Category: Uncategorized

December 21, 2020

* Dollar buying looks like CB intervention to Chuck

* Silver outperforms Gold, Platinum, and Palladium! 

Good Day… And a Marvelous Monday to you! I won’t say that again until Jan.4, 2021… (My dad’s birthday)… These last couple of Pfennigs going into Christmas will be chock-full-o- stuff, for you to read while I’m on my traditional winter vacation…  Well, my beloved Mizzou Tigers laid an egg in Starkville, MS. Last Saturday. UGH! But they impressed someone because they have accepted an offer to play in the Music City Bowl, In Nashville, Dec. 30^th…  So, congrats to coach Drinkwitz and his team. I also watched my good friend Rick’s alma mater, Clemson, destroy Notre Dame, which was delightful for me! I have always rooted for whomever plays Notre Dame…  Little Evie and brother Braden came to spend the night with us Saturday night… Braden and I played a game of chess… He came close to beating me, and he’s only 9! The late great Leon Russell greets me this morning with his song: Delta Lady… 

On a sidebar, a different good friend named Rick, learned of my love of Leon Russell, and now he sends me links to concerts and other recordings that Leon Russell performed on. So, do you think if I told him I loved… oh never mind… that’s silly!

OK.. well, the dollar bugs fought back on Friday, with the euro losing about 1/4- of a cent, and Gold giving back $4.60 on the day… The Dollar Index, which when I left you on Thursday was 89.96,  recovered to 90.01. and had risen even further in the overnight markets to 90.63…. One could say that the currencies had shot up so fast, that they needed to go back and fill in the gaps…  Or, one could say that my thought of a new weak dollar trend beginning is hog-wash!  And that the dollar will come roaring back once the virus vaccine has been distributed to the masses… (of which people over 75, and essential workers are next in line for the vaccine, once medical people get theirs… Son Alex, who is Physical Therapist and is in contact with people all day, every day, says there are no plans in place for he and his colleagues to get the shot, yet… )

Whatever the reason, and I believe it to be the former of the two I presented, we’ll have to hold onto our horses, and not change them in the middle of the stream, until we know for sure.

In the overnight markets the dollar buying has increased its fervor, and now it’s beginning to look like Central Bank intervention to me, for the dollar has really pushed back with force against the currencies. The euro this morning has lost almost 1-cent since last Thursday. And like I said above the Dollar Index has recovered to 90.63…  Gold in the overnight markets has lost $3, but Silver has gained 36-cents to move over the $26 handle… This is quite impressive, given that both Platinum and Palladium have gotten the snot kicked out of them overnight, and Gold is fighting to keep its head above water, and we have Silver kicking tails and taking names later…  Pretty impressive… 

Well, there were lots of stories over the weekend about the direction that the President-elect is going to take us…  I have one of those articles in the FWIW section today, So keep it right here, and don’t touch that dial!  Another one is one I’m going to talk about now…  The long awaited 2^nd Covid Relief Package was signed by Congress yesterday, and it is in the amount of $900 Billion…  Of course that’s $900 Billion that Congress doesn’t have to spend, so the currency will be printed out of thin air, with no backing, as it has since August 1971.  To use Bill Bonner’s term… This is nothing but fake money… Another feature of the Relief Package is extended unemployment benefits, which were scheduled to expire on 12/31/2020…  Yes, in 10 days…  they would have expired without being extended with this package…  I hate to be the bearer of bad news here folks…  But putting money into hands of people with no stipulations, could end up being a not-so-good-thing -to-do…  But I’m sure the government people behind this relief package know more than me, and so I’ll just move along here for these aren’t the droids we’re looking for!

Oh, and the free passes the renters and mortgage owners have been receiving were also extended, but only for 1 month…  I guess the negotiators thought the new President could handle that one! And, I’m sure shootin’ believin’  partna… that there will be no evictions on his watch…

$900 Billion added to our debt, in a keystroke on a computer keypad…   I read last week that Twenty-five percent (25% or 1/4 ) of all US Dollars to ever be in existence were created in the last nine months. And that’s before they added another $900 Billion!  You know, folks… I’ve been talking about the ill-effects of Deficit spending, and Debt Accumulation for about 20 years… Before that, It always seemed to me that the debt that we, as a country, had, could be dealt with, sanely…  But then I noticed that no one in Congress was ever talking sanely about debt, and it was then that I figured that we could allow the dollar to get very weak, thus inviting inflation into our economy and inflate away the dollars, or… we could raise taxes…  Notice I didn’t say stop deficit spending, because that had a snowball’s chance in hell of ever happening! 

Now, I believe that the accumulated debt (Over 27 Trillion) is too large to inflate away… I also believe that it’s too large to raise taxes to pay for it… That leaves one choice, and that is to default on the debt and start over…  I’ve gone on record saying that I believe that this will happen around the world because, except for Russia, the rest of the world has gone bonkers with debt accumulation too…  And if the new administration listens to their far left colleagues, we’ll get to the point of defaulting at a faster pace than we are on now.    I’m just saying…

I know, I sound insensitive about this Relief Package, and I apologize for that. I realize there are people and small businesses out there that need help…  But, I always remember what Ronald Reagan once said, about the scariest words spoken, are: “I’m from the government and I’m here to help”… And what good does saving a business now do, if in 6-month to a year, the whole shootin’ match collapses and folds like a cheap lawn chair?

Ok, let’s stop talking about debt accumulation!  I think that the numbers have gotten so large, that normal people can’t fathom what it takes to make $900 Billion…   So, let’s move on…

10 years ago, or so, we would get calls from people all the over the country asking us if we would sell them Iraqi dinar, for they had read that it was going to be revalued…  I had instructed the people on the trade desk that we should gently break the news to the callers that there were no plans for a currency revalue…  One time when I was in Panama at a conference, a gentleman came up to me and told that he had inherited his family business, and that he put all their cash into Iraqi Dinar, for he knew that it was going to be revalued, and wanted to know my thoughts about that… I said to him, “you did what? I believe that the dinar is a worthless , for investment, currency, and that there would be no revalue, and that he should see if he can get out of that trade”… He was not happy with me to say the least!   Oh… and there was this tidbit in the weekend’s news…  Iraq’s central bank increased the sale price of U.S. dollars to banks and currency exchanges to 1,460 dinars, from 1,182 dinars That a DEVALUATION folks!    Not a revaluation!  I wonder what all those folks that kept calling us and telling us the revaluation was real and was going to take place on “x-date”, are thinking now….  Should have listened to me… That’s I’m saying about that!

The U.S. Data Cupboard last week was very disheartening if you are a person that believes all is going along nicely here in the U.S. It was also disheartening for the dollar bugs who saw the dollar fall to its lowest level since 2018… And this is just the beginning in my opinion…  So… The Weekly Initial Jobless Claims blew away the expectations of 862,000 and came in at 885,000… When I left you last Thursday, I said, “what would happen if the claims were greater last week?” I said, I thought the dollar would get sold and that’s exactly what happened…  The Continuing Claims also rose from 19.04 Million to 20.64 Million… So, as usual I’ll give you MY Unemployment Rate of 13.76%…  For comparison purposes, the BLS says Unemployment is 6.7%…   And I would think my rate was conservative, given all the people that have fallen off the Unemployment roster, because their benefits ran out…

And that was Thursday, when the dollar got sold, and Gold was up $20.80, and the currencies moved higher VS the dollar, but, as I said above, on Friday, the dollar bugs fought back, and moved the dollar modestly upward against both the currencies and metals. And in the overnight markets the dollar bugs are back to having the conn…  I would think only for a day, because this is a Monday, Monday can’t trust that day! 

There wasn’t much else, in the way of economic data, reported last week, except for Leading Indicators, which were weaker than Rocktober’s indicators, coming in at .6% VS .7% previously….  Leading Indicators and Capacity Utilization are really the only two pieces of data that are forward looking, or tell you about the future… Everything else is in our rear view mirrors…

Before we head to the Big Finish…  I wanted to point out a link to an article on the Daily Reckoning, that’s a brief video, where the changing of folding cash to digital currency, is discussed in video format… If you don’t have time for the video, trust me on this one, I’m not the only person out there that’s now saying the U.S. Gov’t will be changing over to digital currencies…  www.dailyreconing.com you’ll have to look for it, they post so many articles…. It’s by Nick Giambruno….  Shoot Rudy, I recall when they used to post my Pfennig the site and included me as one of their “writers”…  but that was then and this is now…

To recap…  The dollar bugs fought back on Friday, after seeing the dollar get sold down on Thursday, after the Initial Jobless Claims printed an 885,000. In case you’ve missed the last two weeks of Claims numbers, they happen to be going in the wrong direction, which is upward…  There wasn’t much else to deal with and so the Thursday gains got chopped a bit on Friday…  Chuck points out that after all these years, the Iraqi dinar is NOT getting revalued upward, instead it just got devalued downward! And of course Chuck opines on the Covid Relief Package… 

For What It’s Worth….  You know, I’ve heard some real dumb ideas come from politicians and economists over the years, but the Universal Basic Income idea is really stupid!   So, I just wanted to make certain that you knew I didn’t endorse this guy’s thought, but also thought that it was good to see who’s making these calls as if they went to Jupiter to get more stupider!  The link to the article is here: Former Goldman CFO Calls For Universal Basic Income “To Stave Off Revolution” | ZeroHedge

Or, here’s your snippet: “In an interview with The Business of Business, host Gregory Ugwi asked Chavez if he agrees with Rep. Alexandria Ocasio-Cortez (D-NY), who says “there should be no billionaires in the US as long as there are poor families,” adding that venture capitalist Paul Graham says that income inequality is a “natural part of capitalism, and a sign that the process is working.”

Chavez, a Democrat donor (most recently Pete Buttigieg’s presidential bid), agreed that the income gap is a consequence of capitalism, but said “at the same time, it isn’t an inevitable feature of capitalism that the inequality be as extreme as it’s getting. There have been long periods in American history where there was always inequality – but it wasn’t this kind of inequality.”

He also isn’t a fan of AOC, saying “I am not in AOC’s camp – at all. I didn’t vote for her, I wouldn’t vote for her. I hear her, and she’s just not saying anything that makes any sense to me.”

“At the same time, I’m a big proponent of a universal basic income.

My personal view is that if you’re just being pragmatic and looking at inequality – and not thinking about some abstract concept of justice – you don’t want the inequality to be so extreme that it leads to revolution. So you ought to be prepared to pay to decrease that probability.

This is what I say to, you know, friends who you might call ‘oligarchs,’ right? Why it would make sense for everybody to have some baseline income and why we should all pay for it.”

Chuck Again…  What a dolt… And he ran a business at Goldman Sachs?  Give me a Break!

Market Prices 12/21/20: American Style: A$ .7577, kiwi .7038, C$ .7762, euro 1.2172, sterling 1.3290, Swiss $1.1268, European Style: rand 14.8282, krone 8.7495, SEK 8.3182,  forint 296.38,  zloty 3.7087,   koruna 21.5802, RUB 73.40, yen 103.56, sing 1.3376, HKD 7.7528, INR 73.96, China 6.5360, peso 20.39, BRL 5.1010,  Dollar Index 90.63,  Oil $47.28,  10-year .90%, Silver $26.20, Platinum $993.00, Palladium $2,342.00, and Gold… $1,877.90

That’s it for today…  Well, our St. Louis U. Billikens are no longer unbeaten… They lost on the road in Minnesnowta, last night… UGH!  We had some sunny days this past weekend, but it really didn’t warm up as much as the bright sunshine would have you believe… But it was  “warmer” than normal this time of year, which is good because the cold is coming back this week… But no snow is forecast for Christmas. UGH! You know, I never missed a day of work because of weather, snow, ice, whatever. Even back in the day, long ago, when I used to take a bus downtown from 20 miles out! But I do have to say that now that I don’t HAVE to go anywhere when is snows, I like that much better! I sat down at the piano yesterday for the first time in ages, and I mean AGES!  The piano is need of a tuning, but I was still able to figure out the notes for a song I’ve been hearing a lot of lately… And after about 10-15 minutes, I walked away from the piano…  I still haven’t picked up my guitar in a couple of months! UGH!  Alex closed on his home on Thursday, and moved in on Friday… I went to his new place to see if there was something I could do to help, but they had it all under control!  So, Congrats Alex! The Searchers take us to the finish line today with their song: Love Potion No. 9…  That song always makes me happy to hear it…  I hope you have a Marvelous Monday, and please with all that’s going on, Be Good To Yourself!

Chuck Butler

 

December 17, 2020

* Currencies, led by the euro, on pushing higher

* The U.S. names Switzerland a currency manipulator? 

