    

Today’s U.S. Data Cupboard has two pieces of real economic data for us to see today. Industrial Production (IP) and Capacity Utilization (CAPU) will print this morning for September…  IP could come out of the red when it prints today, but that’s not saying much, and CAPU should remain steady Eddie. The current Home Builders Index will print this morning too, but it will take a back seat to the two real pieces of economic data…  

To recap…  After a mostly choppy day of trading yesterday, the news that a new leader for the Fed Chairman job, who is considered to be a hawk, came out, and the dollar took off for higher ground. That news and the news that the U.S. is the aggressor in the new NAFTA talks, sent Gold to the woodshed, and the other metals followed. Koos Jansen says there’s no such thing as a Gold backed Oil future..  But it’s all the same for the dollar…   

For What It’s Worth…  This is an interesting read on Gold, and I thought it to be FWIW worthy, since Ed Steer highlighted it in his letter!  And it can be found here: http://tocqueville.com/tocqueville-gold-strategy-third-quarter-2017-investor-letter/  

Or, here’s your snippet:” Gold appears to have formed a solid base since bottoming at year-end 2015 at $1060.00/oz. Through 9/29/17, the metal’s price increased 11.10%, even after a sharp pullback from its early September 2017 high of $1355. As of September 30, 2017, the price stood at $1280.15, 20.75% above its low at year-end 2015.

In our view, gold and the precious-metals complex is in the early stages of a dynamic up cycle that will match or exceed the run from 2000 to 2011. Downside appears limited; the greatest challenge for investors will be to muster the necessary patience to hang on until the up-cycle becomes more assertive and evident.

Despite the four-year correction from $1,900/oz. to $1,060 at year-end 2015, gold has outperformed stocks and bonds since 2000, the dawn of radical monetary practices by the world’s central banks. We have shown the chart below in previous letters, and repeat it again here only to emphasize this under-recognized fact.

What we also know is that gold production is peaking out, and is likely to decline over the intermediate term even if gold prices rise substantially. Should investor demand reawaken, there is very little slack in supply to absorb it. The depletion of gold inventories in London and other Western vaults – a result of demand in Asia – is a finite process with measurable limits. There are many signs that those limits are being reached.

Finally, we know that the fiscal position of Western democracies is perilous and worsening. History teaches that resolution of fiscal impasses most often results in monetary debasement, which has invariably led to a rise in the nominal value and purchasing power of liquid assets that cannot be debased. Gold and silver constitute a short list of non-financial assets with monetary characteristics.”

Chuck again…  As I said above this is a good article/ read, and it goes on to talk about fundamentals and everything else a Gold buyer or holder should know…   

Currencies today 10/17/17… American Style: A$ .7855, kiwi .7183, C$ .7977, euro 1.1760, sterling 1.3255, Swiss $ .9773, … European Style: rand 13.3718, krone 7.9287, SEK 8.1412, forint 261.68, zloty 3.5983, koruna 21.9121, RUB 57.22, yen 112.15, sing 1.3560, HKD 7.8075, INR 64.94, China 6.5894, peso 19.05, BRL 3.1548, Dollar Index 93.45, Oil $52.16, 10year 2.31%, Silver $17.14, Platinum $930.77, Palladium $985.43, and Gold… $1,291.40    

That’s it for today…  Hmmm… Well, at least Baseball gets going again tonight! It’s been a long morning already for me… UGH! But I don’t have to go into an office, so I have that going for me! HA!  At one point on Saturday night, I actually thought my beloved Mizzou Tigers could hang with the #3 Georgia Bulldogs, as the game was tied 21-21… But then the trap door, that’s always there for my Tigers, sprung, and soon it was a blowout for Georgia… UGH!  And our Blues lost on Saturday night too. The only redeeming things, sports-wise, was that the Astros and Dodgers won their games that night! The Moody Blues take us to the finish line today with their song: Isn’t Life Strange, from the Seventh Sojourn album, one of my faves!  OK, I’ve gone on long enough today, it’s time to go! I hope you have a Tom Terrific Tuesday, and Be Good To Yourself! 

 

 

 

Rocktober 16, 2017  

 *  U.S. Data Fails To Meet Expectations!

*   Platinum soars!

*   Slow Data Week…

 

Good Day… And a Marvelous Monday to you… Talk about a roller coaster ride on the weather this past weekend! Saturday was sunny and very warm, and yesterday the trap door was sprung on the warmth! But pretty days, and nothing to complain about! My stomach has been performing calisthenics most of the night, so I wasn’t sure I would answer the bell this morning, but look at me here, bright eyed and bushy tailed!  HA! As If! But I’m here so, let’s get to work! Big Head Todd, and the Monsters greet me this morning with their song: Bittersweet    

Well, all the premarket hub-bub on Friday was about just how strong Retail Sales would be… And strong they were, but not as strong as forecast, and soon after the print, the markets’ collective focus switched to the stupid CPI (consumer inflation), which had missed expectations for 4 of the last 5 months, and September’s print made it 5 of the last 6 months…  

The dollar wasn’t able to run to higher ground with abandon like I was suspecting it would given all the pre-print talk about how strong Retail Sales would be. The currencies held their ground, with little slippage as the day went along on Friday. However, in the overnight markets last night the dollar as been bought VS the euro, as the main currency pair in the trading pit… I read one headline on Bloomberg this morning , that cracked me up, here goes: “Dollar recovers as Mexican peso loses ground”…  As if the dollar was recovering because the peso was losing ground! 

Yes, the peso was losing ground, having lost the 18 handle and is now trading with a shiny 19 handle, but what I’m trying to express here is that the dollar’s moves are not dictated by what the peso does! I checked the currencies last night, and saw the euro slip, sliding away through the 1.18 handle, and I said to myself at that time, it looks like the euro is going to lose the 1.18 figure again…  And sure as the sun is warm in the summer here, the euro did fall below 1.18 as I turned on the currency screen this morning. The mess in Catalonia, Spain, continues to heat up, with negotiations not seeming to be going anywhere. And as long as this continues it will weigh heavily on the euro.   

The Petrol Currencies all seem to be on board the rally train this morning, with some getting the good seats!  The Russian ruble, Norwegian krone, and Brazilian real go the good seats, while the Canadian dollar/ loonie had to settle back in coach. There was no news from the talks between China and Saudi Arabia that I’m aware of at this point. And I really didn’t think that they would come out of the meeting rooms with their arms around each other, waving to the crowd with their free arms, and announce that they had reached an agreement to swap currencies for Oil.  Because that would send the currency market into a tizzy… No, rather I think they might begin doing with stealth-like, and just start trading Oil using their own currencies and not dollars, and let the markets gradually catch on. 

Have you been keeping tabs on Palladium’s rise in price? First it closed in on Platinum and then it overtook it, leaving Platinum in its wake. The Palladium closed in on $1,000 oz. and on Friday, it overtook the $1,000 handle! Palladium’s rise this year has been something for the ages… And now I have to add Palladium to my worry list about metals that get attention from “the boys in the band”

I’ve told you this before, so… I’ll tell you again!  Ed Steer’s Saturday letter (www.edsteergoldandsilver.com) contains a graph of the number of days of production it would take to match the short positions on each metal…  For instance Silver has a number of 195 days of production it would take to match the short positions in the metal.  And believe it or don’t, but both Platinum and Palladium have larger numbers than Gold!  Platinum’s number is 100, Palladium’s is 95 and Gold’s is 90…  I don’t know about you, but knowing these numbers gives me a strong idea of how much the metals have to fight to gain ground, which makes Palladium’s run this year even that more impressive!   

So, what was the deal with Retail Sales last Friday? Well, like I said above, it was strong, even if you took out the Auto Sales that were boosted by the new car sales from people that had their cars flooded.  But it wasn’t quite as strong as the expectations, and with economic data, it’s all about the expectations, folks…  So, for those of you keeping score at home, Sept. Retail Sales were up 1.8% (1.9% expected), 0.5% minus auto-sales (0.6% expected)…  But like I told you last week regarding GM’s announced plant shutdowns, this good Retail Sales print could be a one and done… 

Nothing is ever going to convince me that this is a sign of a strong and robust economy… And I think traders pretty much for the most part, were saying the same thing on Friday, as there was no conviction, after the print, to take the dollar higher… And the stupid CPI print pretty much made traders think that there is a chance that the Fed might pass on a rate hike in December. Of course if they just read the Pfennig, they would know that I don’t believe there is any chance of a rate hike in December! 

Well, Gold did climb back to $1,300 on Friday, and has added a few shekels to its value in the early morning trading today…  On Friday, Gold rallied to the tune of a $10.20 gain on the day to close at $1,303.30.  This morning, as I write, Gold is trading at $1,307.40…   287,000 contracts were traded in Gold on Friday… 

The BREXIT negotiations aren’t getting anywhere, and pound sterling is being held back because of these going nowhere negotiations… Any strength the pound has found has been from the talk about a rate hike coming soon from the Bank of England (BOE) and its Gov. Mark Carney… Pound traders, in my opinion, are wise to not take Carney seriously, about a rate hike, as they were fooled once before by talk of a rate hike that never materialized!  