Good Day… And a Tub Thumpin’ Thursday to you!  What a day yesterday… Congress is closer to a stimulus deal, The dollar weakened, Gold & Silver had good days, and Chuck received a Christmas Card from a longtime friend, Michael Checkin! I was pleasantly surprised upon opening the card to see who it was from…  I also got one from Tim and Nicole Smith, with their baby boy!  It’s that time of year again when we reconnect with long lost friends… I reconnected with one yesterday, and what a treat it was catching up! Melvin and the Blue Notes greet me this morning with their song: If You Don’t Know Me By Now…  (I’m sure any younger readers would recall Simply red doing that song, but the original was my Melvin and the Blue Notes)! \

Well, I took all the suspense out of reading the Pfennig this morning by telling you upfront what I was going to talk about, but in case you didn’t catch it… The dollar continued to weaken yesterday… I lot of the movement didn’t come until later in the day, after the Cartel’s, I mean the Fed’s press conference, where Chairman Jerome Powell, told an audience that the Cartel, I mean the Fed will continue with Quantitative Easing/ QE4…. That sent the dollar down, and the currencies up…

The euro, which had given back a little bit of its gains in the early trading, recovered the lost ground, and even went higher closing the day t 1.2192… I say closing the day, but, in reality, you all know that the Asian markets start the day, hand it over to the European Markets, who then hand it over to the U.S. markets, and then back to Asia… That all happens except on Fridays… When the U.S. market closes on Friday afternoon, it doesn’t open again until Sunday night in Asia…   

Gold & Sliver also took the cue from the falling dollar and rallied going into their close, with Gold gaining 11.30 to close at $1,866.10, and Silver outperforming Gold again on a percentage basis, gained 86-cents, a major move for Silver, and closed at $25.41…   The dollar weakness is because, what currency traders hear when they read that a stimulus agreement is near… They hear “more currency printing, thus debasing the current supply of dollars”…  Never mind that it might be needed by the masses, they deal with reality for the dollar…

It was surprising yesterday that Bonds didn’t budge after the November Retail Sales number printed… Boy was I glad that a deep sixed the BHI this month and went with what I’ve been telling you was going to happen to Nov. prints… Nov. Retail Sales were negative -1.1%… Which was far worse than the so-called experts had forecast (-.4%) …  And this print sure does bode unkindly to the Christmas Shopping Season, and that shopping season does get started in November! 

Retail Sales for 2020, are forecast to be down 10.5%, which is equal to $4.894 Trillion, and hadn’t been this low since 2016…  Of course the lockdowns are negatively affecting Retail Sales, but… only to a degree, for as the Amazon Prime driver that comes to my house every day with a package or two or three, knows, most shopping is being done online…

You know I miss shopping for presents… At least when I did that, I had the present in my bag and didn’t have to wonder when it was going to be delivered! I’m still waiting on two deliveries that I was told when I bought them that they would be here in time…  

OK, so the overnight markets all hell has broken loose! The dollar is on the chopping block! The Dollar Index has fallen to 89.86, the euro is pushing higher in the 1.22 handle, Gold is up $14, and the rest of the currencies are following the lead of the euro… Apparently, the Asian markets participants didn’t like the Cartel, I mean Fed’s song and dance yesterday!  But this move has the markings of what I’m going to be talking about with regards to the weak dollar trend, in a minute… 

The price of Oil rallied in the last 24 hours and is trading with a $48 handle this morning… See that? The Vaccine get approved, and shipped out, and medical people are getting shot up, and Oil begins to perk up… Just like I said it would, but if you want to see the price of Oil go back to $45 or lower, then you’ll have to call your congressman and tell him no stimulus please!  Yeah, like that’s going to happen!

The new weak dollar trend that I talked about last month beginning, is really becoming something that I’ve seen before… When just about every day that I arrived at my desk at the old EverBank World Markets, and turned on my Bloomberg, I would see that the euro had gained again…  We’re not exactly there just yet, but getting there… Remember when you were a kid and played a game where you hid something and other kids would have to find it, and you would say “getting hotter”, “your burning up”, when they were close to the object?  Or say, you’re “getting cold, then colder, then you’re ice cold” when moving away from the object?   Well, I do believe we’re getting warmer to those days when the dollar is sold daily..

Regarding Gold… The good folks at GATA sent me a note yesterday that started like this: “Gold and silver in the form of coins and bars are experiencing an enormous surge in demand at German precious metals dealers.”  Now I would put that down as good news for Gold & Silver…

Let me remind you that a weak dollar is a loss of buying power for dollar holders, which happens to be all of us! I’ve always viewed the loss of buying power like a tax, that you certainly didn’t vote to have charged to you! 

So, have you heard the news that Lola, aka Goldman Sachs, bought the Perth Mint’s Gold ETF business?  This all sounds very strange to me folks… Lola bought the ETF biz. And is having the physical Gold shipped to London… And Lola’s new Gold ETF won’tt have the convertibility that the Perth Mint had… The Perth Mint was only place you could convert your GOLD ETF into physical Gold, but that’s gone, and Goldman won’t allow that… . Makes you wonder why, doesn’t it?

I don’t know this to be a fact or anything, but I would think that Lola will lease out the Gold, and therefore couldn’t chance a run on convertibility of the ETF…  I would also think that the regulators would have a problem with that, but… As we’ve seen with metals regulators, they aren’t worth a hill of beans when it comes to regulating these Bullion dealers…

I’m sure no one at Lola reads this letter, so they won’t get mad at me for telling stories out of school on them… At least I would think  that to be the case!  And the other thing that the new Goldman Gold ETF won’t have and that is the ETF’s unique guarantee from the government of the State of Western Australia.  But them Lola supplies most people to Gov’t posts, so maybe they’ll work out a deal…

I was reading the 5 Minute Forecast on Tuesday, and read where the new guy at Agora, was touting Bitcoin, and talking about how it’s better than Gold…  Well, I decided to let that go, because that’s just his opinion, and opinions are like… you know the rest…   I went back to the 5 yesterday to see what readers had to say, about that claim, and poor Dave Gonigam, the editor of the 5, was inundated with replies telling his new colleague how wrong he was, and so on… So, it was then that I decided to cheer up Dave’s day, and I sent him the link to that YOUTUBE that I had put in the Pfennig a week or so ago… Missed it? Ok, here it is: bitcoin billionaire – YouTube

And wouldn’t you know it I received a note from a dear reader yesterday with news about a possible solar flare! I quickly went to the source, and the guy had concluded that there may be as much as a 12% chance of such an event occurring. But not saying when!  But did you know that the last Solar Flare to hit earth hit near Quebec and put out power there for days?   And there have been 7 Solar Flares hit Earth since first recorded in the 1800’s…  

Ok, back to regular programming…  The Big Piece of data today from the Data Cupboard is the Weekly Initial Jobless Claims, which last week showed that the week following Thanksgiving saw 818,000 claims flied…  Recall that there were two less day to fil the week of Thanksgiving, so there were in effect 2 extra days in last week’s report. So, one would think that this week’s report will be less than 818,000, butt… what happens if the number of claims is great than last week’s 818,000?  I would think that the dollar would get hit, and Gold & Silver would potentially have good days…

There are some other prints today, but none that get me all lathered up…  Including one of those regional manufacturing indexes, that I am boycotting, reporting on, since they don’t ever feed into the National ISM numbers… So, why report them? 

To recap… Congress is apparently close to a stimulus deal and that news sent the dollar to the wood shed for the day, the currencies, Gold, Silver and Oil all rallied on the day…  Chuck talks about previous weak dollar trends and how the dollar traded inside those trends, and how we’re not quite there yet… And then he discusses the Lola purchase of the Perth Mint’s Gold ETF Biz….  And he touches on Solar Flares, just for the fun of it… for his Bitcoin buddies!

Oh, and before we head to the Big Finish… get ahold of this… The U.S. has named Switzerland a “currency manipulator”….  Now that may be true, but isn’t this a case of the pot calling the kettle black?   

For What It’s Worth…  Ok, since I had said yesterday that didn’t expect any market moving comments from Cartel, I mean Fed Chairman Powell, and then we went out to prove me wrong, I thought I would give you an article that explains what he said, and it came from our local paper! The St. Louis Post Dispatch… and it cvan be found here: Fed vows to buy bonds until it sees ‘substantial progress’ in economic recovery | Local Business | stltoday.com

Or, here’s your snippet: “The Federal Reserve on Wednesday promised to keep funneling cash into financial markets further into the future to fight the recession, even as policymakers’ outlook for next year improved following initial rollout of a coronavirus vaccine.

Repeating a pledge to keep its benchmark overnight interest rate near zero until an economic recovery is complete, the U.S. central bank said it would also now tie its program of monthly government bond purchases to that same goal.

“Together, these measures will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete,” Fed Chair Jerome Powell said in a news conference after the end of the central bank’s latest policy meeting.

The bond purchases would continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals,” the Fed’s rate-setting committee said in its unanimous policy statement.

It was the more incremental step of the options the Fed was weighing, taken as policymakers boosted their outlook for U.S. economic growth next year to 4.2% from 4% at the median, and lowered the expected year-end unemployment rate to 5% from 5.5%.

With the economic landscape in 2021 brightening, the Fed did not change the type or pace of assets being purchased, a step many analysts had expected as a way for it to provide more immediate help to the economy in the months that it will take for the impact of vaccines to be felt.”

Chuck again… 4.2% next year, when we haven’t even booked a 3% gain since 1985!!!!!!  What’s Powell been smoking? And no thank you I don’t want some!  I like that he said, “we’ll keep funneling cash into “financial markets” into the future…  He didn’t specify what asset classes he included in his term “financial markets”…  So… take that to mean, Treasuries, Corp and Mortgage bonds, and ETF’s, gotta keep that stock market going strong Jerome… But while you’re doing that Jerome, could you find in the Fed’s mission statement where it says you are the stock markets’ buyer of last resort?

Market Prices 12/17/20: American Style: A$ .7629, kiwi .7167, C$ .7871, euro 1.2246, sterling 1.3588, Swiss $1.1318, European Style: rand 14.6868, krone 8.5800, SEK 8.2760,  forint 290.01,  zloty 3.6250,   koruna 21.3757, RUB 73.38, yen 103.02, sing 1.3249, HKD 7.7525, INR 73.52, China 6.5325, peso 19.79, BRL 5.0921,  Dollar Index 89.86,  Oil $48.07,  10-year .92%, Silver $25.91, Platinum $1,058.00, Palladium $2,358.00, and Gold… $1,880.30

That’s it for today and tomorrow… I know it wasn’t a popular decision that I made last year about me not writing on Friday’s any longer, but it has been a God send to me! Like Manna from Heaven, as I roll over on Friday mornings and realize that I can go back to sleep!  So, my Missouri Tigers football team will end their season on Saturday in Starkville Miss. VS Miss. St.  It would be much nicer to end the year at 6-4, and not 5-5, although they were only forecast to win 2 this year!  The reports yesterday of the high school seniors who have signed to play at Mizzou, was very impressive…  I used to always complain about kids in the state that went to different schools other than their state school… I would have given my first born to be able to play football at Mizzou! But, the new coach Eli Drinkwitz, seems to have the message that young men want to hear! So, bully for Eli! Or Coach Drink!   I’ll be here to write Monday through Wednesday next week, and then my winter vacation begins… 12/21 though12/30, and back on 12/31… I might tweet something that comes up that’s important to know, but I doubt it….  Billy Joe Royal takes up to the finish line today with his song: I Knew You When…  “you were lonely…. A girl all alone without love”…  The Human League did a song similar to this one in the 80’s called: “don’t you want me baby”…    And with that, I hope you have a Tub Thumpin’ Thursday, and Fantastico Friday tomorrow! And please Be Good To Yourself!

Chuck Butler

 

December 16, 2020

* Currencies drift on Tuesday, but rally overnight

* Dollar weakness leads to rallies for Gold & Silver… 

Good day…  And a Manfred the Wonder Dog Wednesday to you! BRRR… it’s cold outside! I can’t wait to get down to S. Florida for the winter. I told Kathy last night that it appeared we could be spending a longer time in Florida this winter, as Major League Baseball is considering starting Spring Training games in April. They want all players, and team personnel to have been vaccinated before showing up to Florida or Arizona. And apparently they don’t think that can happen between now and the middle of February, when pitchers and catchers normally kick off spring training.  Our St. Louis University Billikens Basketball team played last night, and beat Indiana St. handily….  I’m thinking great things about both the basketball teams I follow, SLU and Mizzou, for this year. They both are upper-class laden teams, which I think is important.. (Not to Kentucky, but everyone else!)  The late Great Dan Fogelberg greets me this morning with his song: Lessons Learned…  “Lessons learned are like bridges burned, you only need to cross them but once”… 

Alright, alright, I was one day ahead of what’s going on in the U.S. Data Cupboard yesterday! What a dolt! So.. to straighten this all out…. YESTERDAY, Industrial Production printed for November, and saw a .4% gain, down from 1.1% in Rocktober… And Retail Sales won’t print until today!  UGH! I can’t believe I did that! No, wait… I can believe I did that, because, I’m a dolt! So, sorry for all that being wrong and off a day yesterday… I can’t promise I’ll never do that again, because, well… When you’re a dolt, you can’t ever be sure!

The currencies didn’t move much yesterday and they just sort of drifted all day long… The Dollar Index, which yesterday morning traded at 90.56, ended the day at 90.50… So… you can see right there that there was little movement in the currencies on Tuesday. Gold & Silver, however, were a different story! Gold rose $26.60 on Tuesday to close at $1,854.80, and Silver rose 63-cents to $24.55…  There was news yesterday that a new stimulus package was being discussed by the parties involved. And that means going deeper into debt, more currency printing, and… something that’s called collateral damage, in that, this would be the second stimulus, and that would start the clock on the 3^rd stimulus, because once you opened Pandora’s Box of giving people money, they’ll always want more, and more, and more… And when you cut them off and make them go cold Turkey on cash giveaways, they take to the streets…   I’m just saying…

I love it when long time fiend, and publishing guru, Bill Bonner talks about the currency printing as “fake money”…  Because that’s what it is!  It’s created not from hard earned wages, or wealth accumulation, it’s printed out of thin air…  It’s Fake Money”!

OK… in the overnight markets… it has been a different story, as the dollar has been getting sold like funnel cakes at a State Fair! The Dollar Index this morning has fallen to 90.22, the euro is within spittin’ distance of 1.22, and Gold is following up yesterday’s large upward move with a positive start to the day…   

One has to wonder what’s behind the last two day’s move in Silver, which has outperformed Gold on a percentage basis… Silver this morning is up 62-cents, which means it is up $1.25 in the last two days. Remember what I’ve told you previously, that in the last bull-commodity market that Silver outperformed Gold in 7 of those 10 years…  On a percentage basis, for we know that the current Gold’s price is much larger than Silver’s price… 

That little thing that Kitco has on their site that allows you to see the price action in the metals, tells me that most of Gold & Silver’s moves overnight have been courtesy of the weakness in the dollar…  So, as I’ve said before you can look at these increases two ways… You can say Gold gained VS the dollar, or you can say that the dollar lost VS Gold…   

I keep reading more and more articles about different countries announcing their plans for implementation of a digital currency… Singapore, was the latest to do so…  The U.S. has announced any such plans, yet, that is, but they did say that they were working on developing a digital currency… I would imagine that takes in far more obstacles than in Singapore…  Remember, I first told you montths ago about how the U.S. would introduce a digital currency, and you would wake up one Monday morning, turn on your computer, log in to your bank account, and find that it no longer reflected dollars held, replaced by digits…   This isn’t going to happen overnight, next week, next month or maybe even next year, it all, to me that is, depends on when the U.S. has to default on any of their debt, and the dollar begins to fall like a rock… 

It’s been a month of Sundays since we last saw the S. African rand below 15…  But that’s where we find it this morning, and to me this is just another sign that the new weak dollar trend is beginning… For when a currency like the rand begins to rally, you know that dollar selling is the cause of that rally…  I’m not touting the rand to own…  With all the corruption in that country, I’ve always said that “I wouldn’t touch rand with YOUR ten foot pole!”  

The price of Oil rose about 50-cents yesterday, as the news of another stimulus got Oil traders feeling giddy about the return of demand for their product.  The Petrol Currencies have been noticing this rise from $45 a week ago, and have been adding to their gains VS the dollar…  The Russian ruble, Norwegian krone, Brazilian real, Canadian dollar/ loonie, and even the Mexican peso, and British pound sterling, have all been rising VS the dollar in recent weeks… but especially in the last 10 days…

Remember a month or so ago, when I wrote about how a dear reader sent me a note and asked me what was up with the Russian Ruble, that the price of Oil had been rising but the ruble wasn’t?  And I provided a quote from the finance Minister, who said, “ the Ruble is weak right now, but it will come back”… How did he know?  The ruble which on 11/2/2020 (just 6 weeks ago), was 80.57, and this morning it is 73.      …..  Another sign that that a weak dollar trend is in place… 

I had a dear reader send me a note a couple days ago, and ask me how the C$ had gone from 74-cents to 78-cents that day? I went back and found that the C$ had been moving steady Eddie, and very stealthily upward for about two weeks, and had been trading with a 78-cent handle for about 5 days… But you can imagine some readers that don’t read the letter very often and tune in every now and then going to the currency roundup and seeing currency prices that they haven’t seen in years. And the last time they saw the currencies at these levels, they were coming down… Now they’re going upward!

Of course, it’s the opposite for Gold & Silver, these two have seen engineered takedown after engineered takedown to bring Gold from $2,000 down to where it’s trading this morning.  Those every now and then readers would be wondering what the hell happened to Gold? Shouldn’t it be on the rally tracks along with the currencies VS the dollar?  Well, sometimes yes, but this time no… You see, what’s going on with Gold is two things…  1. It’s currently a “risk off” scenario in the markets, and 2. The darn price manipulators, who take shots at Gold whenever there’s a day when there’s weakness and they pile on to make the day worse…

But… Gold is still the best performing asset class since 2000….  I’m just saying…

Today is a Cartel, I mean a Fed Meeting…  Investors are looking for the Fed Heads to signal even more accommodating fiscal policies….  Any MORE? How could they be even more accommodating than they are now?  Well, I guess they could go negative with rates, but I’m hoping that they take their cue from Sweden, who went negative a couple of years ago, and then decided that it wasn’t worth it, and the Swedes went back to ZIRP (zero interest rate policy)…  

Cartel, I mean Fed, Chairman Jerome Powell, will hold a press conference after the meeting, but don’t expect anything earth moving from him… He’s just managing to keep the apple cart upright right now…

To recap…  The currencies drifted all day yesterday, but Gold & Silver had great days! Gold rose $26 on the day, but in the overnight markets the dollar is getting sold like funnel cakes at a State Fair, as more discussions of another stimulus package is back on the negotiating table, even with the rollout of the virus vaccine…   more “fake Money” to be sent out…  You see, Deficits DO MATTTER! For if we as a country had cut deficit spending years ago, we might be dealing from a position of surplus or strength….  But NOOOOOOO instead we just keep adding to the National Debt, which when I checked the Debt Clock this morning it was $27.4 Trillion in the red…    UGH!  

For What It’s Worth…  Well.. I searched yesterday for a FWIW worthy article that I could use today, and then I came across this article on the Reuters site, and it’s about how small U.S. Corporations see 2021 working out for them, and it can be found here: Majority of small U.S. businesses see worst coronavirus impact still ahead -poll | Reuters

Or, here’s your snippet: “Most small business owners in the United States believe the worst of the coronavirus pandemic is still ahead of them, with half saying their operations would permanently close within a year unless the business environment improves, the U.S. Chamber of Commerce said on Tuesday.

A new U.S. Chamber-MetLife poll of small businesses taken from Oct. 30-Nov. 10 showed that 74% of the owners said they need further government assistance to weather the pandemic. That percentage rises to 81% for minority-owned businesses.

The quarterly poll found that the 62% of small business owners fear that the worst is still to come with COVID-19’s economic impact. Only 40% said they believe their small businesses can operate indefinitely during the current business environment.

“We must ensure small businesses across the country receive the assistance they need from the federal government,” said Neil Bradley, the Chamber’s chief policy officer. “Not passing the bipartisan compromise for temporary and targeted relief risks the permanent loss of tens of thousands of small businesses, financial hardship for millions of Americans, and unnecessary delays in combating the pandemic.”

Bradley said the quarterly survey found that 14% of small businesses are currently planning to cut staff, up from 9% in July and September. Staff reduction plans are back up to the 13% level that the survey saw in April during the pandemic’s first peak, he said.”

Chuck again…  You know, I’ve tried my best to keep ordering food to be delivered throughout these lockdowns, but that’s just restaurants, what about the other businesses? This has been tough for them to say the least, and we need to take the extra step to buy things from them, instead of just going to Amazon… I’m just saying… 

Market Prices 12/16/20: American Style: A$ .7566, kiwi .7099, C$ .7844, euro 1.2189, sterling 1.3520, Swiss $1.1308, European Style: rand 14.8560, krone 8.6764, SEK 8.3458,  forint 291.45,  zloty 3.6325,   koruna 21.4684, RUB 73.54, yen 103.41, sing 1.3295, HKD 7.7518, INR 73.54, China 6.5440, peso 19.89,  BRL 5.1048,  Dollar Index 90.22,  Oil $47.61,  10-year .92%, Silver $25.17, Platinum $1,048.00, Palladium $2,376.00, and Gold… $1,860.60

That’s It for today…  I’m going to have to get my laptop checked out… Every time I hit the “t” key it gives me two t’s….  And I since I type so fast, (that’s a joke!)  I’m two or three words past the typo, and have to go back and correct it… What a pain! Well, I must have partied too much this past week, for I gained back 4lbs! UGH! Now I’ll have to work diligently to lose those 4lbs and more before Christmas! I won’t be able to resist all the goodies that are around at Christmas… I’ll try, but I’m a sucker for those goodies! And then I’ll get back on the wagon when I head to S. Florida…  My blood sugars are continuing to go downward, and I think in about a month, they should be back to normal…  Someone asked me how I was doing the other day, and I replied, “not too badly for someone who has taken chemo for 13.5 years!”  Yes, that’s how long this saga has gone on… And I thank the Good Lord all the time for allowing me to be around to watch my older kids become parents, my youngest get his doctorate degree, and grandkids… I have great friends that I love sharing time with… And it also has allowed me to be married for 44 years to my beautiful bride, that I’m not supposed to talk about here! (please don’t tell her I did so!)  OK… Van Morrison takes us to the finish line today with his song: Into The Mystic…  I love Van Morrison’s music through the years…  I hope you have a Manfred the Wonder Dog Wednesday, and Please Be Good To Yourself!

Chuck Butler

December 15, 2020 

* IP in the U.S. drops like a rock! 

* Gold gets sold on Monday, rallies back today! 

Good Day… And a Tom Terrific Tuesday to you… I was looking at the calendar yesterday trying to figure out when I will be taking my annual winter vacation. I believe I’ll start it on Dec. 22^nd, and return on Dec. 31^st..  I know, I know, I’m retired, there’s no such thing as “vaction” any longer… But, by now, you should have figured out that I’m BIG on Tradition… And I’ve always taken a winter vacation at Christmas, so I’ll keep calling it that for as long as I continue to write.  People are getting their virus vaccines already… I said yesterday, that I thought that the drug companies rushed the drug through testing. But I had read, and should have believed it, that the drug companies had already done the bulk of the leg work on this new drug, since Corona viruses have been around for some time now…  Oh, and then there’s this… in the Swine Flu of 1976, more people died from the vaccine than the flu, according to Twitter…  Hmm…..  I’m back to the Smooth Jazz Christmas station this morning, and this morning I’m listening to: Getting Ready, by David Benoit (it’s from a Charlie Brown movie!)

OK… we’ve already talked about two very important topics… my winter vacation, and how I’m not lining up for the vaccine, just now…  If my oncologist tells me that they have run tons of testing on people with cancer, and it’s OK, then I’ll offer an arm…  But only then!

The dollar rallied back a bit yesterday, as the currencies had reached some levels they hadn’t seen in years, and I’m sure it triggered some profit taking…  The Dollar Index, which yesterday morning was 90.50, ended the day at 90.70…. It was a day for the dollar, folks… Gold ended up losing $12.30 and Silver lost 8-cents on the day.  The price of Oil gave up the $47 handle, and the Aussie dollar (A$) gave back about ½-cent…  So… the dollar bugs have inched out from the wall board, and tested the markets, and they couldn’t have gotten this urge to test the markets, from the Data Cupboard…  Industrial Production saw a huge drop in November, as I said it would, so it wasn’t data that gave the dollar bugs any reason to test the markets…  

But maybe the dollar bugs were kicking their heels together and celebrating the electoral college’s announcement that they had confirmed a victory for Joe Biden…  Funny, thing, I don’t hear anyone  crying about the electoral college this year….   And that’s all I have to say about that!