Data-wise around the world today…  China saw stronger than expected Consumer and Wholesale inflation data for September.  The Eurozone Trade Deficit rose to $21.6 Billion in August from a previous $18.6 deficit in July, and late this afternoon, we’ll see the color of the latest CPI from New Zealand.  And that’s about it for our data viewing from around the world today, please remain in your seats until we’ve come to complete stop..   

The U.S. Data Cupboard won’t have much for us this week, except tomorrow when Industrial Production and Capacity Utilization for Sept. print… I expect Industrial Production to be negative again this month. Other than these two real pieces of economic data, there’s not much to see in the Data Cupboard this week…  I wonder what will move the currencies and metals this week, more saber rattling? I guess we’ll have to wake up each day to find out! Sounds like a Plan!  

To recap…  Retail Sales and CPI didn’t meet expectations on Friday, and even though both saw nice gains, the dollar couldn’t go hog wild.  But in the overnight markets last night, the dollar has been bought, bringing the euro back below 1.18 this morning. Gold added $10.20 on Friday to close back above $1,300, and Palladium has traded above $1,000 overnight!

Before I go to the Big Finish I wanted to point out that “real U.S. wages” fell 0.2% last month, marking the second consecutive month of losses in wages… I don’t see how we get ahead at this rate… 

For What it’s Worth…  I saw this article on zerohedge.com and thought it to be very FWIW worthy… it’s about how British Banks are calling for the biggest consumer collapse in 10 years, and can be found here: http://www.zerohedge.com/news/2017-10-13/british-banks-forecast-biggest-consumer-credit-collapse-10-years  

Or, here’s your snippet: “

As if Theresa May did not face enough challenges, the latest survey from The Bank of England (BoE) suggests the British consumer is about to face the biggest credit crunch since the great financial crisis.

After repeated warnings from BoE about the surging pace of lending to households, British lenders are planning the biggest cutback in consumer loans in nearly 10 year.

Earlier this year the BoE warned lenders may be dicing with a “spiral of complacency”, with car loans a particular area of worry, and now, as The New York Times reports, this latest survey signals the steepest contraction since the fourth quarter of 2008, when the economy was in the depths of its worst post-war recession.

Thursday’s survey figures showed Britain’s consumer economy is running out of steam, said Joanna Davies, economist at Fathom Consulting, the only forecaster in recent Reuters polls to predict a recession.

“We’re quite concerned about the consumer squeeze,” Davies said, citing falling wages in inflation adjusted terms and historically low household savings.

“If you add tightening credit conditions onto that, it doesn’t bode well.”

Pouring more cold water on Britain’s recovery hopes, after seven years of persisting with a forecast of rebounding productivity, the Office for Budget Responsibility (OBR) has [also] thrown in the towel.”

Chuck again… And Carney wants us to believe that he’s going to hike rates in the U.K.? He’s like the boy who cried wolf, but only he’s crying rate hikes…   

Currencies today 10/16/17… American Style: A$ .7872, kiwi .7188, C$ .80, euro 1.1793, sterling 1.3295, Swiss $ .9762, … European Style: rand 13.3370, krone 7.8995, SEK 8.13, forint 261.09, zloty 3.5995, koruna 21.8698, RUB 57.14, yen 111.82, sing 1.3520, HKD 7.8088, INR 64.79, China 6.5793, peso 19.01, BRL 3.1443, Dollar Index 93.22, 10year 2.29%, Silver $17.45, Platinum $944.83, Palladium $1,005.86, and Gold… $1,307.40…  

That’s it for today…  Well, it’s a “short-week” Pfennig-wise, since Thursday is an infusion day… Had a great day yesterday as we took a short road trip to Waterloo, Ill. to eat fried Chicken with friends, Gary, Barb, Toni and Duane. Maybe that’s what caused my stomach to dance a jig all night, as I probably ate more than I should have yesterday! What an exciting ninth inning of the NLCS last night with a walk off home run! Yesterday made my 5th consecutive week without the NFL..  My fantasy football team’s QB, broke his collarbone and is out for the year. So I guess I just made a donation again this year! UGH!  I think this song came up a month or so ago, but here it is again… The Stylistics take us to the finish line today with their song: Betcha By Golly Wow…   And with that, I hope you have a Marvelous Monday! And BE GOOD TO YOURSELF! 

Rocktober 13, 2017

* ECB announces date unwinding details

* Palladium takes flight!

* Ringing A Bell For Life! 

 

Good day… and a Happy Friday to one and all! I’m hoping this is going to be a very good Friday, so I’m going to go ahead and proclaim it to be a Fantastico Friday! I don’t have any major plans for the weekend, and maybe, just maybe that means something fun will pop up! I plan on seeing my friends this afternoon, so that’ll be the start! Man on man, I’ve got to tell you that listening to the cable news stations for a long period of time will drive you crazy! Well, at least it was driving me crazy yesterday, as Kathy’s mom was here and watching MSNBC continuously, and I was about to lose my mind listening to all the crap! Oh well, life goes on… Elton John greets me this morning with his song: Mona Lisas and Mad Hatters…

The currencies just couldn’t find any traction to move higher yesterday, but, didn’t give up their gains from the day before, so that’s a good thing… I do suspect though that today will be a day of Shouting from the rooftops, that all is well with the U.S. economy, after Sept. Retail Sales print. I talked to you about this print yesterday, and how it will be fueled by new car sales to replace all the flooded out cars from the hurricanes. And the markets won’t care that it’s probably a one and done, or maybe a two and done, if the car buying carries over to Rocktober… They’re going to shout it out loud that everything is fine, and they’re ready for the rate hike in December, which will have traders buying dollars,…

The writing is on the wall for the dollar, folks, but for now we have to deal with this dancing in the streets and all that… 

And getting back to the thought about car sales… Well, if we use just GM as the example, one would think that the car sales will not carry over to Rocktober, as GM announced plant shutdowns yesterday, in Detroit, no less! Apparently, GM has over 1 million cars sitting on dealer lots right now… That’s an inventory problem…  But as my dad taught me years ago… and this can be used in reverse here…  There’s no such thing as a “shortage” of something, it’s merely in need of a price adjustment. 

But, as we all know, Automakers don’t make much money on new cars… They make it on the financing… Using financing companies like: Dewey, Cheatum, and Howe…  So, to “adjust the prices” of the new cars sitting on the lots, would mean deep losses to the Automaker…  Hello, Houston… We seem to have a problem here…    

The  European Central Bank (ECB) announced this morning that they will present their plan for unwinding their balance sheet on Rocktober 26th…  And immediately, the rumors began to fly around about how large the bond buying cuts will be. I read one estimate that the ECB is considering cutting their bond buying in half in 2018…  Now that would be quite aggressive, and warranted in my view. But, we’ll have to wait until 10/26/17 for the details…  Let’s hope they are at least 1/2 as aggressive as the rumors!   

Germany and Italy printed their September CPI’s (consumer inflation) this morning and both saw inflation remain steady Eddie at  1.8% in the month… the euro has added a shekel or two to its price from yesterday morning on the inflation prints, but other than that, yesterday and the overnight markets have been a real dud…  Although, like I said above, I truly expect that all to change around 7:30 CT this morning.

I see where James Rickards decided to undercut my thoughts on China yesterday… As a reminder, yesterday I was talking about how China was in talks with Saudi Arabia to get the Saudis to agree to sell their Oil to China using Chinese renminbi…  A major blow to the U.S. and its Petrol dollar… Now, I didn’t say anything about the value of the renminbi increasing, and I do want to point out that a month or so ago, I did point out that the Chinese were allowing daily appreciations to the renminbi, and I threw out the thought that they were doing that in preparation of a devaluation of the renminbi..   OK, we’ve got those parameters set.. .let’s listen to what James Rickards had to say in the Daily Reckoning (www.dailyreckoning.com)

“Investors should soon brace for a financial earthquake from China that will reverberate around the world.

Based on far smaller yuan devaluations in August 2015 and December 2015, the repercussions of a new devaluation will not be confined to China. The U.S. stock market crashed over 10% on both prior occasions.

An even larger correction could be expected when the maxi-devaluation comes. A flight to quality in gold is another predictable result.” – James Rickards      

Rickards is basing his devaluation call on something that’s called the “impossible Trinity”, and it all makes sense to me. Check out the DR for a full explanation of the “impossible Trinity”..   

Gold had a “nothing day” only gaining $2 on the day, and for once the story in precious metals yesterday wasn’t about Gold. Instead it was about Palladium!  A couple of weeks ago, Palladium passed by Platinum (in price) and continues to amaze people following the metal, as yesterday Palladium was up $27 at one point, with the metal finally closing up $15 on the day, but that’s $12 off its intraday high!  Darn paper trades!   Oh well, Palladium is up another $7 in the early morning trading today, so another wild day for the metal could be in store!  