The price action in Gold was something… Every time Gold began to rise it would be hit with a ton of short sells, and bring the price back down. Gold actually climbed to $1,841 (up $14) before finally giving in to the “sellers”, to close at $1,827.20…  

In the overnight markets… The dollar bugs have been ushered back behind their wall boards and we’re back to pushing the dollar down, with the currencies, metals and Oil…  Gold is up $18.80 this morning, and Silver is up 50-cents…  And the Dollar Index, which yesterday morning was 90.70, has weakened to 90.56 this morning…  So, forget about yesterday, that’s was water under the bridge… Today is going to be a good day for the asset classes that are anti-dollars! 

I had a dear reader ask me to say something about the Swiss franc… So here goes… The franc has gotten in line behind the euro, to take liberties against the dollar… Safe havens are out these days, and so that label on currencies like euros, francs and yen, aren’t involved with their respective rises VS the dollar…  As long as this is a real bonafide weak dollar trend that’s beginning, I believe we’ll continue to see the franc perform nicely… 

Oh, and one more thing regarding the currencies… I read yesterday that the investment flows into China are soaring once again, and that’s the reason the Chinese renminbi is seeing its price get pushed higher on a regular basis by the PBOC…  Something to think about! 

Well… what have we here?  This was taken from the folks at www.wallstreetonparade.com  And I’ll let them go first before I comment. Take it away Pam & Russ Martens! “Using the New York Fed’s own annual reports to obtain the data, we can report that the New York Fed’s Trading Desk has grown from $576 billion in holdings of domestic securities as of December 31, 2008 (at the peak of the last financial crisis) to $6.59 trillion as of December 9, 2020. And according to the New York Fed’s most recent financial statement, its Trading Desk’s domestic securities holdings have spiked by $15.9 billion in just the past week.”

Chuck again… So, let me see if I’ve got this right… The NY Fed, is supposed to be the regulatory arm of the Fed, but now they’ve got a trading desk, that trades with the Casino Banks the NY Fed is supposed to regulating?  Tell me that’s not true, Chuck! Please tell me that’s not true Chuck!  Well, I hate to spoil your ham and eggs, but it is true, and I believe that this is all going to end up in tears…  This arrangement can’t possibly work out to everyone’s satisfaction… Either the NY Fed goes all in on their trading desk, which it appears they have already, and forgets about regulation… Or.. .they bulk up their regulation and forget about trading…  Guess which one you think is going to be head and shoulders above the other one? 

Let me take you back to 2007/ 08….  The NY fed was supposed to regulating the Casino Banks back then too… And look what happened…   These Casino Banks need a new sheriff in town, one that kicks some rear and takes names later! I really don’t know why our elected representatives allow this stuff to go on. Either they are aware but feel they are helpless to do anything, or… they don’t understand what’s going on… Wanna bet, it’s the latter of the two?  

OK… I was going through Twitter yesterday and came across this post by Sven Heinrich. Check this out!

“M1 money supply has increased yet another $210B in the week between Nov 23 and Nov 30 on top of the $500B the week prior, that’s over $700B in 2 weeks.

M1 Money supply of the United States has increased by 64.5% since the beginning of 2020.”

Chuck again… Are you kidding me? And where’s all that money going? Not to me! Not one red cent! So, who does it go to? Well, if you would have guessed: Zombie Corps  you would have one piece of the puzzle… I you would have guessed: The Casino Banks, you would have another piece of the puzzle, and the list would go on.. But you see other than the first stimulus checks that were sent months ago, and then were used to buy stocks by a good number of recipients, There’s been little for the regular people, like you and me, the middle class, to scrape from the barrel…

The cartel, I mean the Fed is trying their darndest to get inflation rising, folks… They have over 400 number crunchers and they can’t figure out how to get inflation rising… The Money Supply used to be a given for a rising inflation… But no longer, because the bulk of the money doesn’t get spent the way it used to causing the velocity of money to rise, which IS the cause of inflation…  memo to the 400 number crunchers at the cartel, I mean the Fed…. “find a way to get money in the hands of spenders, and require them to spend it and not put it in their Robinhood account, to buy stocks.”

There’s got to be something of significance that you can talk about this morning Chuck that doesn’t involve you taking cheap shots at the Gov’t, the Treasury, or the Fed…    Wait! What? You want me to be nice to these people that have ruined the Goose that laid the golden eggs?  Give me a Break!

OK.. The U.S. Data Cupboard this morning will have Retail Sales for November, and I explained my dilemma to you yesterday, in that I just t don’t see how this data could be good, but the BHI tells me otherwise…  So, I’m going to go against my own BHI, because I’m thinking that it’s just my wife’s spending and not the norm…. We shall see… in just a few minutes…

Yesterday’s Data Cupboard offering had Industrial production which went from 1.1% in Rocktober, to just .2% in Nov.   Capacity Utilization surprised on the upside and improved to 73% from 72.8% previously… This data set CAPU is really weak considering where it used to be… This data hit an all-time high in 1973 of 89… and last touched an 80 number in 2008… 

And do you know why this has gone the way it has through the years? I do, I do, I do, call on me Mr. Kotter!  CEO’s of big businesses started making BIG BUCKS, and to ensure they continued receiving the BIG BUCKS , they began to take profits that used to go toward buying new equipment, buying new desks, or expanding their footprint, to buying their company stock…  And until we ever get back to the way it used to be, if ever that is, our economy will never be what it was…  

Of course the amount of debt is also responsible for the weakness in our economy, and this was before there was a plandemic!  We as a country had only averaged 2.1% GDP for the last 10 years…. So, there you go…   No CAPEX (Capital spending) and too much debt…  And now stupid Govs. Of states that lockdown their economies! 

To recap…  It appeared to be a profit taking day in the currencies, as the dollar bugs inched out of the Wall boards to test the markets…  Gold never found a bid all day, and ended up down $12.30… Oil lost its hold on the $47 handle, and nothing, absolutely nothing, say it again, rallied on Monday, but dollars…  The Data Cupboard wasn’t kind to the markets, and probably won’t be today either!

For What It’s Worth… well… we haven’t heard from James Rickards in some time, so I thought it would be good to hear from him again. In this article he blasts MMT… You know the “Magic Money Tree” or as Jimmy Rogers calls it “More Money Tree”… Whatever it is that we call it, it spells disaster for our economy going forward. This article can be found here: Good News and Bad News – The Daily Reckoning

Or, here’s your snippet: “MMT has three basic tenets. The first is to treat the Treasury and the Fed as a single entity with a single balance sheet. Legally the two institutions are completely separate, but MMT insists that government can operate as if it were. This means merging Treasury and Fed operations into a single engine for spending, borrowing and printing.

The second idea is that citizens must accept dollars (whether they like it or not) because you need dollars to pay taxes, and if you don’t pay taxes, you’ll go to jail. In effect, the dollar is supported by the barrel of a gun, to paraphrase Mao Zedong.

The third idea is that there is no practical limit to how much debt the U.S. can issue. The U.S. debt-to-GDP ratio today is about 130% (up from 106% last year). But, MMT cheerleaders point to Japan’s ratio, which is over 250%, as proof that the U.S. can borrow a lot more.

These ideas are all badly flawed. Japan is not a good test case because the Japanese buy their own debt (the U.S. relies on foreign investors), and the Japanese economy has barely grown for 30 years (try that in the U.S.).

You can operationally merge the Fed and Treasury, but once it becomes apparent to markets that you are monetizing all the new debt, confidence will erode, rates will climb and this pyramid scheme will collapse.”

Chuck again…  Longtime readers already know about how Japan finances their debt, as I’ve written about that for years now… Many times!  And like Rickards says, “do we want to be like Japan?”  I hardly think so, folks… 

Market Prices 12/15/20: American Style: A$ .7536, kiwi .7072, C$ .7847, euro 1.2160, sterling 1.3392, Swiss $1.1289, European Style: rand 14.9650, krone 8.7286, SEK 8.3778,  forint 292.59,  zloty 3.6578,  koruna 21.6744, RUB 73.29, yen 103.90, sing 1.3337, HKD 7.7521, INR 73.48, China 6.5438, peso 20.16, BRL 5.0784,  Dollar Index 90.56,  Oil $47.19,  10-year .90%, Silver $24.42, Platinum $1,028.00, Palladium $2,373.00, and Gold… $1,847.00

That’s it for today… Today is the day that my dad would always bring home the Christmas tree… I have a younger sister, Terri, and today is her birthday, and as a young girl she thought that the Christmas tree was her birthday present!  So.. Happy Birthday Terri!   There are only 4 Butler siblings left of the original 7…  Rachel brought me a picture for my wall board of pictures, of me holding Evie when she was just hours old…  I proudly pinned it up the next day! Man did I suffer some sticker shock when I went to check the price of those Tregar pellet smokers… I was going to buy one for a house warming gift for Alex, but decided to get him a gift card to put toward one when HE can afford to buy one!  I forget what I paid for my Big Green Egg smoker, but that was for me! HA! And I was working back then and had cash flowing in… not just out!  Well, Christmas is only 10 days away, have you gotten everything for everyone you wanted? I have… neener, neener, neener! HA!  I used to take a day during my Christmas vacation and go shopping alone…  but that was back when getting around wasn’t a chore for me, now I do it all online… just like the deep state wants me to!   Come to think of it I had better get to thinking about this year’s Christmas letter that a traditionally send out on Christmas Eve… Beegie Adair is playing on her piano, Rudolph the Red Nosed Reindeer as we head to the finish line today… I hope you have a Tom Terrific Tuesday, and will Be Good To Yourself!

Chuck Butler

 

December 14, 2020

*The dollar continues to weaken VS currencies

* It’s a Monday, Monday can’t trust that day for Gold… 

Good day… And a Marvelous Monday to you! Well the BIG weekend for my beloved Missouri Tigers, didn’t go as hoped, but… While the football team got pummeled, the unranked Tigers basketball team upset #6 ranked Illinois, in their annual Braggin’ Rights game… My kids, and grandkids all came over to watch the basketball game with me, and a good time was had by all… Especially, watching little Evie, wolf down some dear sausage… Uncle Jerry couldn’t tear the sausage in small pieces fast enough for her! So darn cute! Kathy came home from S. Florida last night, In two more weeks she’ll be heading back! Only this time, with me! We’re heading into the home stretch to Christmas… My favorite time of year…  Ray Charles greets me this morning with his soulful song: You Don’t Know Me

Well, I tried yesterday to get caught up with my reading, emails, etc. I get sent so many things to read, that sometimes I feel like they are piling up… I didn’t get through many of them, as I had other things I had to get done, but…. I did read the article I’m going to highlight in the FWIW section today. And I’m sure you will want to read it too, as it highlights something that I’ve talked about in the past… Asking the question, Does the Trust Co. for the ETF GLD actually have the physical metal to back the ETF holdings like they say they do?     There was some shady business goings on there at the Trust Co. and you’ll be able to read all about it below, so stay tuned, same letter, same writer…

Well, when I left you on our Tub Thumpin’ Thursday, the Aussie dollar(A$) was within spittin’ distance of 75-cents… And shortly after signing off the A$ pushed past 75-cents and now is trading well into that75-cent handle.  The New Zealand dollar/ kiwi, rallied alongside the A$, and kiwi is now within spittin’ distance of 71-cents! In September, kiwi, was trading around 66-cents… So, it’s been a slow climb, but one that has been quite Steady Eddie.

The euro has been moving higher in recent weeks, on the fact that the European Central Bank (ECB) is doing everything they can to keep the dream of a one currency, several countries coming together, going…  And while that doesn’t seem to be the REAL reason for the euro’s upward move recently, it isn’t… I’ve told you before a few times, that in a true weak dollar trend, it matters not what the problems for the other currencies may be, they will rally as a result of investors, selling dollars… That includes the Japanese yen, British sterling, and so on…

Speaking of the British pound sterling… I’m suspected a real problem coming up for sterling, given the problems with agreeing on a BREXIT departure Trade agreement.  There were reports a month or so ago, that the negotiators had told PM Johnson, that he should get the champagne ready to pop the corks and celebrate… But then nothing came of that, and now it appears to be a non- agreement instead… The time limit is coming up for this transition… The transition (sometimes called the implementation period) will end on 31 December 2020. It cannot be extended beyond that date. 