I’m hesitant to talk further about the currencies small gains this morning because of what I see on the horizon after Retail Sales prints this morning…  It’s time to batten down the hatches, or get to the storm cellar, and don’t peek to see if it’s all clear, I’ll let you know in the Pfennig on Monday if it’s all clear!  So, since today is all about the Data Cupboard, we might as well head there, eh?   

The U.S. Data Cupboard does have the aforementioned Retail Sales for Sept. today, and that should be quite the show this morning.. In addition we’ll see the stupid CPI (consumer inflation) that the markets sill pay attention to, but doesn’t mean I have to! And I can’t forget the Consumer Sentiment report which will also print this morning…  The Consumer Sentiment report is such a waste of time in my opinion…   

To recap… It’s all about the Data Cupboard today, with Sept. Retail Sales the main attraction, which Chuck has explained will be boosted by new car sales that are replacing the flooded out abandoned cars from the hurricanes. And then Chuck points out that GM has an inventory problem, so the car sales boost to Retail Sales may only last one month… Germany & Italy print 1.8% CPI’s, and the ECB announces the date they will give the details of their bond holdings unwind..   

Before we head to the Big Finish today, I wanted to highlight something that’s going on here in St. Louis…   A huge Billboard, along HWY 44 in the city, had a gigantic bell added to it, and every time a child with cancer goes through their final chemo treatment, they get to ring that bell!  Isn’t that a great way to honor these kids, who did nothing to their bodies, but were afflicted with this awful disease… I know what I’ve been through for 10 years, and can’t even imagine what they’ve been through in their young lives! So, Kudos to the people at Siteman for doing this, I just get all emotional thinking about a kid’s last chemo treatment day…  

For What It’s Worth… Well, thanks again to Ed Steer for highlighting this article in his daily letter (edsteergoldandsilver.com) today… I think this tells us something folks, so pay attention here..  this is about loan loss reserves increasing at major banks and can be found here: http://www.zerohedge.com/news/2017-10-12/worse-anticipated-jpm-citi-just-boosted-their-loan-loss-reserves-most-4-years  

Or, here’s your snippet: “Four months ago, when looking at the latest S&P/Experian data, we first reported that credit card defaults had surged the most since June 2013, a troubling development which ran fully counter to the narrative that the economy was recovering and the U.S. consumer’s balance sheet was improving.

The troubling deterioration prompted Moody’s to pen its own report titled “Spike in Charge-off Rates Indicates a Slide in Underwriting Standards” and as Moody’s analyst Warren Kornfelf wrote, the steep increase in credit card charge-off rates in 1Q’17 and 4Q’16 was the largest since 2009, and indicates that “strong underwriting standards in place since the financial crisis have deteriorated, potentially rapidly.”

Then, following JPM’s results earlier today, we showed that this concerning trend had persisted, with JPM reporting the second highest net credit card charge-offs in Q3 since the summer of 2013, and only a modest decline since the previous quarter.

It wasn’t just the charge offs however: there was another red flag in JPM’s results this morning in addition to the sharp 27% drop in the bank’s FICC revenues: with charge-offs spiking, it was only a matter of time before both JPM and its peers was forced to provision substantially greater credit losses ahead of potential pain in the future, and as we showed first thing this morning, JPM did just that when it hiked its credit loss provision from $1.2 billion in Q2 to $1.45 billion in Q3.”

Chuck again…  Doesn’t reading that just make you want to go count your Gold to make sure you have enough?   I’m not kidding here, when these major banks are increasing their loan loss reserves, they are doing it because they feel they have to, not because they want to!   

Currencies today 10/13/17… American Style: A$ .7845, kiwi .7148, C$ .8020, euro 1.1832, sterling 1.3265, Swiss $ .9745, … European Style: rand 13.3737, krone 7.8905, SEK 8.1036, forint 261.08, zloty 3.5991, koruna 21.8030, RUB 57.68, yen 112.08, sing 1.3542, HKD 7.8073, INR 64.93, China 6.5882, peso 18.91, BRL 3.1692, Dollar Index 93.07, Oil $51.52, 10year 2.32%, Silver $17.26, Platinum $938.46, Palladium $982.77, and Gold… $1,296.50   

That’s it for today…  Another devastating home field loss in the playoffs for the Washington Nationals last night… The St. Louis “kid” Max Scherzer tried to stop the bleeding but only made things worse, and a big rally stopped short and the Cubs move on to play the Dodgers. Our Blues 4-game win streak to start the season came to an abrupt halt last night in Florida… UGH!  My beloved Mizzou Tigers travel to play Georgia tomorrow night… Georgia is undefeated, and highly ranked, it would take a football miracle to upset them…  You know… today seems like it will be a good day, to have a good day…  The Rolling Stones take us to the finish line today with their song: Brown Sugar…  (Mom, he’s doing it again! HA!) That’s all for this week, I hope you have a Fantastico Friday! And Be Good To Yourself! 

 

 

Rocktober 12, 2017  

* Catalans opt for negotiations…

* FOMC Minutes lead to rate hike thought slippage

* 2010 revisited… 

  

 

Good Day…  And a Tub Thumpin’ Thursday to you! Well, I’ve had to restart my laptop twice already this morning, and lost all that I had written, so here I go again…  The baseballs gods weren’t nice to the Cleveland Indians yesterday, and the team that I thought would go all the way, is out. Now, I’ll switch my rooting for a team to the Houston Astros, who used to be in the National League, and were big rivals to the Cardinals…  Midnight Oil greets me this morning with their song: Beds Are Burning…    

Everyone, well everyone that cared about the euro, were holding their collective breath yesterday, when the Catalan President, was to give a speech about the independence for Catalonia… But, instead the President, Charles Puidgdemont, decided to suspend the independence and instead rely on negotiations with the Spanish leaders in Madrid. And with that news out of the way, the euro added to its gains yesterday as the day went on, trading all the way up to 1.1875, last night during the Asian session.

I wrote an article for the FX Street on the whole Catalonia affair, and it can be found here: https://www.fxstreet.com/analysis/time-for-divorce-between-catalonia-and-spain-201710100749

I really think that you should check it out, that is if you own euros, or have any interest in this whole “divorce” thing going on with Spain and Catalonia… But for now, they’re talking and not fighting… Spanish police have surrounded the Catalonian Parliament building in Barcelona.. These two are going to need some very good divorce lawyers, or it’s going to get really ugly there…  

But the news from Spain / Catalonia wasn’t the only thing boosting the euro yesterday. The Fed’s FOMC Meeting Minutes  (FMM) printed and left the markets thinking that there may be some slippage in the thought that a December rate hike is in the cards. There was some lively discussion regarding a disagreement among a few Fed members about whether the low inflation is a “temporary things” or “here to stay”… 

And that discussion got the markets thinking that maybe, just maybe, the Fed will opt to skip the rate hike in December, because of the lower inflation…  Of course, you dear reader, know that I’m of the opinion that there will be no December rate hike, that by then, the Fed will be discussion how to reverse their stance on “this is a strong and robust economy”…  

The Antipodean currencies of Australia and New Zealand were able to ratchet up a higher on the FMM disagreement, and that was good to see, given that these two have been mired in the muck for a few weeks now, with New Zealand going through negotiations for a coalition government, and Australia seeing a slower patch of data recently. 

The Petrol Currencies gained as a collective bunch overnight when the price of Oil didn’t seem to slip much after the most recent Oil supplies report showed that supplies were gaining once again. The Mexican peso was one Petrol Currency that was unable to participate in the rally though… 

When 2017 is all totaled up, the Mexican peso will probably be at or near the top of the best performers for the year. But let me point out that all of that performance came early in the year as it moved from a pre-election in the U.S. level of 25, to a post-election level of 18…  And has basically stayed around 18 the rest of the year. It was a case of sell the rumor, buy the fact…  And in this case it was sell the rumor that there was going to be a wall built and Mexico would pay for it, and after the election, those words had cold water thrown on them…     

Enough on the peso, I’m not a fan and doubt that I will ever be one! Gold saw another day of “running up toward $1,300, and then “the boys in the band” showing up and bringing the shiny metal back down”…  But Gold was able to hold on to some of its early day gains, and ended up $3.60 on the day, with 265,000 contracts traded in the metal.  Gold is up in the early morning trading today, and is currently trading at $1,296.70.. We’ll see how much of that early morning gain is still around once “the boys in the band” show up.  

One of my “fave countries”, Singapore will soon see their Central Bank meet.  For readers new to class, Singapore has a unit of the Central Bank called the Monetary Authority of Singapore (MAS), and its their job to monitor inflation and economic growth, and make adjustments to the trading band that the Singapore dollar (S$) traded in…  I don’t think the MAS will be making any major changes to the trading band at this meeting, as the economic data has been choppy in Singapore, and inflation is non-existent, which is where the Central Bank wants to see inflation stay!   

Singapore is one of the countries in the world that uses the S$ as their tool to keep inflation in check. If inflation begins to rise, the MAS will adjust their trading band, and the S$ will strengthen to combat the rising inflation. I like this method much better than most Central Banks, including the Fed Reserve, that use interest rate hikes to combat rising inflation.  

In 2008, I was writing for the Sovereign Society on the side, and the letter was called: The Currency Capitalist…  And I was the first to break the news that China was signing currency swap agreements with countries they traded with, to remove the dollar from the terms of the transaction.  Well, these agreements kept getting signed, and I kept telling people that when China breaks the Petrol dollar hold, that it would signal the end of the dollar as the reserve currency of the world…   

Well, guess who China is talking to now? That’s right Saudi Arabia… the country that Henry Kissinger talked into agreeing to sell their Oil only in dollars back in 1973. Well, the Saudis aren’t too happy with the U.S. these days, especially after the courts ruled that the lawsuits against their country could continue (we talked about that last year)..  And I’m afraid that they will soon announce that they are going to start selling their oil and use Chinese renminbi in the terms of the trade…  Uh-Oh! 

If that were to happen, it would be a “Houston we have a problem” scenario for the U.S. dollar..  And IF that were to happen it would begin to take the reserve currency status away from the dollar. And this is where I’ll remind everyone that in 2010… That’s right 7 years ago, I told anyone that would listen to me (yeah there are a few of you out there, right? )  that by the end of this decade the dollar would no longer be the reserve currency of the world.   In fact, for a year in 2010, I titled my presentations “A Change In The Currency Regime”…   

OK, Chuck, we got the message, you said 7 years ago that IF China got the OPEC nations to agree to the currency swap agreements that it would be one of the last nail’s in the dollar’s reserve status coffin, you don’t have to drag it out and keep reminding us! HA!  

Of course, the negotiations between China and Saudi Arabia, could end up with no changes, there’s always the chance of that… But as I tell people all the time when they ask me about chances… I say they are “slim and none and Slim left town”…   

The U.S. Data Cupboard is still restocking today… We did have the FOMC Meeting Minutes yesterday, but today we’ll see the Weekly jobless claims and Sept. PPI, (wholesale inflation)…  The experts are calling for an increase in PPI of 0.4%, which would be strong move in the month. 

Tomorrow’s Data Cupboard has Sept. Retail Sales, which I’m afraid I’m going to get a bad reading from the BHI (Butler household index) because I do believe that Retail Sales will be fueled by auto sales.. Remember when I told you about all the flooded cars from the hurricanes, and new car purchase would be getting made? Well, here we go!  I saw on TV the other night, a large field filled with over 30,000 previously flooded cars that were abandoned…   Can you imagine showing up there and attempting to find your car?  So, just leave it, and buy a new one, and that’s going to fuel Retail Sales tomorrow…   

To recap…  The euro received a boost from two areas yesterday, first it was Catalonia opting for negotiations instead of a call for independence, and 2nd was the Fed’s FOCM Meeting Minutes, which had the markets thinking that there could be some slippage now in the Fed’s December rate hike…  The Antipodean currencies saw this and rallied, and the Petrol Currencies rallied when the price of Oil didn’t slide much on new supplies data…   

For What it’s Worth…  Since I spent some time on this subject this morning I thought the FWIW piece would be a good place to continue the discussion regarding Saudi Arabia and China. This link was sent to me from long time reader, Bob, and can be found here: https://www.cnbc.com/2017/10/11/china-will-compel-saudi-arabia-to-trade-oil-in-yuan–and-thats-going-to-affect-the-us-dollar.html   

Or, here’s your snippet: “China will “compel” Saudi Arabia to trade oil in yuan and, when this happens, the rest of the oil market will follow suit and abandon the U.S. dollar as the world’s reserve currency, a leading economist told CNBC on Monday.

Carl Weinberg, chief economist and managing director at High Frequency Economics, said Beijing stands to become the most dominant global player in oil demand since China usurped the U.S. as the “biggest oil importer on the planet.”

Saudi Arabia has “to pay attention to this because even as much as one or two years from now, Chinese demand will dwarf U.S. demand,” Weinberg said.

“I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it — as the Chinese will compel them to do — then the rest of the oil market will move along with them.””   

Chuck again…  Currency diversifiers will be slapping themselves on the back for going this route when this deal between Saudi Arabia and China gets finalized… And that’s all I’m saying about that!  

Currencies today 10/12/17… American Style: A$ .7820, kiwi .7112, C$ .8020, euro 1.1855, sterling 1.3224, Swiss $ .9747, … European Style: rand 13.4849, krone 7.9070, SEK 8.0930, forint 260.79, zloty 3.6020, koruna 21.8161, RUB 57.84, yen 112.39, sing 1.3543, HKD 7.8077, INR 65.15, China 6.5859, peso 18.71, BRL 3.1722, Dollar Index 93.02, Oil $50.85, 10-year 2.34%, Silver $17.23, Platinum $934.19, $Palladium $967.89, and Gold… $1,296.70   

That’s it for today… With all the shenanigans with the restarts this morning, I know this is late again… UGH!  Oh, well, better late than never, eh? I received an email from the Money Show people yesterday, asking me for an updated photo of me for their website. I responded and said, what for? I haven’t spoken at a Money Show event in 4 years! The explained that now that I wrote under the Aden Research Flag, and the Adens did speak at Money Shows, that they needed an updated photo…  I’ll get around to sending them one sometime down the line… I’m sure the one they have is good, and probably better than any newer one! HA!  Redbone takes us to the finish line today with their song: Come And Get Your Love…  The soundtrack from the first Guardians of the Galaxy has so many great 70’s songs on it, and this one is one of those!  OK, time to get out of your hair today, I hope you have a Tub Thumpin’ Thursday, and remember to BE Good To Yourself! 

 

Rocktober 11, 2017

* Saber Rattling ratchets up…

* Russia prints $1.2 Billion Surplus!

* Euro climbs back to 1.18!

 

Good day…  And a Wonderful Wednesday to you! I’m not ready for prime time today…  I can’t seem to fully wake up… I’ve tried eating something crunchy, which usually does the trick, and I’m even trying to drink a soda… UGH!   Maybe as I go along here something will click in! Jackson Browne greets me this morning with his song: Doctor My Eyes… 

Well the saber rattling is ratcheting up again… I was talking to my good friend Duane last night, and I was expressing my fear of all this saber rattling turning into something bad.  (Poor guy, was trying to watch the Blues hockey game and I’m carrying on about N. Korea, etc.)  The stock market doesn’t seem to be caught up in the saber rattling, as it continues to move higher and higher every day… I’m just going to say that this reminds me of something that my dad used to tell me all the time…  Trees don’t grow to the moon…  And that’s all I have to say about that!

I’m not even your last pick as someone on your stock jockey team… Even though the stock side of the business is where I began my career in investments…  Alrighty then, let’s get to what we do feel very confident talking about and that’s currencies, metals, economies and dolts! 

The currencies are still, for the most part, trading in the same clothes as yesterday and Monday. The euro however, has betting some love from traders, and yesterday I told you that it was knocking on the door to 1.18, and later in the morning, someone answered the door, and let the euro in, and the single unit is trading above 1.18 this morning. 

That darned price of Oil…  One day it appears to be ready to go for a ride on the slippery slope, and then along came John on his white horse, and the price of Oil jumps nearly $2 on the day.  However, it appears that the Norwegian krone is the lone ranger when it comes to Petrol Currencies that have responded favorably to the upward swing in the price of Oil. 

The Russian ruble is a trading just a bit stronger this morning, and the Brazilian real, who just last week, was putting together a nice stealth-like upward move, lost ground overnight. The Canadian dollar / loonie remained unchanged through it all. Hmmm… I wonder what’s going on with the loonie? Just last month, we saw the loonie trade well into the 82-cent handle, then settle back to the 81-cent handle. but in the last few weeks we’ve seen the loonie fall through 80-cents, and now it has settled in just below 80-cents…  Hmmm…  

I don’t know why journalists still go to this guy and think he has the answers…  I’m talking about economist, Paul Krugman. I read on the Bloomberg this morning that Krugman was asked about the probable Fed Chair replacement for Janet Yellen, Kevin Warsh, and Krug didn’t hold back his opinion which was that “He’s been wrong about everything”…   Krugman then went on to say, ” It’s kind of almost amazing, you could almost make money by taking whatever he thinks is going to happen, and betting the other way.”  

Well, as we used to say in the old South St. Louis neighborhood… “It takes one to know one!” And that’s all I’m going to say about Krugman’s opinion on Kevin Warsh…  Except to say that in MY opinion, now that Krugman has dissed Kevin Warsh, I’m all for Warsh gaining the Fed Chairmanship!   