What does it mean for the U.K. if no agreement is signed? The U.K. would have no Trade agreement with the Eurozone… And that’s going to cause major problems folks…  So, watch out here…

Do you know what else expires on 12/31? The free passes on mortgage and rent payments… I don’t know what it would be like to not know whether or not you were going to have roof over your head, but I do know that can’t be good for one’s health… Stress, nerves, fears, etc.   You know, it’s the government’s fault we’re in this mess…  Economic lockdowns, etc.  But I’m not going there today… Man did I stir up a hornet’s next last week with my opinion and well… I don’t feel like getting 100’s of emails telling me how stupid I am, again…

OK, back to the markets… Gold lost $2.90 on Thursday, and then gained it back on Friday gaining $3.50, to close at $1,839.50. Silver traded opposite of Gold, gaining 4-cents on Thursday, and losing 4.5-cents on Friday…   There’s been a lot said and talked about regarding Gold’s future, with the emergence of Bitcoin…  I don’t know… let’s see… I can hold a Gold coin in my hand, put it in my pocket, and push come to shove, I could spend it if I needed to.   I’m just saying…

In the overnight markets… The dollar continues to weaken VS the currencies, but… Gold is down $14 in the early trading today. It is a Monday, you know Monday, Monday can’t trust that day… But I thought we were through with those Monday takedowns?  I guess not… But last Monday we saw weakness in Gold in the early trading and that got turned around for a nice upward gain for the day. So… maybe… because one never knows! 

The Dollar Index has fallen to 90.50, folks…  The index has really taken a ride on the slippery slope in the last two months… And with every day that goes by, and we see this kind of weakness, it confirms my thought that we’ve entered a new weak dollar trend… 

The Big News from Friday, was the announcement by the FDA that they had approved an emergency use for the Pfizer vaccine… And yesterday, I read where the trucks loaded with vials of vaccine were seen leaving en-masse, from their Michigan home address.. .Health workers will be the first in line to receive the vaccine, that needs to be in two shots, separated by 21 days with the Pfizer, vaccine, and 28-days with the Moderna vaccine. 

So, Bully  for us, our drug companies went to bat for us, and delivered…  Now, I guess we’ll have to see what the side effects are, because…. These vaccines were rushed through the testing phases, and I’m skeptical as to how much testing was actually done.   But then that’s just me, always skeptical of things like this…  Why can’t I be more happy-go-lucky?  Why can’t I just take for granted what I read and am told? 

The price of Oil has bumped higher to a $47 handle. I guess the rollout of the vaccine has Oil traders giddy…  Hold on there partner… It’s going to take some time before we get the economy started up again…  I think when the businesses begin to open and so on, that it’s going to be like when you let your car sit for a long time in the winter, and you go to start it, and all you hear is click, click, click… Dead battery…  I’m just saying… 

OH, well,,  Let’s see what else?  Hmmm….  This will be a very busy week with the U.S. Data Cupboard, but with nothing coming from it today…  Tomorrow we’ll start off, with Industrial Production and Capacity Utilization, both for November. I believe that we’ll begin to see the rot on the economy’s vine really get exposed in these reports… And on Wednesday, we’ll see Retail Sales…   I have to say that while I want to say that this data will be weak, I have to question that thought because the Butler Household Index (BHI) indicates that Retail Sales will be stronger in November than in the previous month… 

To recap…  The end of last week saw little to no movement in the metals, and only a handful of currencies continuing to move upward VS the dollar…  Chuck thinks that from now until the end of the year, the dollar will be pushed lower and lower…   BREXIT transition ends 12/31, and so far no trade agreement… This could weigh heavily on sterling… 12/31 is also the end date on the free passes on mortgage and rent payments… That could turn out to be quite ugly folks…  And what place in line will you be for the vaccine shots?

For What It’s Worth…  Well, I built this up above, and now it’s time to reveal the article that everyone should be fearing to read if they own GLD…  This is about whether the Trust Co. for GLD has the phsical Gold to back the ETF or not…. And the shady business going on with the Trust Co., and it can be found here: GLD 10-K omits BoE gold holdings data, GLD CFO left 1 day before financial year-end (bullionstar.com)

Or, here’s your snippet: “The latest  financial report and statement has recently been submitted to the U.S. Securities and Exchange Commission (SEC) by GLD Sponsor, World Gold Trust Services (WGTS), the fully-owned subsidiary of the World Gold Council.

Alarm Bells

Covering the financial year to 30 September 2020, this GLD 10-K should be raising alarm bells at the SEC given that the Principal Financial and Accounting Officer (CFO) who signed off on it, Brandon Woods, had only been in the CFO position at the GLD Sponsor for one day prior to GLD’s financial year-end. Woods was appointed on 29 September 2020.

To put it another way, the GLD Trust Sponsor’s previous Principal Financial and Accounting Officer (CFO), Laura Melman, resigned from her CFO role at WGTS on 29 September 2020, one day prior to GLD’s 30 September financial year-end.

If anyone knows of a CFO joining a high-profile listed ETF Trust one day prior to financial year-end and then signing off on the annual accounts, please let us know. Likewise, for a CFO of a high-profile listed ETF Trust leaving one day prior to financial year-end and not waiting for financial year-end. None of this, to say the least, is normal.

The World Gold Council would have you believe that everything was hunky-dory, with the 8-K (departure and appointment) form submitted by WGTS to the SEC on 29 September 2020 stating that Melman’s “departure did not arise from any disagreement on any matter relating to the operations, policies or practices of the SPDR® Gold Trust”. However, it also said that Woods’ appointment on 29 September was “effective immediately”, i.e. one day before GLD’s financial year end.

Why did the CFO resign one day before financial year end and not put her name to the annual 10-K submission to the SEC? That fact that the 8-K form was rushed out on 29 September appointing the new CFO “effective immediately” shows that the departure of Melman was abrupt, and that it triggered the rushed appointment of Woods on the same day “effective immediately”.

Perhaps in the world of fly-by-night companies, CFOs depart and appear a day before financial year-end, but this is not the norm when applied to the world’s largest gold-backed Exchange Traded Fund (ETF), a Trust which as a reminder, on 30 September 2020 claimed to hold 40.8 million ounces of gold worth US$ 77 billion with custodian HSBC Bank plc in London, and a Trust whose only asset is “allocated gold bullion”.”

Chuck again…  Yes, this all sound too fishy to me, folks…  Someone should be sounding an alarm to get in there and audit the Trust Co. But they won’t…  I’m just staying completely away from GLD, I’ve always had my doubts about it, and now? ….

Market Prices 12/14/20: American Style: A$ .7570, kiwi .7114, C$ .7854, euro 1.2157, sterling 1.3407, Swiss $1.1285, European Style: rand 15.0026, krone 8.7043, SEK 8.3925, forint 290.70,  zloty 3.6805,  koruna 21.6354, RUB 73.06, yen 103.71, sing 1.3323, HKD 7.7514, INR 73.45, China 6.5457, peso 20.04, BRL 5.0645,  Dollar Index 90.50,  Oil $47.04,  10-year .93%, Silver $23.96, Platinum $1,028.00, Palladium $2,367.00, and Gold… $1,825.70

That’s it for today…   Well the college football conference Championships will be played this Saturday, while other teams in each conference finish out their schedules… That means my Beloved Missouri Tigers will travel to Starkville Miss, to play Miss St. And the Missouri Basketball team will open its conference schedule with highly ranked Tennessee… I heard from my longtime friend, and former Big Boss, Frank Trotter last week…  He’s thoroughly enjoying retirement, climbing mountains, hiking, etc.  I wish I was able to me active… I’m just saying. But I’m not, and life goes on…  Well, this Thursday will be a Big Day for youngest son, Alex, as he will close on his house…  And former colleague, and someone I’ve known since he was quite young, Dane Moody, tied the knot this past weekend, So, congrats Dane & Loraine! ! And welcome to your new phase of Life!   I have no doctor appts. this week, fingers crossed, and won’t have any until the 28^th!  Again fingers crossed, because with me, the wolf is always at the door!  Linda Ronstadt takes us to the finish line today with her song: Blue Bayou…   ( I love how she sings this song!)  I hope you have a Marvelous Monday, and Please Be Good To Yourself!

Chuck Butler

December 10, 2020 

* currencies trade in tight ranges on Wednesday

* JPMorgan wants to be a Bitcoin Billionaire! 

Good day… And a Tub Thumpin’ Thursday to you! I really wanted to keep sleeping this morning… I think it’s going to be one of those days where I sleep most of the day. This happens about once a month, and it’s been awhile since I felt this way.  It’s an accumulation thing with the chemo I take daily… The bad part is that today is supposed to be a fairly warm day with sunshine… UGH!  I’ll attempt to get out side, but… Like the great reliever, Big Lee Smith, when he would come out of the bullpen, “I’m so tired”… HA!  Sniff-n-The Tears greet me this morning with their great song: Driver’s Seat… 

A quick side bar here…  Quite a few years ago now, I mentioned that song and band in the Pfennig, and later in the day, I received an email from a fellow who said he had been the bass player for the band! We traded emails back and forth, and then I never heard from him again… 

Well…  Wednesday was not kind to Gold & Silver… Apparently, the “sellers”  decided that Gold’s rally needed to be squelched…  I was doing some reading yesterday, and did a quick check on the metals and saw Gold down even more than it closed on the day… So, it did rally back a bit, but still ended the day down $31.00, to close at $1,839.30, and Silver had the same trading pattern as Gold, and ended the day down 61-cents to close at $23.91… 

The currencies traded in a very tight range once again, thus stalling their appointment with lofty levels…  Even the Chinese renminbi, which had seen daily appreciations lately, saw a pullback. But… The Aussie dollar (A$) is within spittin’ distance of 75-cents this morning…  That’s pretty impressive, for a country that is in a saber rattling dispute with China, and has near zero interest rates…  

In the overnight markets, Gold has held pretty Steady Eddie, and is only down 60-cents today…  The Dollar Index has strengthened since yesterday, and sits this morning at 90.96… But the move upward is small and like I said, the currencies have been trading in tight ranges since Tuesday… 

One more thing on Gold…  Our old friends at JPMorgan (NOT!) issued a report that basically  said that Gold is going to suffer for years, because of Bitcoin…  Ok, let me get this straight… Not only does JPMorgan lead the price manipulators in their raids on Gold’s price, now they are attempting to scare investors out of Gold?   

The GATA folks had something to say about JPMorgan’s thoughts, and I’ll let them take the conn here for a minute… “What is JPMorgan’s motive in touting cryptos and disparaging gold? Is it to enlighten investors or scare them out of monetary metals and into a currency that governments might defeat more easily?

Maybe a hint is provided by the $900 million fine recently imposed on the investment bank for manipulating the monetary metals and Treasury bond futures markets.

With its libertarian inclinations, GATA wishes the best for all attempts to increase competition in money. But investors in cryptocurrencies should know just as investors in gold do that more than pestilence, famine, and war, governments hate competition with their money and that, as a result, all monetary alternatives have their risks.”

Chuck again… And then they included this link to a video by a comedian about Bitcoin that I think you’ll thoroughly enjoy…  so, here’s the link: 

https://www.youtube.com/watch?v=UG7zLhEWanc

Well, well, well, what have we here?  As usual, Pam and Russ Martens have found some very interesting information for us… The entire article can be found at: www.wallstreetonparade.com  but I’ve shortened it, here… Remember the repo fiasco a year ago?  Ok, Pam and Russ take it away, :” Last Thursday the Financial Stability Oversight Council (pronounced F-SOC) released its 2020 Annual Report. Those tend to be tediously boring reports that tell one nothing meaningful about the true state of the Wall Street mega banks, so we just got around to perusing the document yesterday. Mixed in with the typical snooze-worthy minutiae was a bombshell that made us sit up straight in our chair. Those cumulative repo loans totaling more than $9 trillion to the trading houses on Wall Street that the Fed had been making from September 17 of 2019 – months before the onset of COVID-19 anywhere in the world – didn’t actually stop in July as the daily data from the Fed made it seem. The New York Fed simply went dark and stopped reporting how many billions of dollars a week it was funneling to miscreant mega banks on Wall Street as food pantry lines grew by miles across the U.S. and 3.3 million small businesses were forced to shutter.” -wallstreetonparade.com

Ok, Chuck again…  Recently I talked about the Repo fiasco, and a dear reader asked me if I thought it was still ongoing? And I replied “yes”…  I thought it probably would be because if the banks had funding problems 6 months before the plandemic hit, they sure still had them a year later… 

And now I was proven to be correct in my thought!   But doesn’t this just get you so fired up that you want to go yell at the walls?  This ticks me off, period! But what can a poor boy do to alert everyone of what’s going on in the financial world, other than write about it and hope that everyone feels the same way and forwards the letter to everyone on their contact lists?