Gold was on a roll yesterday and ready to move back to $1,300, trading all the way up to $1,296.70, but then seeing “the boys in the band” enter the markets and immediately flood the market with paper trades that were selling Gold short, and at the end of the day, Gold was able to hold onto $3.90 of its gains it had earlier in the session, to close at $1,287.50… 

This will eventually stop folks… And all those paper short trades will be thrown in the trash can.  When that will be is a guess that if you knew the answer to, you would become rich and be sitting on your own island with an umbrella drink! 

Moving along… As I don’t like to get stuck on any one subject too long, as it could make for a read that puts you to sleep! Which is what I just did, for a few minutes!  

Well, Bill Gross, the former Bond King, who now runs a bond fund at Janus, had some things to say about the Fed yesterday…  I guess his mother never taught him about how if you don’t have something nice to day about someone, don’t say anything at all!   On Monday this week, Gross said that,”financial markets are artificially compressed, in the process distorting  because of the U.S. Federal Reserve’s loose monetary policy.” And he wasn’t finished there, going on to say, “think we have fake markets.”   

OK, Bill, what do you propose we do about this problem? I really don’t like it when someone has something to say that makes sense, but then doesn’t offer up a remedy…   If he had said, I propose that we get rid of the Fed altogether and let the markets set the interest rates. I would have been all over that with a bunch of “atta boys!”   

Moving on…  there’s not much happening around the world data wise today..  But we did see a very good print in Russia this morning… The Russian Current Account for the 3rd QTR 2017 was a SURPLUS of $1.2 Billion. In 2016 for the same period the SURPLUS was 0.4 Billion.. So, a very nice print from Russia, and that along with the near $2 jump in the price of Oil should be good news for the ruble?  

The Fed’s Minutes from the last meeting will print this afternoon… This is the meeting where the Fed announced their plan to unwind their balance sheet of bonds. I’ll be looking for any Fed members that voted no to this idea…  And that’s it for the U.S. Data Cupboard today…  

To recap,,,, The saber rattling continues to ratchet up the volume scale, and has Chuck feeling very uneasy about what could happen… the currencies for the most part, are stuck in the mud, but the euro has found some loving from traders the last two days and is back above 1.18 this morning. Paul Krugman does a little of the “look who’s calling the kettle black” talk, and Chuck can’t hold back his dislike for this guy’s opinions!

For what It’s Worth… Hey! my template has been fixed, and I’m good to go with a FWIW story today… this one is about Kobe Steel’s problems after admitting they fudged the steel figures for cars, etc.  and can be found here:  http://www.zerohedge.com/news/2017-10-10/kobe-steel-collapses-37-after-admitting-falsifying-data-could-destroy-international-   

Or, here’s your snippet: “Japan’s third-biggest steel producer is in trouble. After admitting falsifying data about the quality of aluminum and copper it sold, shares in Kobe Steel have collapsed 37%, -20% limit down yesterday and another -17% at the open today following news that the falsification also involved iron powder product, in the biggest bloodbath the company has ever seen.

Bloomberg provides a quick Q&A:

1. What exactly did Kobe Steel falsify? — Data related to the products’ strength and durability. Kobe Steel says it discovered the falsification in inspections on goods shipped in the 12 months through August, affecting some 4 percent of shipments of aluminum and copper parts as well as castings and forgings. As yet, the company, which employs about 37,000 people, says there have been no reports of safety issues.

2. Was this a rogue event? — Hardly. The fabrication of figures was found at all four of Kobe Steel’s local aluminum plants in conduct the company described as “systematic.” For some items, the practice dated back some 10 years ago, according to executive vice president Naoto Umehara. Details have yet to emerge.

3. What do its customers say? — Here’s a taster. Toyota is “rapidly working to identify which vehicle models might be subject to this situation and what components were used,” according to spokesman Takashi Ogawa. “We recognize that this breach of compliance principles on the part of a supplier is a grave issue.” Toyota found the materials in question in hoods and doors, as did Honda Motor Co. Boeing, which gets some parts from Kobe Steel customer Subaru Corp., said there’s nothing to date that raises any safety concerns. Hitachi Ltd. said trains it has exported to the U.K. contained compromised metal as well as bullet trains in Japan. Mazda Motor Corp. also confirmed it uses aluminum from the company, while Suzuki Motor Corp. and Mitsubishi Motors Corp. all said they were checking whether their vehicles are affected.” 

Chuck again…  Corporate Scandals just keep mounting… Last year it was VW, this year its Kobe Steel, who’s next? because I’m certain that there is at least one Corporation with scandal written all over it, and just waiting for someone to call them out!   

Currencies today 10/11/17… American Style: A$ .7789, kiwi .7067, C$ .7990, euro 1.1816, sterling 1.3193, Swiss $ .9735, … European Style: rand 13.5728, krone 7.9295, SEK 8.0590, forint 262.12, zloty 3.6236, koruna 21.8870, RUB 58, yen 112.24, sing 1.3568, HKD 7.8056, INR 65.28, China 6.5861, peso 18.76, BRL 3.1802, Dollar Index 93.21, Oil $51.30, 10-year 2.35%, Silver $17.16, Platinum $928.70, Palladium $938.04, and Gold… $1,2791.04    

That’s it for today…  Well, I got through it! YAHOO! But I’m still yawning like I haven’t slept in days! Oh well, life goes on, Chuck…  How our Blues?  That’s now a 4 game winning streak to start the season after beating the Rangers in back-to-back games in NYC. Cubs / Nats got rained out yesterday, and Indians / Yankees play a game 5.. Good stuff!  Go Indians! Nazareth takes us to the finish line today with their song: Holiday…  don’t know that one? You would if you heard it! Momma momma please no more face lifts, I don’t know which one you is…  And with that it’s time to get this out the door, it’s late I know… sorry about that!  I hope you have a Wonderful Wednesday! And be Good To Yourself!

 

Rocktober 10, 2017

* Thinly traded markets yield no big winners.. 

* Gold has a good two day run going… 

* Political uncertainty in N.Z. is driving Chuck to drink! 

 

Good day… And a Tom Terrific Tuesday to you!  What a day yesterday for sports! 4 Playoff Baseball games, and a noon start hockey game! My head was spinning from all the channel changing! But I got through it, thank you for checking on me! HA! I don’t believe they fixed the problem with the website template yesterday, but the email is going out, so that’s a good thing, eh?  Steely Dan greets me this morning with their song: Rikki Don’t Lose That Number… We lost one of the great song writers and musicians in Walter Becker of Steely Dan last month… I wonder who Donald Fagen will find to fill in for Becker, or if he will even continue on with the Steely Dan legacy…   

Well, I told you yesterday that with the U.S. Banks closed for the Columbus Day Holiday, that we could see either a real doozy of a day, or a real dud… Well, we ended up with the latter of the two options, and so we traded in the same clothes all day yesterday, with Gold doing bucking the currencies trading slowdown, with a nice gain on the day.

But in the overnight markets, the euro has been the favorite currency of investors to buy, as it has gained about 1/2- cent overnight and is knocking on the door of 1.18 once again. And Gold has come along for the ride moving up nearly $9 in the early morning trading today.  I can’t say that the rest of the currencies are following the Big Dog at this point, but maybe they will as the day goes on.   The folks at FXStreet, who are still so kind to post my Pfennig to their site every day, asked me to give them some “Chuck thoughts” on the goings on in Catalonia, and their effects on the euro. 

I don’t want to spoil the soup here so I’ll just mention that overnight, the Catalonia President, said that he would prefer jail over remaining Spanish…  Those are some stinging words for the leaders in Madrid. But, as I said in my article for the FXStreet people, I believe the euro has already taken on some selling from this mess when it was first announced that Catalonia would hold a referendum… 

So… how was your Leif Erickson, I mean Columbus Day? I ask that, because with everything going on these days, I don’t know how I would have gotten through it all if I were still working… And so, having a day off thus making it a 3-day weekend would have been grand for me! But since I’m somewhat retired, it didn’t mean much to me, and I got to watch our Blues win a game in a shootout, which I don’t like! I’m old school hockey, where you aimed for a Gordie Howe hat trick, which was a goal, a fight, and an assist on a goal.   A tie on the road was a good as a win at home…  Oh well, the game moves on, leaving me in its dust!

So, Gold didn’t hold onto all of its early morning gains yesterday, but was able to book $7.50 of the early morning $9 gain. But that was under very light volume, as only 190,000 contracts traded yesterday. Today the boys and girls at the bullion banks that house “the boys in the band” will return to their desks, and see that Gold has gained $8.70 in the early morning trading, and inches closer to $1,300, as it trades at $1,293.70 as I write this morning. 

The price of Oil tried like the Dickens to get back above $50 yesterday, but failed in doing so, and this morning the Oil price sits just below $50…  Did you hear the news about Saudi Arabia’s call on Oil production? Yeah, the Saudi’s have decided to make even larger cuts to their production of Oil in an effort to help boost the price of Oil..   And once again, the definition of insanity is doing the same thing over and over again with a hope of achieving a different outcome…  

Hey! Wait a minute there, Chuck! That’s exactly what you were doing yesterday morning with the Pfennig template for the website! You just kept going to the piece you had written on Sunday for the Pfennig, and copying it, and then going to the Template and hitting “paste” with nothing happening…  OK, maybe that was bordering on insanity, but I eventually figured out it was not going to work and then went in another direction!   

On the data front today, I saw a very good, and strong Industrial Production print in the U.K. this morning, and that has helped pound sterling get up off the canvas and do a little rope-a-dope. Sweden is expected to print their latest CPI, which should show an increase of around 1%, and that would be a good figure for Sweden, who hasn’t seen consumer inflation in a month of Sundays. Sort of like Goldilocks’ search to find the “just right” porridge… That’s what Sweden is doing, trying to find the “just right” inflation rate… 

This political uncertainty in New Zealand is driving me to drink! Which I don’t need! Except on every other Friday! HA!  It’s been over two weeks and still not a word from New Zealand about the process, or if there has even been any progress! UGH!  And while nothing goes on, kiwi continues to get taken to the woodshed on a daily basis. Double UGH! 

And I saw an article on Bloomberg this morning talking about how hedge funds are fighting with Lola aka Goldman Sachs, on the direction of the Aussie dollar (A$)… Seems that the hedge funds want to take the A$ higher.. You can almost hear them doing their best Sly and the Family Stone imitation… “I want to take you higher!”  But Lola always gets what Lola wants, and Lola thinks that the A$ is overpriced.  

In Japan overnight they received a start warning from N. Korea, and printed a worse than expected Current Account Deficit… N. Korea sent Japan a message overnight saying, “You Can Never Be Safe”… Uh Oh! Was that an indication that N. Korea is about to start something? I sure hope not!  Every time things calm down with regards to N. Korea, and people / investors begin to put them in the back of their collective minds, something like this wakes them up!  Right now Japanese yen isn’t moving much, but I would think that as everyone in NY arrives at their desks that trade yen, will see to it that it gets sold on this N. Korea news… 

The U.S. Data Cupboard remains, for the most part, empty today, with only one minor Tier 4 data print on the docket.. And the Data Cupboard will remain this way (basically empty) until we get to Friday, when September Retail Sales will print.. The BHI is warming up right now, and I’ll have the results soon…  

Before I head to the Big Finish today… I’m getting a kick out of this Tweeting stuff! On Friday, I tweeted: Spin doctors are out in force today on jobs number. Check out the Pfennig on Monday I point out a discrepancy with the BLS numbers…   Now if you don’t have a Twitter account, you probably should, because it’s a great way to get news before the TV stations report on it. And you get to decide who you want to follow…  

To Recap…  The Columbus Day holiday yesterday has the markets trading very thinly, and the currencies remained in their same clothes as the day before all day. Gold was able to hold onto most of its early morning gains, and then the overnight markets saw traders throw some love the euro’s way, and Chuck believes the other currencies will follow once the euro shows that this move toward 1.18 is for real. Japan receives a dark warning from N. Korea overnight, and just can’t get past the fact that N. Korea has an axe to grind with them. 

For What it’s Worth…  Well here goes… this will be the cheese that binds, as this is where the template kept balking yesterday… I found this article on zerohedge, regarding the financial system in the world… And apparently nothing was done to correct this problem. So, if you want the URL link you’ll have to read the Pfennig email… for it’ll be there!   I hope this doesn’t ruin your day…  But technical glitches will do that, right?

Currencies today 10/10/17… American Style: A$ .7787, kiwi .7071, C$ .7996, euro 1.1798, sterling 1.3190, Swiss $.9767, … European Style:  rand 13.6928, krone 7.95, SEK 8.0770, forint 263.65, zloty 3.6420, koruna 21.96, RUB 58.25, yen 112.34, sing 1.3570, HKD 7.8038, INR 65.38, China 6.6256, peso 18.58, BRL 3.1670, Dollar Index 93.31, Oil $49.98, 10-year 2.35%, Silver $17.18, Platinum $927.77, Palladium $932.36, and Gold… $1,293.70  

That’s it for today…  Not much else to talk about today… As I said above, yesterday was a dud, and today is lining up to be another one for me… I tell the oncologist about my days, and she says, that rest and relaxation is  what I need while I’m receiving treatments… I say hogwash! Well, at least I would like to say “hogwash”!  Our Blues are off to a good start to their season, but there are over 6 months of regular season games left so I won’t get giddy over the start…  Marvin Gaye takes us to the finish line today with his song: Inner City Blues…    And with that, it’s time to go… I hope you have a Tom Terrific Tuesday, and Be Good To Yourself! 

 

 

Rocktober 5, 2017

  * ADP report says job creations lagged…

* ECB is meeting as Chuck writes this morning… 

* No videos from Chuck!

 

Good day… And a Tub Thumpin’ Thursday to you… By now you should know the routine… Every other Thursday, is an infusion day, and that’s today, which means there will be no Pfennig tomorrow… Blame it on “infusion confusion”… With which, if I’m lucky, will have cleared my head by late afternoon on Friday, and if I’m not lucky, the weekend will be a bummer! The Marshall Tucker Band greets me this morning with their song: Heard It In A Love Song… There was a time, back in the 70’s when I would predominantly listen to Marshall Tucker, The Allman Brothers, Charlie Daniels, Elvin Bishop, and a few more, what they called “Southern Rock”…

OK… Well, Front and Center this morning we have the ADP Employment report to go over, and trust me you’ll get the real news on this report and not what the “Spin Doctors” gave you when the report printed yesterday. ADP said that Companies only added 135,000 jobs in September, period. ADP doesn’t get into spinning reports so that the markets will feel good… They leave that for the “Spin Doctors” who must have pre-written their responses to the slowest report in nearly a year… The “Spin Doctors” immediately hit the news wires saying that the Hurricanes Irma and Harvey had reduced the number of new jobs that Companies would have hired people for during September. OK, I’ll give them some slack in that, sure in the Houston area, and the Jacksonville area, where flooding was just awful, there was no new hiring going on, but then who knows IF there was even going to be some during the flooding? Only the Shadow Knows

One of these days, Alice! I would like to load all these “spin doctors” up in a rocket ship and send them to the moon!

I have to stop and laugh out loud here… The Buddy Fuller Four’s song: I fought the law, is playing right now, and many years ago, before cancer, I used to do all the grass cutting, trimming, aerating, fertilizing, etc. And I wrote in the Pfennig that I changed the words to that song to: “I Fought the Lawn, and the Lawn Won!” And a Pfennig reader sent me a T-shirt with that saying on the front of it! I wore it proudly while “fighting the lawn”!  

There was some selling of the dollar after the ADP report yesterday, but in reality, the moves were small, and it appears what I said yesterday about how traders are looking for the next “something” to give them directions for the currencies, is holding true… In fact, I saw on Bloomberg this morning a writer there saying the same thing… I wonder where he got the idea?  Oh, move along Chuck!   People don’t want to hear about how you think Pfennig Readers that also write for websites, use your thoughts…    

Besides, even if that were true, it would be a form of flattery, right?  OK, back to reality, for we can’t remain in “Chuck’s world” too long, it’s not good for our health! HA!   The Aussie dollar (A$) slipped a bit overnight, as they printed two reports that didn’t sit well with traders… As they shouldn’t have!  Aussie August Retail Sales were negative 0.6%, which marked two consecutive months of negative results for Retail Sales. In addition, Australia’s August Trade Deficit widened to A$989 Million VS A$ 808 Million in July.   

These are the first pieces of data for Australia that have caused traders to rethink their rate hike call for later this year. I think that traders are getting ahead of themselves, and these two prints are just a small sample, and that they should wait to see further data before making such a rash decision!  

The euro ticked higher by a small amount throughout the day and overnight… The euro has had two body blows that it has had to deal with in the past 10 trading days. First we have the political uncertainty in Germany, the Eurozone’s largest economy, and then the Catalan vote to leave Spain hanging over the euro like the Sword of Damocles!  Speaking of the Catalans, their president is scheduled to speak today, and I think this is the time that he will give us the results of the vote that took place over the weekend…  (I guess they still do it the old fashioned way… manually. I wonder if any “hanging chad” was a problem for them! HA!)

Come on Chuck, this Catalan vote is nothing to joke about! Get your head on straight!  Yes, I’m well aware of how important this vote is, but can’t a guy have a little fun to keep the moment from getting so serious?  