OK, calm down Chuck… These dolts will get what’s coming to them one day… You don’t cheat, lie, and destroy an economy, without having to face the consequences eventually…  Yeah, but I may be long gone by that time! I want to see them suffer now!  Ok, the good Christian in me says I went too far there, so I apologize… 

Where is Congress on this? I thought that we, as the people, of this Empire of Debt, elected these dolts to represent us, our thoughts, our wishes for the country?  Oh, Ahem… Psst… Chuck, that’s so old time… This is the new millennium, things don’t work like that any longer…  Well, I’m holding on to my “old time views”, and think that it’s Congress’s job to rein in the Cartel, I mean the Fed here… And that’s that! 

All right, I’ll talk about other stuff now… Just had to get that all out of my system…  The U.S. Data Cupboard today, has already given us the Weekly Initial Jobless Claims, and they were, drum roll please…. 853,000! I told, you that this week’s numbers would be larger because the previous week only had 3 days in which the unemployed could file their claims…  And from here I just don’t see this data set getting any better… 

We also already saw the color of the stupid CPI (consumer inflation), for Nov., and it was up .2% from a flat rate in Rocktober…  No great shakes here, but just for grins I went to www.shadowstats.com to see what John Williams says inflation is really printing, and… he says that inflation is really 4.5%…  And of course I’ve ALWAYS said that inflation is a personal thing, and to that, inflation can be higher or lower depending on your personal spending habits… 

To recap…  The currencies traded in a tight range again yesterday, marking two consecutive days of that pattern, but Gold got sold and ended the day down $31, with Silver also getting sold down 61-cents… The overnight markets haven’t seen any movement to speak of in both asset classes.  Chuck has major issues with JPM, and the cartel, I mean the Fed today, so hopefully you didn’t miss any of that, but if you did, please go back and reread, Chuck put his heart and soul into telling you these things, and it would be a real shame if you missed them!  hehehehehehehe!

For What It’s Worth…  Ok.. this article is very long, but…. A very good read, and I implore you to take the time to click the link below and read the article in its entirety…  This is Egon Von Greyerz of whom I’ve quoted many times before, talking about us repeating history… So… here’s the link, please make sure you go there and read it!  THE HANNIBAL TRAP WILL CRUSH GLOBAL WEALTH | Matterhorn – GoldSwitzerland

Or, here’s your snippet: “ Is the global investment world about to be caught in the Hannibal trap?

Hannibal was considered as one of the greatest military tacticians and generals in history. He was a master of strategy and regularly led his enemies into excruciating defeats.The trap that investors are now being led into has many similarities with Hannibal’s strategy in his victory over the Romans at Lake Trasimene in 217 BC.

Hannibal was a general and statesman from Carthage (now Tunisia) who successfully fought against the Romans in the Second Punic War.

THE BATTLE AT LAKE TRASIMENE

In 218 BC Hannibal took his troupes, with cavalry and elephants, over the Alps and into Italy. Hannibal enticed the Roman Consul Flaminius, and his troupes, in 217 BC to follow him to Lake Trasimene in Umbria. The Romans followed Hannibal’s troupes into a narrow valley on the northern shores of the lake. When the Roman troupes were inside the valley, they were trapped. They had the Carthaginians ahead of them, the lake on their right and hills on their left.

What the Romans didn’t know was that Hannibal had hidden his light cavalry and part of his army up in the hills. So once the Romans were locked into the valley, they were attacked from both ends with nowhere to escape.

Over 15,000 Romans were killed and 10,000 captured in a catastrophic defeat.

So what has Hannibal got to do with the present world? Well, it is pretty obvious. It is all about being led into a fatal trap without even being aware.

This is clearly the biggest wealth trap in history. Hannibal couldn’t have done it better.

Billionaires, millionaires and ordinary investors have all been sucked into a honeypot believing that they have real wealth based on sound foundations.

What they don’t realize is that they will in the next few years be ambushed by what to them is an invisible enemy.

This will initially involve total debasement of the currency, whether it is dollars, euros, pounds or yen. No they can’t all go down together against each other.

But they will all go down in real terms. Real terms means measured in the only money which has survived in history – GOLD.

The route there will not be straight forward. As currencies collapse, we will most likely first see hyperinflation. That could temporarily boost asset prices in nominal terms but certainly not in real terms.

There will also be an implosion of both the debt bubble and the asset bubbles in stocks, bonds and property.”

Chuck again.. I know that the snippet was long… but it’s only a small piece of the entire article…  And a very good read!  You know, publishing guru, Bill Bonner always relates today to events in history, and I like that, for if you don’t know history, you’re bound to repeat it! 

Market Prices 12/10/20: American Style: A$.7499, kiwi .7051, C$ .7839, euro 1.2110, sterling 1.3284, Swiss $1.1259, European Style: rand 15.0074, krone 8.8320, SEK 8.4592,  forint 293.25,  zloty 3.6516,   koruna 21.7280, RUB 73.53, yen 104.44, sing 1.3371, HKD 7.7511, INR 73.62, China 6.5352, peso 19.90,  BRL 5.1326,  Dollar Index 90.96,  Oil $46.22,  10-year .92%, Silver $24.12, Platinum $1,017.00, Palladium $2,348.00, and Gold… $1,839.70

That’s it for today and this week… A long week for me… or so it seems. Maybe it’s just that I’m so amped up about this Saturday, when the college sports will be happening in Columbia Mo. And I think back to when I was younger, and how you would have to tie me down to keep me from being there! Both Football and Basketball teams have BIG games..  Well, I’ve awakened a little more, and maybe I won’t have to sleep all day!  A good cup of steaming coffee should do the trick! Still no word from Roger Dean Stadium about Spring Training… I’m becoming very afraid that I won’t be invited to watch the games. UGH! Usually by now, I’ve paid for my season tickets, and don’t have a worried mind, but not this year… Go figure, it’s 2020!  Ok…  Midnight Oil takes us to the finish line today with their song: Beds Are Burning…  I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and will continue to Be Good To Yourself!

Chuck Butler

 

December 9, 2020

* Currencies trade in a tight range on Tuesday

* Gold gains $8 on Tuesday, and gives it right back today… 

Good Day… And a Wonderful Wednesday to you! Before I go any further, I have to question the sanity of the folks at the Olympics who approve and remove sports… I read yesterday, that the Olympics have sanctioned the approval of “breakdancing” as an Olympic sport… Are you kidding me? That’s where you say, “no we wouldn’t kid you, you’re our favorite goat!” HA!  Well, I for one, can’t wait until the next Olympics to watch me some breakdancing… NOT!  Well, I had to go out yesterday for a bit to a store, and had to wear my face rosary… There’s no scientific proof that wearing a mask keeps you from getting the virus… As I say, the virus gonna virus…  And the powers that be know that the way to get people to comply with the wearing of face masks, they get the businesses to require customers to wear one… I go three places… The hospital, my doctor’s offices, and the cleaners… And all three won’t let you in the door without a mask… I find this to be a real attack on my civil liberties… But, it is what it is, and life goes on, right?  Robin Trower greets me this morning with his song: Bridge of Sighs… Robin Trower was the lead guitar player in Procol Harum…

OK… I know I’m going to see hundreds of people tell me I’m full of B.S. for what I said in the intro today, but so be it… I’ve never, in my life been afraid to say what’s on my mind… And to me, that’s what makes this letter so good to read… You get another point of view that you don’t get from everyone else…  

It was really a nothing happened day in the currencies yesterday… The Dollar Index fell to 90.85, from 90.93 in the morning…  But the euro at the end of the day was trading in the same clothes it had on early on Tuesday morning. (1.2120)… Gold gained $8.30 on the day to close at $1,871.30, and Silver gained a wooden nickel, no wait, just a plain nickel, to close at $24.63…  I’m of the opinion that these two metals would have gained more on the day, if not for “sellers”…  I thought I would be nice to the price manipulators today, and just call them “sellers”… 

You could get me to really go off on the CFTC (commodities regulator) if you egged me on… Ok, that’s enough, I’ll do it!  Why on earth do we have a commodities regulator that doesn’t regulate?  Isn’t this what got us into some deep dookie with mortgage bonds, that were rated AAA and shouldn’t have been? The ratings agencies fell down on the job, and we really didn’t need a ratings agency to tell us a bond was AAA when it should have been A at best…  The CFTC is about as useful as a pay toilet in a diarrhea ward…  And I’m being nice about that description! I could have said, that they were as useful as mudguards on a turtle…   Ok, now that’s funny…  And this isn’t a funny subject, Chuck, so try to stick with the program will you?

In the overnight markets last night and early this morning, there’s some slippage going on… The euro is weaker, but still above 1.21, and Gold is getting sold by $10.90, and Silver is getting sold by 10-cents…  I have to say that I’m somewhat surprised at this move in the metals… Sure there’s never a one-way street of rallies… There’s got to be some rain to make the sunny days even more enjoyable. But… in my mind, I think that these two metals should be firmly on the rally tracks now, with nothing to bring them down…  

Think about that for a moment… We have vaccines… We have refrigerated places to store the vaccines in each location… All we need is the green light from the FDA, and then we start getting back to, I’m not going to say normal, because that will never happen, but back to spending money, and when that happens, inflation will begin to rise… And when inflation is rising, what asset class do you want to own?  Precious Metals… i.e. Gold & Silver… 

Ok… I had a few readers send me a note asking me to explain the scenario I presented last week as the reason for the smashing of Gold’s price…  OK, it’s like this… please take notes, because I won’t explain it again… Investors buy futures contracts to buy Gold at a specific price and expiration date…  And so it was for the December expiration date… But the problem for the COMEX was that I don’t think they had the stock of Gold it would take to make good delivery on all those contracts that had piled up for the December expiry.  So… basically it was a signal to the price manipulators to “do their thing”, and bring the price of Gold down dramatically, to get all those buy contracts to sell, and give up getting Gold at their specified price…  And it worked….  There, I hope that explains everything, other than the fact that the smashing of the Gold price should never have been allowed, but that’s a different story…

Alrighty then… The BIS (Bank for International Settlements), the central bank of Central Banks, if you will, issued a very interesting statement late last week… Let’s listen in to what’s on their minds, eh?

“BIS from continuing this trend of warnings, and today the Basel-based organization did just that when in its Quarterly Review publication it cautioned that the surge in financial markets following COVID-19 vaccine breakthroughs and the U.S. election has left asset prices increasingly stretched.

Sounding surprisingly similar to Goldman, which as we reported earlier today issued an almost identical warning, when it observed that its sentiment indicator is now +2.0 standard deviations above average… …which has left positioning extremely stretched and represents a 98th percentile reading since 2009.

The BIS’ quarterly report on Monday noted how credit markets and some of world’s biggest stock markets had surpassed their pre-pandemic levels despite the significant degree of uncertainty that still remains over the pandemic as it continues to spread.”

Will anyone listen to them? Nah… why would stock jockeys pay attention to this bank that’s in Switzerland? They don’t have the pulse of the Robinhood traders…  Or for that matter, anyone else, but I thought it was interesting enough to see that there is an institution out there that thinks that stocks have gotten out of control…   Oh, and JPMorgan says that stocks will get a $1.1 Trillion boost next year….   So, you’ve got Goldman and the BIS saying “be careful”, and JPMorgan saying “drive fast and take chances!” 

I don’t know if you’ve noticed or not, but the recent performance of the Russian ruble has been quite impressive… I think back to a FWIW I had a month or so ago, where I quoted the Fin Min, from Russia, saying that the ruble would come back from the then level of 77 to today’s level of 73.90… And the ruble still pays interest! The price of Oil hasn’t budged since I told you that I thought it had gone about as high as it was going to go, for now, a couple of weeks ago. So, the ruble, krone, real, peso, and even sterling has been getting a lot of love from traders lately, and one would immediately think that the price of Oil has to be going upward, right? But it isn’t… So, these rallies are all about selling dollars, folks… selling dollars… selling dollars… 

The U.S. Data Cupboard yesterday had the 3^rd QTR Productivity, and it showed that productivity had weakened in the 3^rd QTR from 4.9% in the previous quarter, to 4.6% in the 3^rd QTR…  I had said yesterday that I just didn’t think that the working from home crowds are being very productive, but then I don’t know, really…   But the data confirms that…   We also saw the Unit Labor Costs, for the 3^rd QTR… And while they remained negative at -6.6%, labor costs were increased during the quarter, as the 2^nd QTR Costs were negative -8.9%… But as with everything else these days, I truly expect this to get worse again in the 4^th QTR…

The Data Cupboard today is pretty barren, with only a couple of lower tiered reports to print, that I doubt anyone even notices…  And then tomorrow, we get back to the regular fare, of the Weekly Initial Jobless Claims, which might be skewed to the upside, given the previous week only had 3 days to file in it…

For What It’s Worth…  This is something that a dear reader sent me that he received and thought I should see it, and I in turn, thought you should see it…  Remember last fall 2019, when I kept harping about how the Casino Banks were being bailed out daily by the Fed in the repo markets?  Well, this article addresses that, and more, and it can be found here: Trump regulators leave a warning for the Biden team | NewsChannel 3-12 (keyt.com)

Or, here’s your snippet: “As they head out the door, Trump-led financial regulators are warning the incoming Biden team that a little-known yet critical corner of Wall Street is broken.