The price of Oil slipped below $50 in the past 24 hours, but has regained the figure as I write. The U.S. reported record amounts of Oil shipped out of the country, thus causing the price of Oil to drop, given the thought that the U.S. supplies must be huge! I want to point out something that I’ve talked about a lot in the past 9 months, and that is the Norwegian krone, and how its so tied to the euro… And last night was a good illustration of that, as the price of Oil slipped below $50, the krone didn’t budge, and in fact gained a small amount as the euro rose…   

The Brazilian real has been really stealth-like with its recent rally. I noticed this yesterday, when I was recording the currencies for the currency roundup. Every day, the real is a bit stronger than the next day, and at first I thought, no biggie, but now the move has seen the real move from 3.1777 on 9/28 to 3.1352 this morning…  I know, I know, not a major move, but when the rest of the currencies are struggling to find a bid, the real has moved stealth-like stronger without much fanfare. I sure hope didn’t just give the real the kiss of death! UGH!    

Gold held its early morning gains yesterday, for the most part, and closed the day up $3.50. Gold is up another $3.70 this morning and as I write, the shiny metal is trading at $1,280.50…  Reuters ran an article on Gold at the Perth Mint, let’s listen in to hear what they had to say… “The Perth Mint’s sales of gold products doubled in September from a month earlier, while silver sales surged 78 percent, the mint said in a blog post on its website on Tuesday.

Sales of gold coins and minted bars jumped to 46,415 ounces in September from 23,130 ounces a month ago, the mint said. Silver sales during the month also rose to 697,849 ounces, compared with 392,091 ounces in August.

The Perth Mint refines more than 90 percent of newly-mined gold in Australia, the world’s No. 2 gold producer after China.”   Hmmm, very interesting… I love reading about physical Gold trading figures!  So, have you taken advantage of this recent pull-back in the price of Gold?  If not, what are you waiting for?  

And a story caught my eye this morning regarding Solar panels..  Why would that catch my eye? Well, Solar Panels use silver, and a lot of it to boot, and the article suggests that Solar Panels out sold every other form of alternative energy this past year…  Well, if that were to continue it would provide a nice underpin for Silver… 

Well, bust my buttons! I’ve gone on this far this morning, and haven’t mentioned the European Central Bank (ECB) meeting that’s going on as I write! Recall, that this was the meeting that ECB President Draghi, told us he would spill the beans regarding the Unwinding of their balance sheet…  But as the days drew near for this meeting, the chances of that happening grew slim and none, and Slim left town!  So, the ECB meeting today is probably just a routine matter, and that’s why I crept out of my mind this morning!   

Not that I need to make excuses for where I put things in the letter! No, one part is more important than another.  In fact I always intend to sprinkle things of importance throughout the letter, so that readers don’t just go to one piece of the letter to read…   

The U.S. Data Cupboard will have a piece of real economic data for us today when Factory Orders print for August… the last couple of Factory Orders prints have been negative, so I expect this one to at least print with a positive tone…  

Have you ever received one of those emails that tell you to watch this “short video” about some market moving idea, and you click on the “short video” only to be taken on a 1/2-hour tour of the writer, his credentials, and why he thinks you need to sign up for his “special letter” to find out the name of the asset he’s selling, and then get so upset that you wasted the time to sit through that?  Well, I’m here to tell you  that I won’t be sending you any of those “special videos”!   

And on that thought, it’s time to wrap this up with a neat bow and get it out there, so I can get ready for my visit to the infusion center… UGH!

To recap…  The ECB is meeting as I write today, but don’t expect anything from them, as they previously promised. The ADP jobs report yesterday showed just 135,000 jobs created in September, and the dollar got sold a little bit… Some of the currencies have carved out gains, but for the most part, it’s a pajama party for the rest of the currencies, as they trade in yesterday’s PJ’s!  Gold held its early morning gains yesterday and is up again in the early morning trading today. The price of Oil slipped below $50 overnight, but has regained the figure this morning.  

For What It’s Worth.. Thank goodness for Ed Steer’s letter! I found this on his letter this morning and it’s an article about Gold, and can be found here:https://www.sharpspixley.com/articles/lawrie-williams-metals-focus-still-sees-gold-hitting-$1-400-average-in-2018_272411.html 

Or, here’s your snippet: “In his presentation at the launch of this latest publication, Neil Meader, the group’s Research and Consultancy Manager, reflected on a slightly disappointing performance for the [precious metal] complex, despite great promise earlier in the year. The report thus suggests only a 2% average rise in the metal price this year compared with 2016. An earlier 5 year analysis of the precious metals complex by the consultancy had predicted $1,400 gold this year, and while this has not been totally ruled out, the latest analysis suggests that this price level may now not happen until next year unless some worrying geopolitical event (North Korea looks to be the most likely instigator) causes the metal price to spike again.

Writing here a week or so ago, we had suggested keeping a close eye on the largest gold ETF (GLD) to see the trend in institutional investment in gold in North America, which seems to be a great indicator of U.S. investment demand and thus of the overall trend in the global gold price level. After a strong couple of months, the past two days have seen 10.35 tonnes withdrawn from the ETF which is perhaps indicative of weak institutional demand for gold in the light of the recent price falls, although much of these can be put down to some recovery in the dollar index over the past few days.”

Chuck again… What can I say? Nothing new here, but at least we know that people are talking about Gold, and that’s a good thing!  

Currencies today 10/5/17: American Style: .7821, kiwi .7155, C$ .8017, euro 1.1765, Sterling 1.3193, Swiss $ .9767, … European Style: rand 13.6422, krone 7.9585, SEK 8.1022, forint 264.79, zloty 3.6640, koruna 21.9395, RUB 57.70, yen 112.60, sing 1.3623, HKD 7.8087, INR 65.09, China 6.6624, peso 18.26, BRL 3.1352, Dollar Index 93.49, Oil $50.14, 10 year 2.32%, Silver $16.68, Platinum $913.38, Palladium $928.75, and Gold… $1,280.50   

That’s it for today, and this week… I’ll talk to you again on Monday, God willing…  Well, our Blues got off on a somewhat good foot to their season last night in Pittsburgh. The Blues had a 2 goal lead in the 3rd period, and saw that lead go the dumpster, but then won the game in overtime! The last two years, I’ve gone out on a big fat limb and said that “this is going to be their year” only to see it not be their year!  So, this year, I’m keeping my big fat trap shut! I was switching the TV channels back and forth between the hockey game and the NL Wildcard game, which the Diamondbacks eventually won… Again, why do they need to start games so late? I wonder what the oncologist will have to say today…  The Doobie Brothers take us to the finish line today with their song: Natural Thing… I hope you have a Tub Thumpin’ Thursday, and remember to Be Good To Yourself!    And today, looks like a good day, to have a good day… 

 

Rocktober 4, 2017  

* Not much movement in the currencies yesterday

* UK Only country with weak PMI’s… 

* Revisiting the Recovery & Reinvestment Act of 2009…

 

Good day… And a Wonderful Wednesday to you! 10/4… That’s a 10/4 good buddy! How was your Tom Terrific Tuesday? Well, I hope it was grand. Mine was a little subdued. I tried to stay awake to watch the AL Wildcard Game last night, but that wasn’t happening! Why do they have to start these games so late at night? The NL Wildcard Game is tonight, same deal with that one! UGH!  Graham Nash greets me this morning with a song from his solo album, Songs For Beginners… The song today is titled: I Used To Be A King…  And while I wasn’t a “king”, no wait, Chuck, they don’t want to hear about that! Just back away from the keyboard slowly, with no intent to rush back to it! HA! 

Well, as I look at the currencies and metals this morning, I get the feeling that traders are now waiting for “something” to give them further direction in which to take these assets. Gold gained 60-cents yesterday… The euro is trading in the same clothes as yesterday, and the Dollar Index is down just 9 ticks from yesterday morning’s price. Gold has added nearly $4 in the early morning trading today, but we all know what can happen cone “the boys in the band” arrive at their desks, now, don’t we?

I was perusing through the Bloomberg stories this morning and came across one that caught my eye. Let’s see if it would catch yours as it printed as: $1 Trillion Fund Doubts Dollar Rally Will Last…   In the article the writer gives this piece of info that I think is very important… “Hedge Funds increase dollar shorts to most in 4 years”  I haven’t seen the IMM positions report lately, which reminds me that I need to go out and look for it each week, you dolt!  Nonetheless, dollar shorts have been increased to the most in 4 years, folks…   It’s good to see that other minds think the way I do regarding this rally by the dollar, that’s it will be short-lived, and soon will return to losing ground like it has for most of this year!  

The euro is receiving another half-baked hug from traders this morning after the Eurozone  harmonized PMI printed and saw a small increase from 55.6 to 55.8, and the composite print, which is manufacturing and services remained at 56.7 …  Not great shakes, but also not a step backward that would have to be dealt with! 

The Eurozone also saw their August Retail Sales data, which was NOT, good, but it was August, when most of Germany is on holiday, and things basically slow down to a crawl. The markets are aware of this, as it happens every year, and so the August print for Retail Sales of 1.25%, down from July’s 2.3%, didn’t ruffle any feathers this morning. 

Overnight, Japan printed their September PMI, and even Japan saw an increase in the index number from 53.2 to 53.7. Thus, the U.K. is the only major country to print their September PMI and see it lose ground. But wouldn’t we expect that, given the on going BREXIT  discussions? I think so! 

Boy, kiwi just can’t seem to even buy a bid these days…  The Political uncertainty here is just dragging kiwi through the muck. And I have to admit I didn’t see this one coming… I really thought that the National Party would win a majority of the seats and we could go on with our happy lives. And the problem with this is that this dragging out the Political uncertainty could go on for weeks, if not months…  But eventually it will iron itself out, and when the rumors begin to spread that a coalition gov’t could soon be formed, kiwi will rebound like Paul Silas!  

I’ve got a some thoughts this morning on the U.S. economy, so I might as well get to them before it gets too late!  So… 

Longtime readers know that I call myself a “Fed Watcher”, I’m a Fed watcher, and so on… In that light, I sign up for all kinds of reports from the Fed. St. Louis, and most of the time it’s the same old Fed rhetoric, about saving the world and all that… But yesterday’s Fed note caught my eye, and soon I was reading something that just made my blood boil… You see the article was about the funding that was earmarked for highway and infrastructure improvements back in 2009… Remember 2009? The first year of Quantitative Easing, and TARP, and this little thing called The American Recovery and Reinvestment Act of 2009… or just the Recovery & Reinvestment Act…

The major component of the bill targeted infrastructure, particularly the nation’s highways, and provided the states with $27.5 Billion in grants. This amount totaled 44% of all highway improvements made by the states in the previous year! But something happened to that money, as highway projects spending remained flat for the next three years. 40% of Americans lived in states that spent less on highway infrastructure in 2010 than they did in 2008, before the grants were made! Where did the money g

Ahhh grasshopper, the funds were “overcrowded”… In other words, the funds were needed elsewhere in each sate… If you recall at that time the States were hurtin for certain with tax revenues down big time, and so the States used the funds for other things… Like administration salaries! I kid you not! Anyway, here we are 8 years later, and those same highways still need improvements, but we have well paid administrators to tell us that the latest tax increase bill is needed! Here’s the link to the article on the Fed… I don’t know if you’ll be able to get to it or not, if you don’t have a sign on to the Fed’s site, but we’ll give it a try anyhoo… click here: https://research.stlouisfed.org/publications/economic-synopses/2017/09/22/why-the-2009-recovery-act-didnt-improve-the-nations-highways/?utm_medium=email&utm_campaign=201710A%20Research%20Newsletter&utm_content=201710A%20Research%20Newsletter+CID_3cb87ec7819ef51804e4c63181c2ba62&utm_source=Research%20newsletter&utm_term=Read%20why%20the%202009%20Recovery%20%20Reinvestment%20Act%20didnt%20improve%20the%20nations%20highways

Brother! I just shake my head in wonder of how in the world these state leaders got where they are?      OK, I’ve got to move on here, don’t want to get bogged down on one subject…  

I was reading my Daily Reckoning (www.dailyreckoning.com ) And James Rickards was talking about the U.S. being in a Depression, and I sat up and thought, “Hey, I’ve said that since 2010!” And I said it right here in the Pfennig! And the old Review & Focus. Well, Rickards thought the best way to get people thinking like him on this was to give them the John Maynard Keynes description / definition of a depression… Keynes said a depression is, “a chronic condition of subnormal activity for a considerable period without any marked tendency towards recovery or towards complete collapse.”

Hmmm… Very interesting don’t you think? I say that because that’s exactly what we’ve had since the financial meltdown in 2007-2008. Keynes didn’t say that a depression was negative GDP, he didn’t mention GDP at all! Instead he chose his words carefully, and said that a depression was a considerable period of Chronic subnormal activity… Isn’t that exactly what we’ve had since 2008? I talk about it all the time, how the economy is just muddling along, and not growing at the pace associated with an economy that’s nearly 10 years into its so-called recovery…

Yes, we’ve recovered from the depths of the economy after the financial meltdown, but recover beyond that? I say no! And if it weren’t for Gov’t spending, GDP would probably be negative! So, put that in your pipe and smoke it, Federal Reserve!

Oh, and one more thing that I’ve said about this depression over the years is that: “one might not associate this economy with a depression because there are no soup lines…  Well, that’s because the government assistance checks are mailed directly to the participant now. Their debit cards are sent directly to the participant. The days of soup line are over, and replaced by government assistance going directly to the participant.”  

Ed Steer tells me this morning that “all 4 precious metals put in intraday lows yesterday”…  YIKES! And like I said above, Gold gained just 60-cents yesterday, with just 200,000 contracts traded, which leads me to believe that’s why Gold’s move was so small… wink, wink… 

Yesterday’s Data Cupboard had a BIG SURPRISE for us… Sept. Auto Sales soared to 18.8 Million from 16.1 Million in August.  Auto Sales had seen monthly declines for more than 6 straight months until this September print, but then again I warned you a few weeks ago that this is what we could see as a result of all the flooded cars…   I figure we’ll se another strong month in Rocktober, but after that, we’ll return to the monthly declines..  

Today’s Data Cupboard has the ADP Employment Report, which is supposed to be an indicator of what the BLS Jobs report will be on Friday…  But most times it doesn’t work out that way, and it’s not the ADP report’s fault… It’s the hedonic adjustments that the BLS puts into their Jobs report that’s to blame!  So, anyway, the ADP report today is expected to be around 140,000 for September…  And that’s not a good number, folks…   

To recap…  Not much is going on with the currencies and metals in the past 24 hours folks… The Eurozone printed a strong harmonized PMI (manufacturing index) this morning, but their August Retail Sales fell, and Chuck explains why that happened.  All 4 precious metals put in intraday lows yesterday, as “the boys in the band” were busy!  And Chuck explains why he thinks we’re still in a depression…  

Before I head to the Big Finish today, I wanted to send out a HUGE THANK YOU! To longtime reader Bob T., who I met in Chicago during the years I participated in the FX University Tours. Bob came across some Pfennig coins, and sent them to me… and now they are displayed on my desk wall! Thank you so much Bob! 

For What It’s Worth… I was searching for a rainbow (Marshall Tucker) this morning, which would be FWIW worthy, and really didn’t find much, but did see this on Ed Steer’s letter, and he borrowed it from NASDAQ, and I’ll do the same. It’s about banks getting fined for FX manipulation, and so on, and can be found here: http://www.nasdaq.com/article/hsbc-deutsche-bank-pay-penalty-for-fx-rate-manipulation-cm853954

Or, here’s your snippet: “Two major foreign banks, HSBC Holdings plc and Deutsche Bank AG, resolved legacy business misconduct matters in the United States. The banks were accused of rigging foreign exchange (FX) rates.

HSBC was fined $175 million for its “unsafe and unsound practices in its foreign exchange (FX) trading business” by the Federal Reserve. The bank was accused of failure of oversight and internal control of its FX traders who buy/sell currencies “for the firm’s own accounts and for customers.”

The banking regulator alleged that the bank’s dealers shared confidential information about client orders and matched up trades to benefit them. The bank was also accused of attempting to manipulate FX rates.

HSBC is now required to improve control and fix shortfalls in “governance, risk management, compliance, and audit policies” pertaining to its FX trading operations. The company spokesman Rob Sherman said, “We are pleased to have resolved this matter related to practices in the FX market from 2008-2013.”

Chuck Again… I’m totally convinced that this type of stuff will go on and on until somebody goes to jail for their wrongdoing!  These fines, are like a light slap on the wrists for these Big Institutions… Go To Jail, go directly to Jail, do not pass GO, do not collect $200!   

Currencies today 10/4/17… American Style: A$ .7852, kiwi .7163, C$ .8017, euro 1.1755, sterling 1.3267, Swiss $.9738… European Style: rand 13.5652, krone 7.9580, SEK 8.1175, forint 264.63, zloty 3.6555, koruna 21.9915, RUB 57.91, yen 112.53, sing 1.3603, HKD 7.8064, INR 65.35, China 6.6514, peso 18.16, BRL 3.1495, Dollar Index 93.45, Oil $50.14, 10-year 2.32%, Silver $16.77, Platinum $915.89, Palladium $921.55, and Gold… $1,278.50

That’s it for today…  I see that the Yankees move on in the AL with their win last night. My dad taught me as a young kid, to not root for the “coast teams”. He said they had all the money, and could get whomever they wanted to play for them. So, I grew up always rooting against the “coast teams”, except the California Angles. I loved the halos on the tops of their baseball caps! HA! The Allman Brothers take us to the finish line today with their song: Southbound…  “Oh you can tell your other man, sweet daddy’s on the way”  Love it!  And with that, I’ll get out of your hair for today, and send you on your way to a Wonderful Wednesday!  Be Good To Yourself!