Their concern centers on the short-term funding market, which provides money to businesses, local governments and market players. When this market breaks down, the entire economy can screech to a halt.

That’s what happened during the 2008 financial crisis — and the pandemic caused it to collapse again.

“Recent events, including the financial fallout from the pandemic, have confirmed that potentially significant structural vulnerabilities remain” in short-term funding markets, the Trump-led Financial Stability Oversight Council (FSOC) warned late last week in its final annual report.

FSOC, created by the 2010 Dodd-Frank law, is a team of regulators from the SEC, Fed, FDIC and other agencies charged with identifying risks to the financial system. It’s chaired by Treasury Secretary Steven Mnuchin. Next year, assuming she’s confirmed by the US Senate, the council will be led by Janet Yellen, whom President-elect Joe Biden tapped as Mnuchin’s successor.

The council did not offer any potential solutions, however — leaving that task up to the incoming team.

“Our short-term markets don’t seem to be able to function without a very significant government backstop. We need to fix it,” said Jeremy Kress, a University of Michigan professor who researches financial regulation.

That won’t be easy, because regulators and experts don’t seem to know exactly why this corner of the financial market keeps breaking down.

“There is still so much we don’t know about these markets and how they work,” said Kress. “That’s a big part of the problem,”

But there’s little doubt short-term markets are vulnerable to bouts of market stress.”

Chuck again… Now doesn’t that just give you a nice warm and fuzzy feeling that the regulators don’t understand how the markets work?  I’m beside myself on this one folks… Shaking my  head in disbelief, for sure!

Market Prices 12/9/20: American Style: A$ .7482,  kiwi .7o80, C$ .7826, euro 1.2109, sterling 1.3456, Swiss $1.1250, European Style: rand 14.9293, krone 8.7328, SEK 8.4829,  forint 294.34,  zloty 3.6532,   koruna 21.6606, RUB 73.47, yen 104.10, sing 1.3355, HKD 7.7515, INR 73.63, China 6.5300, peso 19.75,  BRL 5.1022,  Dollar Index 90.85,  Oil $45.77,  10-year .94%, Silver $24.46, Platinum $1,026.00, Palladium $2,360.00, and Gold… $1,860.40

That’s it for today…  Wanna get into the Christmas Spirit? The next time they show the movie: The Grinch That Stole Christmas, with Jim Carrey, make sure you tune in! I sat there laughing and getting filled with goo thoughts while watching it, again…  When my kids were young, every year around this time, we would take to to the movies to see the newest Christmas themed movie… I remember Dawn repeating the line from Prancer, over and over… “Prancer is in the shed by my house”…  Ok… I’ve got to go pick up the groceries I ordered 2 days ago!  I just pull up and they load my car and I go home… Don’t have to wear a mask!  Del Shannon takes us to the finish line today with his song: Runaway…   Now, there’s a great 60’s song!  I hope you have a Wonderful Wednesday, and will please Be Good To Yourself! 

Chuck Butler

 

December 8, 2020

* Gold & Silver turn around on Monday… 

* The dollar continues to get sold… 

Good Day… And a Tom Terrific Tuesday to you!  I got the good word from the wound center doc yesterday, She told me not to come back for 3 weeks, and that by then I should be all healed up. I told her that would be a good thing, since I’m leaving a few days after that visit, and won’t be back until it gets warmer here…  I always get the same response from anyone I tell that I go to S. Florida for the winter. They always say, “I’m jealous”…  Well, I always tell them, save your money, build critical mass and then you’ll be half-way there!  These are people that are always much younger than me… So they have plenty of time to work toward that goal!  When I was younger I always thought that I would retire in San Diego… The weather there is incredible… But the costs of living there just got way out of hand, and so I changed my direction… People from the upper East Coast, and California, have been moving out of their respective states to better environments economically, that is, in Florida and Texas, and some other southern states… Makes sense to me… The problem I see with this though, is that if too many of them move to a new state and bring their voting habits with them, it could upset the applecart of the new state…  I’m just saying…   Ok.. This morning, I’m greeted by my all time fave song from Chicago… They greet me with their song: Hard Habit To Break…

Well, what I was afraid of happening with the euro seems to be going on…  Sunday night going into Monday morning, saw the euro pull back… Maybe it was profit taking and maybe it wasn’t… The pullback wasn’t of great magnitude, and so I put it down to profit taking… But then all day Monday, the euro rose again, and was trading at 1.2150 at one point in the day, only to see it have another pullback in the overnight markets…  So, you may fool me once, but not twice…  And I’m going to put these pullbacks on intervention, to throw down speed bumps for the euro…  But in the end, they won’t work, because, unless we’re taking about unlimited money printing, the markets used to always have deeper pockets than any Central Bank… but again, that was before Central Banks learned that they could turn the spigot of money printing on and not worry about it… 

What a great surprise from the metals yesterday… Ok, it was Monday, Monday, can’t trust that day, when I signed off yesterday morning, and Gold was down $8…  But by noon, the shiny metal has rebounded and was up $24 for the day, which make it a $32 turnaround… And Silver pushed through its early looses of 43-cents to show a gain of 31-cents on the day, or a 74-cent turn around! Gold closed at $1,863, and Silver closed at $24.67….   Again, don’t let the drops in price that are caused by the price manipulators, bother you… Just hold onto your Gold & Silver, folks… and pass it on to your kids and grandkids when your time comes…   With explicit instructions to not sell…   

In the overnight markets, the euro has seen the pullback once again as described above, but the Dollar Index sits this morning at 90.93, still weaker than yesterday. Gold & Silver are moving upward this morning, as the early trading has Gold up $4 and Silver up 9-cents. 

The BIG news this morning is that in Britain, they are rolling out the mass distribution of the virus vaccine. The Pfizer version of the virus is being used here…  The world is watching to see what side effects come of this new drug…  We may not know of any side effects for some time…  I find that the roll out of this new vaccine in the U.K. is interesting…  Why there? And why not here?  You know how I always say that what happens in the U.K. usually shows up on our shores about 6 months later?  Well, in this case I’m thinking that 6 months would be too long a time to wait for “our turn”…  

I read the other day that once given the vaccine, a person would receive a “card”, that identifies them as a recipient of the vaccine… That’s really kind of dumb in my book… why not just put a stamp on each person’s forehead, that said, “IAGP”….    (I’m A Guinea Pig)… 

I don’t know why, but the Pink Floyd song, Us and Them, keeps coming into my head, with this line: “haven’t you heard, it’s a battle of words, and most of them are lies”….  

Man, I just learned that one of my longtime heroes had died at age 97… Chuck Yeager the famous pilot that broke the sound barrier, back in the day… He was a decorated fighter pilot in WWII, and I loved reading his book about his life…

OK, back to regular programming…  Well, the U.S. Data Cupboard yesterday, had the Rocktober print of Consumer Credit (read debt), and there was a big surprise here… Consumer’s in Rocktober, paid down their credit card debt, by $5.5 Billion, to the lowest level its been since May 2017…  However, the revolving debt was still rising, and added $12.7 Billion in Rocktober…  

IF…. and that’s a BIG IF, consumers are doing the right thing and paying down their credit card debt,  that would be a BIG Plus for their respective balance sheets… But the economy? The economy relies on personal consumption/ spending… And with consumers paying down their debt instead of spending more on trinkets and stuff they don’t need, the economy will continue to weaken…  

Today’s Cupboard only has the stupid Productivity print for the 3rd QTR… I expect this to remain Steady Eddie with the 2nd QTR’s print of 4.9%… But since I’m no longer in the working environment, being retired as I am, I no longer get to see how hard people are working… I would suspect that those working from home, have seen their productivity go down… But that’s just a guess on my part. 

To Recap…  The Vaccine gets a rollout in Britain… Chuck Yeager died… Oh, and Gold & Silver had a great day yesterday, for the the first time in over a month, the metals rallied on a Monday, Monday, can’t trust that day! And it appears to Chuck that the Europeans are intervening in the currencies, to keep the euro from soaring…   And the Data Cupboard is really disappointing, as usual… 

Before we head to the Big Finish today, I have this for your viewing… 

I was going through Twitter and Parler yesterday and found this interesting bit of history of the dollar’s value since the Fed was shoved down the throats of U.S. citizens, by Woodrow Wilson in 1913, this should be shown on mass media TV stations, and get everyone riled up about what the cartel, I mean the Fed has done to our dollar through the years… Check this out!

What is $100 (USD) worth in 1913 over time?

1913: $100

1923: $57.89

1933: $76.15

1943: $57.23

1953: $37.08

1963: $32.35

1973: $22.30

1983: $9.94

1993: $6.85

2003: $5.38

2013: $4.25

2019: $3.87

And still, we allow the cartel, I mean the Fed, to work their “magic”… 

For What It’s Worth…   Well, as I’ve explained before a few times, but will again now, whenever things begin to get really hairy in the markets, and world, I turn to publishing guru, Bill Bonner, to see what he has to say about what’s going on… And today, that’s what I’m going to do… So, here’s Bill most recent take on things, and it can be found here: Republicans and Democrats Have One Common Goal – Rogue Economics

Or, here’s your snippet: “Every advanced society has an elite. Its patricians. It’s Aristoi. Its propertied classes. Its gentry or its Hidalgos.

They are the lucky ones. The smart ones… the educated ones… the ones with the Ph.D.s, the formulae, and the secrets. 

They’re also usually the ones with the money.

They design the bridges, write the laws, and count the votes. They also write computer code… and God knows what else.

In ancient societies, the elite claimed to have some inside track with God. It – the elite – used religion to stay in power. The religion explained each caste’s duties and privileges. One ruled. The others obeyed. 

Today, the elite uses science.

We don’t need to wear masks, said the experts in January. Ooops… No, we must all wear masks, say the experts now.

“The Earth is freezing” was the climatological alarm in the 1970s. Now, “it’s burning up” is the gospel according to today’s experts. 

There will be no more financial crises “in our lifetimes,” forecast Janet Yellen, Ph.D., three years ago. Now, she says we must mobilize Congress and the Federal Reserve to fight the crisis she said wouldn’t happen. 

We must do battle with the Sunni Muslims in Iraq, said the experts; the Shi’a are our friends. Now, we must fight the Shi’a in Iran; the Sunni are our friends. Or vice versa?

In the past, only the elite could read and write. This gave them a special source of knowledge and power. They could open up their sacred books… and there, they would find wisdom and secrets forbidden to the masses. 

Then, when the invention of the printing press made literacy more widespread, the elite set up schools to teach people what to think and do.

Catholic schools taught obedience to the Pope. Shiite Muslim schools did the same for their Ayatollahs. Secular schools required students to pledge allegiance to the flag. 

Like all things in nature, elites age and decay. Power corrupts them. Wealth weakens them. Over time, each generation becomes more grasping and less competent.

 

We saw last week that when Team Trump yields to the Biden Bunch, the new White House elite will be a bit more feminine and darker-skinned.

But in the ways that matter, they will be of the same tribe, drawn from the best schools and privileged pasts, where they were taught the new faith – that they have a right to rule… relying on their superior knowledge of (social) science. 

Then, they made their way up through the ranks, joined political parties, took jobs in Washington, moved from lobbying to think tanks to staff positions on Capitol Hill. And there… they found what they were after – power.”

Chuck Again…  Oh my… what have we done? Our Empire of Debt, is about to be expanded again. You know, you can only put so much air in a balloon, before it pops… So, the same thing goes for the debt bubble…  I’m just saying… 

Market Prices  12/8/20: American Style: A$ .7422, kiwi .7040, C$ .7816, euro 1.2121, sterling 1.3358, Swiss $1.1243, European Style: rand 15.0094, krone 8.7515, SEK 8.4323,  forint 296.54,  zloty 3.6784,   koruna 21.7600, RUB 73.90, yen 104.08, sing 1.3368, HKD 7.7506, INR 73.55, China 6.5330, peso 19.82,  BLR 5.1260, Dollar Index 90.93,  Oil $45.44,  10-year .92%, Silver $24.66, Platinum $1,033.00, Palladium $2,332.00, and Gold… $1,867.70

That’s it for today…  A little shorter today, as I didn’t have a lot to say today, which is a good thing sometimes! HA!  Well, my beloved Missouri Tigers will play the mighty Georgia Bulldogs on Saturday in Columbia, Mo. It’s a mighty big test for the upstart program at Mizzou…  And then later that day, the Missouri Basketball team will play their Braggin’ Rights game VS Illinois… So, a day of black and gold for me! I’ll be digging around in my closet for smaller clothes, as I’ve dropped some weight lately… And that’s a good thing!  The Blue Jays take us to the finish line today with their great song: Maybe…  The Blue Jays were two members (John Lodge & Justin Haywood) from the Moody Blues, so the Blue Jays music sounds like Moody Blues…   I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

 

 

December 7, 2020

*Currencies finish last week with a rally… 

* Gold & Silver try to rally back… 

Good Day… And a Marvelous Monday to you! What a football game for my beloved Missouri Tigers on Saturday VS rival Arkansas! It was tough to watch until the end… Back and forth, back and forth with over 1,000 yards of total offense for the game…  I was here watching it alone… So when I was screaming at the officials that it wasn’t a targeting offense on Mizzou linebacker Nick Bolton, nobody could hear me…

You know, I miss the days, where friends, and family would come together to watch our Missouri Tigers football games…  Saturday night, I watched Clemson win their game and then go to the corner of the visitor’s stadium, where their fans would be sitting if they were there, and sing their fight song… College football has the best traditions, and I was glad to see Clemson continue with them…

Today is December 7th, Pearl Harbor Day…  Our first day of infamy, unfortunately…  Supertramp greets me this morning with their uber-great song: Hide In Your Shell… 

Ok… Well, Friday was another good day for the euro, as the single unit moved upward, and passed the 1.21 level. Like I said last week, this upward move in the euro has got to be a real pain in the rear of the Eurozone officials, who are struggling with the Club Med countries once again…  For new readers, I coined the phrase Club Med countries, to signify the members of the euro, who reside in the south… Italy, Greece, Portugal, Spain…  These semi-socialist countries have given away the store to their citizens over the years, run up debts to their eyeballs and past them, and continue to cry about the requirements the northern countries of the euro put on them for more bailouts… 

Longtime readers may recall me telling you all, years ago, about how Goldman Sachs, aka Lola, had schooled Greece on how to hide their debts, and by doing so, Greece was able to continue to borrow at the same borrowing costs as Germany…  Now, someone with an ounce of sense should have been able to figure out that there was no way Greece should have the same borrowing costs of Germany, but that didn’t stop the Big Boys from selling Greek debt…  to the folks that should have done their homework, but didn’t.  

OK… Enough of that talk… The dollar bugs are really hiding behind the wall boards these days, afraid to come out of hiding, and quaking with fear that they are about to be relegated to behind the wall boards for a long period of time.  Longtime fave economist, Stephen Roach, told his audience a couple of months ago, that the dollar was ready to be weakened by a large amount…  And of course, I told you a few weeks ago, that what we could be seeing is the beginning of a new Weak dollar trend… 

And the Dollar Index is at 90.99 this morning, which means that it has fallen further, as last week it was 91.30 ish at last check…  There’s something brewing here folks… and it’s not coffee! 

And then there was the famous Chuck talk about how all these debts these countries around the world would have to be dealt with, and the only way to deal with them these days, now that the countries have all tried to inflate them away, with no success, is to default on them…  And that fiat currencies around the world would suffer, with Gold & Silver replacing them. So, what gives with all this talk about a long term weak dollar trend coming into place?

Well, I never said that these defaults would take place in the next year, or whenever, just that they would take place eventually… So, that’s not going to stop another weak dollar trend from taking place…  In fact, a very weak dollar might just be what the cartel, I mean the Fed, Treasury and Gov’t are looking for… And apparently, they are going to get their wish! 

The thing that you, me and the guy down the street need to know about a weak dollar trend, is that our buying power evaporates…  Things will cost much more, and the companies that sell things, will do their best to downsize whatever it is you’re buying to lessen the cost… But in the end you get less, for less… and that’s a no-win deal…  The loss of buying power, to me, has always been like a TAX!

But what’s a country to do when they have zero bound interest rates, negative real interest yields in their Gov’t Bonds, and a darn plandemic still hanging over our economy like the Sword of Damocles… ? They have to take whatever the markets tell them to take, and in this case it’s going to be a very weak dollar…

So… getting back to the markets from late last week…  We saw something that you don’t see everyday on Thursday and Friday… Thursday Gold closed up $10.50, and Silver closed down 4.5-cents… And on Friday, Gold closed down $3.20, and Silver closed up 11-cents…   So, Gold closed the week at $1,839, and Silver close the week at $24.26…   While $1,839 isn’t $2,000, it is a far cry from what was going on earlier in the week, when the daily chopping of Gold’s value was going on… And now that the price engineering takedowns to get the Dec. Long contracts out of their positions so that deliver didn’t need to be made to them, from stock that wasn’t there… And that so the price manipulators could book their profits on their short positions… We can get Gold & Silver back on the rally tracks. 

Speaking of short positions…  Ed Steer tells me in his Saturday letter, (www.edsteergoldsilver.com) that it would take more than 160 days of Silver production to equal the ounces of Silver that have been sold short. And it would take over 90 days of Gold production to equal the ounces of Gold that have been sold short…   And here’s where I have a problem that the continues to be ignored by the CFTC (commodities regulator), and that is… How can Gold or Silver that hasn’t even been pulled out of the mines yet, and who knows maybe never will be, be sold short before it is above ground? 

Riddle me this Batman… Are these short trades a result of customers thinking that the metals will be worth less when they are mined? Or, are they simply used to engineer price takedowns that are used to line the pockets of the metals traders in the Casino Banks like JPMorgan?

OK, I’ve got to move on… This is a Monday, and the past 4 Mondays we saw major price takedowns in Gold & Silver… Right now in the early trading today, Gold is down $8.30… UGH!  Mondays… Monday, Monday, can’t trust that day…  (Mamas & Papas) And Silver is down 45-cents, and has been pushed back below $24 once again… 

I talked last week about why investors should just ignore these interruptions to the Gold & Silver rally…. And then the good folks at GATA sent me this blurb that I think is important for you to read, so here you go!

“Nick Barisheff of bullion dealer and fund manager BMG Group reviews gold leasing by central banks and says they do not have the gold they claim to own. Neither do gold exchange-traded funds own the gold they claim to have, Barisheff adds.

Barisheff can’t predict when the longstanding manipulation of the gold price will end, but he says it should not discourage investing in gold, since over the longer term gold has been outperforming all assets and since U.S. treasury bonds can’t provide a safe haven when the U.S. dollar is steadily depreciating.

The manipulation will break down eventually, Barisheff says, and when it does gold investors will get a bonus.”

Chuck again…  OK…  The GATA folks also sent me a note highlighting a speech that James Rickards gave to the Australia’s Gold and Alternative Investments Conference, last week, where Rickards told the audience that the only course Central Banks have is to devalue their respective currencies VS Gold, and that investors should front-run the Central Banks…   

That’s an interesting take on what’s going on, isn’t it?  I’m just saying… 

OK… I listened to another of Grant Williams and Bill Fleckenstein’s podcast series titled: The End Game…  They interview different investment gurus about what they see for the End Game…  And this one had the famous investor, James Rogers, as their guest…   This was one of the best ones I’ve heard…  

One of the ideas they discussed centered around Japan… And how the Bank of Japan (BOJ) had basically cornered the Japanese Gov’t Bond (JGB‘s) market, (sort of like the cartel, I mean the Fed has done with Treasuries) and the question arose of what would happen if the BOJ just decided to tear up all those JGB’s and say, they didn’t have to be repaid?   Well, that’s just another form of default folks… And then who’s ever going to buy your Gov’t debt again?  

But do I see these knuckleheads that run Central Banks doing this? Of course I do, because they never consider what happens after they ruin economies…   

OK, back to reality…  Let’s hope that the scenario I just described never becomes reality… Especially, here in the good ‘ole USA…

The U.S. Data Cupboard last week had some surprises in it… First and foremost, the Jobs Jamboree on Friday for the November employment figures showed that 245,000 jobs were created, which was far below the expectations of 432,000…  And there were no shenanigans played by the BLS with only 6,000 jobs added, which was a far cry from their 346,000 they added out of thin air, the month before!

The Weekly Initial Jobless claims were interesting…  In a 3-day, shortened Holiday week, there were 712,000 initial claims filed…  712,000 for 3 days!  Just for fun, let’s average those 3 days out and then see what the number would have been for 5 days… 1,186,666…   OK, I know that we probably can’t do that, but I wanted to make sure you noticed that the 712,000 were only for 3 days… 

I have an article for you in the FWIW Section today about how these Claims numbers are questionable… So, stay tuned, don’t touch that dial! 

We, as a country still have over 20 Million people on continuing claims… And that number has been coming down, but only because receivers of unemployment benefits run out… And then they are no longer counted as unemployed…  Genius right? I mean, who on earth thought of that way of counting the Unemployed? 

We also saw Factory Orders for Rocktober drop from 1.3% to 1.0%…  Just wait until next month when we see the Nov. report… 

This week’s Data Cupboard doesn’t have much for us, with the highlight of the week being the stupid CPI (consumer inflation) report for last month… Other than that, we have Consumer Credit (read debt) due to print this morning, and other things that aren’t quite as important the rest of the week.

To recap… It was a good week for the currencies, led by the euro, to gain VS the dollar, but the overnight markets have seen some pullback, so we’ll have to see what today brings us… Chuck is convinced that we’re in the beginning of a new weak dollar trend…  Gold & Silver rallied last week after the first two days of takedowns, but are both down in the early trading this morning… It is a Monday…  

And before we head to the Big Finish today, I wanted to mention that I heard on the nightly news that thieves are cutting the catalytic converters from cars and stealing them for the palladium that’s in them… Toyotas seem to have the most palladium in their Converters…  Copper will be the next to get ripped out and stolen from properties, and the the price of copper has been rising…   Just another Public Service Announcement for you! 

For What It’s Worth…  Well, longtime readers know that I don’t trust any of the employment numbers from the BLS…  And now I have to question the Claims numbers each week too. According to this article that can be found here: U.S. Jobless-Claims Data to Come With Disclaimer on Accuracy (msn.com)

Or, here’s your snippet: “The closely watched weekly reports on U.S. claims for unemployment benefits will soon come with a disclaimer that the figures aren’t accurately capturing how many people are actually claiming benefits, after a government watchdog found the figures to be “flawed.”

The latest jobless-claims report said 20.5 million people were claiming benefits across all unemployment insurance programs in the week ended Nov. 7. This figure includes programs ranging from regular state unemployment insurance to special pandemic programs providing extended benefits and help for those not traditionally eligible for unemployment assistance.

But if a person files for six weeks of benefits in a given week, for example, that’s typically counted as six separate people in the total, instead of one person. The GAO report said this method of counting is normal for the Labor Department, and before the pandemic provided a good proxy for the actual number of people claiming benefits.”

Chuck again… Wait, What? They’re telling me that the numbers are flawed the wrong way? I don’t believe that one minute!  I do believe that the numbers are flawed, but not the way they think they are!  I’m not buying that argument one iota! 

Market  Prices 12/7/20: American Style: A$ .7392,  kiwi .7020, C$ .7806, euro 1.2108, sterling 1.3280, Swiss $1.1221, European Style: rand 15.2388, krone 8.8070, SEK 8.4388,  forint 297.17,  zloty 3.6857,   koruna 21.8900, RUB 74.08, yen 104.22, sing 1.3376, HKD 7.7503, INR 73.85, China 6.5306, peso 19.89,  BRL 5.1547,  Dollar Index 90.99,  Oil $45.75,  10-year .94%, Silver $23.82, Platinum $1.021.00, Palladium $2,353.00, and Gold… $1,830.80

That’s it for today… One week down, being alone during the day, another week to go… It was a good weekend for my Missouri Tigers, who won both their football game and basketball game! This coming Saturday, will be the Braggin’ Rights Game, which used to be the hottest ticket for a game in the city… Missouri VS Illinois… I went to that game every year for about 10 years, and only saw my Tigers win a couple of those games… And now because of the plandemic, only a few thousand fans will see the game in person… UGH!  I head to the wound center around noon today, hopefully this is all going to end soon…  Oh! my oncologist visit last week was good… So, I have that going for me! HAHAHAHA!  Time to go…  Blackfoot takes us to the finish line today with his song: Highway Song…  (a good long one to finish out the letter!)  I hope you have a Marvelous Monday, (can’t trust that day!) and will Be Good To Yourself! 

Chuck Butler

December 2, 2020 

* The euro & the metals have a great day! 

* Chuck has an early Christmas gift for you! 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler