Category: Uncategorized

June 22, 2020

* Currencies give back their gains VS the dollar

* Gold heads to $1,750, will it be met with resistance? 

Good day… And a Marvelous Monday to you! What a day Father’s Day was for me yesterday, as my kids came over and did everything as far as preparing our meal, cleaning up, picking up all the paraphernalia that goes with young kids and a swimming pool, and then we gathered for a two pictures, one of me and my 4 grandkids, and one with me and my 3 kids… Darling daughter, Dawn, had wanted a single picture of the kids and grandkids together, but the best laid plans of mice and men took over… And it turned out to be a beautiful day with no rain during the day, as was forecast by the weather people! Our trip to Columbia on Saturday, turned out to be great! We did all the things we wanted, ate the food we wanted, and had many laughs… Thanks to sons Andrew & Alex for putting that together, and thanks to Grace, aka Boss Taco, for driving us! Van, the man, Morrison greets me this morning with his classic rock song: Brown Eyed Girl…

Well, what appeared to be a mini-rally that could potentially turn to a multi year selling of the dollar to begin last week, ended the week in the shambles as once again, another false dawn was upon us, and the dollar bugs are back in control… You know something… I used to be able to tell when things were going to change for a long trend, just by the fundamentals, but traders don’t use fundamentals any longer, and they certainly don’t use the charts either! Instead, as I’ve said many times in the past couple of years, it’s all about sentiment… Trader sentiment is all that matters any longer, when it comes to deciding when a long term trend will begin or end. And since I’m not a mind reader, per se, I’m as worthless as a pay toilet in a diarrhea ward, these days… And that’s another reason why I believe the currencies are dead men walking…

Gold on the other hand is a bird of a different feather, and here fundamentals still play a big part in determining which direction Gold goes… That and the whims of the price manipulators.. Gold gained $20.90 on Friday, to close the week at $1,743.80… There are so many fears out there right now that we’re about to slide right back into another wave of the pandemic, and that has Gold pushing the envelope to cross the $1,750 level that I believe and I could be wrong, but I believe that is the level in which Gold will start to move higher again, after crossing $1,750 and holding that figure.

We’ve seen Gold climb toward the figure of $1,750 a few times in recent trading sessions, only to be knocked back down by the price manipulators, who, must see what I’m seeing with the $1,750 level… Gold is going to test the waters of $1,750 today, as it’s up $3.50 in the early trading… Which means that at this moment Gold is within $3 bucks of passing $1,750… Will the price manipulators knock it back down once again, or will this be move we’ve all been waiting for?

Well, I did a lot of reading on Friday… And one thing that I kept seeing was that U.S. citizens are falling way behind on their house payments, rents, student loans, auto loans, etc. May’s percentage of non-payers of house payments was larger than April’s! Of course, there’s no worry that these people will be foreclosed on… I’m sure the Gov’t will come up with some sort of plan to allow them to keep missing payments until the pandemic is over, which if all the fears come true, and we are bound to see a second wave of the pandemic, could mean that it would be quite a few months that the lenders don’t receive their payments… That’s a scary thing to think about folks… Because if the lenders don’t receive payments, then the mortgage bonds these loans were rolled into, will begin to default…. Uh ,Oh… spaghetti O’s

And guess who owns a bulk of those mortgage bonds? Pensions… As if Pensions needed another hickey to go with the ones they already have!

You know what I didn’t read about on Friday? All those economists that said that the recession the U.S. economy is in, would be V-shaped… I doubt that they’ve all given up the ship on that thought, but the stragglers have to feel as though they would be opening mouth and inserting foot!

Another thing that I find interesting is that the Fed seems to be pulling in the reins on their alphabet soup listing of programs to buy troubled assets… The Fed’s Balance Sheet for the week ending June 17th, had actually shrunk by $74 Billion… So, what does this information mean for the stock jockeys, and Corporations? Well, one week doesn’t make a trend, but the overall feeling here is that the Fed IS pulling in the reins and that would be a bad thing for the stock jockeys and Corporations… I’m just saying…

Do you think that Fed heads see the writing on the wall, and they don’t want to be stuck holding worthless paper? Ok, we’re giving the Fed Heads more credit than they deserve! I told you before about a cartoon, that makes me laugh out loud… It’s of the three blind mice with shades on, and walking canes, and on their shirts it reads Fed Reserve… I don’t know of anyone or anything that best describes the Fed heads than that!

Speaking of holding worthless paper… I was reading my fave letter last night, Things That Make You Go Hmmm… by Grant Williams, and Grant did a big write up on just how ridiculous all this buying of a stock of a company that’s filed bankruptcy…  But the stock jockeys keep piling in on the stock, that the company itself says in their fine print, that the stock could end up was worthless paper…   Talk about stranger than fiction! 

You know, I could really go on and on this morning regarding the missing debt payments by Americans…  The way I see it, is people are missing their loan payments and instead spending their money on buying stocks…  But I’m going to pass on carrying on regarding this, because, I know it would just get me in a tizzy. I’ll save my thoughts on this for another day when I’m on a roll and don’t care about going into a tizzy! 

Well Lola was back in the news on Friday last week…  For all of you new to class Lola is what I call Goldman Sachs, because what Lola wants, Lola gets, it’s usually that say for Goldman Sachs…  So… Did you hear that Lola raised their outlook on the price of Gold?  Basically, because of their views of currency debasement and the problems for the economy due to the pandemic, they raised they raised their three, six and 12-month Gold price estimates to $1,800, $1,900 and $2,000 per ounce from $1,600, $1,650 and 1,800 per ounce, respectively. 

I guess Lola believes in the $1,750 level being the launching pad for a higher Gold price, like me! 

Last week ended with St. Louis Fed president, James Bullard, speaking… So I checked it out because Mr. Bullard can, at times, say things that make you go Hmmm…   But on Friday, Mr. Bullard became our new “Mr. Obvious”, when he said, “I definitely don’t think we’re out of the woods,” said St. Louis Fed President James Bullard. 

Really? you think? What gave it away, Mr. Bullard, please enlighten us! And then I thought, maybe, just maybe, cause you never know, James Bullard is a Pfennig reader?  And he gets all his ideas about the economy from me? HAHAHAHAHAHAHA! As if! 

The U.S. Data Cupboard is really lacking this week… I just don’t like weeks like this when you have search and scrounge for data prints…  Today’s Cupboard has the Chicago region manufacturing index, and Existing Home Sales… So, noting that will move the markets, that is unless Traders change their minds on something! 

For What It’s Worth… I really get ticked about some things and some things I just don’t care because there’s nothing I can do about them. This is one of those cases where I really get ticked off reading stuff like this, and so to spread the joy, (sic) I thought it best to use it as the FWIW article today… This is the wonderful letter: Wall Street On Parade, and from their website. No hints to what this is about you’ll have to check it out! But you can find it here: https://wallstreetonparade.com/2020/06/as-goldman-sachs-and-jpmorgan-face-criminal-probes-barr-fires-top-prosecutor-tries-to-replace-him-with-banks-former-lawyer-jay-clayton/

Or, here’s your snippet: “Shortly after 9 p.m. last evening, the U.S. Attorney General, William Barr, stunned prosecutors in the Southern District of New York with the announcement that their boss, Geoffrey Berman, was stepping down as U.S. Attorney in that District and would be replaced with the sitting Chairman of the Securities and Exchange Commission, Jay Clayton, who lacks even a shred of criminal prosecution experience. What Clayton does have is a lot of experience representing Wall Street’s largest banks, like Goldman Sachs and JPMorgan Chase, both of whom are currently under intense criminal investigations by the Justice Department. Clayton was a former partner at Wall Street’s go-to law firm, Sullivan & Cromwell, which is currently representing Goldman in the criminal case and representing JPMorgan in various matters.

Geoffrey Berman, U.S. Attorney for the Southern District of New York
The breaking news last night went downhill from there. Several hours after Barr’s announcement, Berman announced that he had not resigned from his job and had no intention of leaving his post until his replacement had been confirmed by the U.S. Senate – which could take months. There is also no assurance that Clayton would actually be confirmed, since some Republicans and Democrats believe that Clayton has been a lapdog for Wall Street in his current post.

Even more problematic, Clayton’s family has ties to an opaque company called WMB Holdings, described by David Dayen in The Nation magazine like this:
“This company and its affiliated partners (Delaware Trust Co and CSC) are conduits for creating shell corporations and other sketchy vehicles used in tax evasion and money laundering. Public Citizen found apparent links between these companies and Mossack Fonseca, the notorious Panamanian law firm at the center of the Panama Papers scandal.”

Chuck Again…  I personally think that all of government is infiltrated with ex-Goldman Sachs employees, and could be the reason we as a country run to help Wall Street every time Wall Street gets their tail caught under the rocking chair! 

Market Prices 6/22/20 American Style: A$.6867, kiwi $.6448, C$ .7362, euro 1.1210, sterling 1.2392, Swiss $1.0522, European Style: rand 17.4165, krone 9.6529, SEK 9.4340, forint 309.11, zloty 3.9706,   koruna 23.7958, RUB 69.39, yen 106.93, sing 1.3952, HKD 7.7498, INR 75.79, China 7.0713, peso 22.54, BRL 5.3117, Dollar Index 97.46,   Oil $39.50,   10-year .69%, Silver $17.84, Platinum $821.04, Palladium $1,915.89, and Gold… $1,747.50

That’s it for today…  Not as long as usual for a Monday, but I wasn’t sitting around reading articles all weekend! Well, I received some good news last Thursday. The wound center doctor proclaimed that my wound on my left leg was “healed”!  Now I need to keep it from swelling and splitting open again, and I didn’t do a good job of keeping the swelling down this weekend, so I need to work on that starting now!  Little Evie was the star of the day yesterday. She just makes me smile, and laugh…  I love it when she’s here!  Well, Usually I would be telling you that I had been left all alone again, as my wife is traveling. But… not this time! Alex is here, although he works during the day, but I least I have someone to talk to and cook dinner for!  Ok… time to get my feet up!  Deep Purple takes us to the finish line today with their song: Smoke On The Water…  a classic rock song for sure! I hope you have a Marvelous Monday, and will Be Good To Yourself! 

Chuck Butler

 

 

June 18, 2020

* it was a nothing day for the currencies and metals… 

* Chuck wants to know why we are erasing our history? 

Good Day… And a Tub Thumpin’ Thursday to you! Once again, on a Tub Thumpin’ Thursday, my visit to the wound center is later in the morning, which gives me plenty of time to get this out before getting ready. So, good morning to you! I’ve always feared there be a day like today, when the markets didn’t move the previous day, and nobody said anything that would qualify them as dolt. No wait! Fed Chairman Powell spoke yesterday, so I get to nit pick his words, but other than that, nothing, absolutely nothing else to talk about today… that has always been in the back of my mind, when I reported to work early in the morning, and pulled up my screen and saw a blank page… I would fear that one day, I wouldn’t have anything to say… Then what? Well, I could be like CNN, and make stuff up… And then apologize for my error the next day, as if it was no big deal. I chose CNN randomly it could have been any of those news stations! So, I’ll give it my best attempt… I’m greeted this morning by Van “the man” Morrison, with his song: And It Stoned me…

OK… well like I said above, the markets didn’t move but an inch and an inch there yesterday… The Aussie dollar (A$) did love about 1/2-cent, so if that gets your motor running this morning, so be it! Gold didn’t really move much either… And in the overnight markets things didn’t change…

Gold has dropped $3 in the early trading today, and the stock futures are down big, so this could end up being an ugly day, for market prices… 

We have N & S. Korea eyeing each other at the DMZ, we have India and China shooting at each other in a border war, we have the whole world in deep dookie after shutting down their collective economies. The IMF actually called the current recession, “not anything ever seen on earth previously”, and I sit here and watch Gold tick downward…  Makes no sense to me whatsoever… 

So, yesterday, I lobbed that grenade from left field for you to read and get hopping mad about… And said that I would pay good money to be at the committee meeting on the Hill yesterday, where Fed Chairman Powell was to testify… Well, things were going along as usual yesterday, with softball after softball being pitched to Powell… But then… Sen Pat Toomey, a Republican of Pennsylvania, said the Fed’s corporate bond purchases were unnecessary and were distorting market signals.

“I don’t see us as wanting to run through the bond market like an elephant…snuffing out price signals and things like that,” Powell said. “We just want to be there if things turn bad for the economy,”

Wait! What did he say? He’s buying Corporate Bond Fund ETF’s, and now Corporate Bonds and he doesn’t see this a distorting the market? Corporations that would have been filing bankruptcy about now, get life breathed into them, curtesy of the Fed printing press, and tax payers of course!

I think we’ll be able to come back in a few months maybe sooner, and see these same Zombie Corporations that took the money, still have to file bankruptcy, and then, will Powell admit their mistake? I doubt it… Later, Powell said the central bank wasn’t buying asset to make it easier for the U.S. Treasury Department to sell the increased debt. This is known as “monetizing the debt.”

“That is certainly not our intention,” Powell replied.

Yeah, right, and I have a pig that flies…. That’s all I’m going to say about his not intending to monetize the debt… In 2009, when the Fed first began to buy bonds, that’s exactly what I called then, and what I’ll continue to call it!

And then he probably got the whole shootin’ match of traders and economists laughing until they cried, when he tried to make us believe that the Fed does not focus on moving asset prices in either direction…  

So, all in all, it was just another day of lies, and deceit…  I’m not calling Powell a liar, per se…  But… “Just because something isn’t a lie does not mean that it isn’t deceptive. A liar knows that he is a liar, but one who speaks mere portions of truth in order to deceive is a craftsman of destruction.” ― Criss Jami 

The U.S. Data Cupboard has the Thursday Weekly Jobless Claims for last week, today… And they will show us the color of the May Leading Indicators Index, which in April was negative -4.4%…  This piece of data, along with Capacity Utilization are the only real, forward looking, pieces of data that we see… 

Friday’s Data Cupboard will really only have the 1st QTR Current Account Deficit for us… This one really will set up the 2nd QTR when all the money / debt creation began… So, to end the week, the markets will not be depending on the data to give them any indication which way to go…. 

Before we head to the Big Finish today, I have something I need to get off my chest… I want to know what’s with all the clearing out of our history? We are a country of people that are descendants of immigrants. Now those immigrants weren’t perfect. They made mistakes, but those mistakes led to us not making them ever again. And many years ago, people erected statues of men that they believed led us to a better life, or at least a better understanding of what not to do. And now all these younger people that have been brought up to not respect anything or anyone but themselves, are ridding the country of our history… The reason this is on my mind, is that the other day, the very first statue of Christopher Columbus was taken down here in St. Louis’s Forest Park. Like I said, he made mistakes, but they were mistakes that we learned from, right? And he was credited with being the first to find our country (the truth is out there). And we no longer can take our kids to the park and say, this is Christopher Columbus? Shame, on everyone that’s a part of all these statues being taken down. It’s our history, it may not always be the best example of what we came to be, but it’s our history! And now I hear that people want to take down the Abe Lincoln statue? God help us if we resort to that!

I know everyone is not going to agree with me on this, but this is how I feel, and that’s that!

To recap… it was a “nothing day” as far as the markets were concerned yesterday, no real movement in the currencies or metals, it is a day that Chuck always feared he would have to write about!  Chuck dissects some of the Powell testimony yesterday, in today’s letter, and then Chuck decides to get something off his chest… 

For What It’s Worth…  Recall last week when I told you how Hertz’s stock was soaring after they had announced Bankruptcy?  I just couldn’t believe that was happening, and that people were drawn to buy that stock.  Well, this article plays with that thought, as Hertz pulled the plans of a new stock offering, while they are in receivership, and can be found here: https://www.zerohedge.com/markets/bankrupt-hertz-kills-plan-sell-500-million-worthless-stock-following-sec-review

Or, here’s your snippet: “As if millions of Jefferies bankers suddenly cried out in terror and were suddenly silenced.

When last week Hertz announced its plans to sell up to $1 billion in bankrupt stock (subsequently trimmed to $500 million) to Robinhooders in an “At The Money” offering from its existing Shelf, there were two reactions i) this is the most insane thing ever attempted, although if it gets done it will be a truly historic outcome, one in which a bankrupt company will have turned over the bankruptcy process on its head funding itself in Chapter 11 not with a super-secured DIP loan but with worthless equity, and ii) where the hell is the SEC on this?

Finally addressing point 2, earlier today SEC chairman Jay Clayton told CNBC that the regulator was actually involved, and contrary to widespread expectations hadn’t decided to ignore what many said was clear daylight robbery from manic Robinhood investors. Moments later Hertz stock was halted for hours.

And now we know why: in an 8K published moments ago, the bankrupt car rental giant said that, following communication with the SEC, Hertz was “suspending” the $500 million offering and as a result “the Company is not currently offering any shares under the ATM Program.”

And so what would have been the greatest ever feat pulled off by a company and its aspiring investment bank, has been shelved indefinitely, as has Jefferies 3% underwriting fee… at least until Chesapeake or someone else tries to pull this magic trick all over again.”

Chuck again… You know, when I first began putting articles that made you think differently about stuff, in the Pfennig, this is the type of article that would have been front and center…  The absurdity of this whole idea just sends me off the cliff! 

Market prices for 6/18/20 American Style: .6870, kiwi .6444, C$ .7375, euro 1.1242, sterling 1.2572, Swiss $1.0537, European Style: rand 17.3607, krone 9.4935, SEK 9.3648, forint 306.75,   zloty 3.9741,   koruna 23.7140, RUB 69.62, yen 106.98, sing 1.3926, HKD 7.7499, INR 75.94, China7.0862, peso 22.37, BRL 5.2398, Dollar Index 97.13,  Oil $38.30,   10-year .71%, Silver $17.54, Platinum $821.90, Palladium $1,924.32, and Gold… $1,723.17

That’s it for today… There you go! The long awaited Shorter Pfennig! I can hear the shouts from the mountain top! HA!  Well, this Sunday is Father’s Day…  On Saturday, Chuck and his two sons, Andrew and Alex are heading to Columbia for the day, I believe that some burgers at Booches, and pizza at Shakespeare’s is on the docket!  That’s their Father’s Day present to me… Longtime readers know that I learned a ton from my dad, as I quote him quite often in the Pfennig…  I get a chill thinking about him…  And Pfennig Tradition calls for a Father’s Day poem at the end, so I’ll carry that tradition on today… The band, Poco, takes us to the finish line today, with their song: Bad Weather…  I’ve always enjoyed the sound of the band Poco… Ok, with that, I want to hope that you’ll have a Tub Thumpin’ Thursday, and will Be Good To Yourself!

Chuck Butler

I love you and I miss you, Dad,
and though you’ve passed away,
you’ll never be forgotten,
for I think of you each day.
If heaven celebrates this day
how special it will be.
A gathering of the many dads
upon our family tree.
Your father and grandfather
and great grandfather too.
How wonderful it is, if they
can spend this day with you.
 May you know how much I love you
though I’m here and you are there.
Happy Father’s Day in heaven
to the best dad anywhere!
~ By Ron Tranmer

 

June 17, 2020

* Currencies couldn’t hold their Monday gains on Tuesday

* Is Hong Kong really in a tight spot? 

Good Day… And a Wonderful Wednesday to you! I don’t know what we did to deserve this run of beautiful weather, but I’m not complaining! And I know that all good things must come to an end, and eventually that will happen here… The mornings are so pleasant that I can sit out on our deck and drink some coffee while listening to classical music… Soon the mornings will already be hot, and I won’t be able to do that any longer, but for now, it’s just a peaceful and pleasant way to begin the day! 3 of the 4 grandkids were here yesterday to swim. My sons helped me do a Big Job in our Tiki hut out back, so thanks to Andrew and Alex, with a helping hand from Grace… Graham Nash and David Crosby greet me this morning with their song: Southbound Train…

Well… I really don’t want to start the letter today with this HUGE story, but, with little else going on that’s new, I don’t have a choice… So, sit down, because this story is going to rock your socks! OK, remember back in September of 2019, when I kept asking the question about why did the Fed need to inject Billions of dollars of liquidity into the repo market? And these injections didn’t just stop in September, or Rocktober, or November, or December, oh, Chuck, stop it, they are still going on!

I kept saying that there was something up, with the banks that needed this liquidity… And then we learned that JP Morgan/ Chase (JPM) had withdrawn their funding, out of the blue, and that brought about the question as to why did JPM need their allocated repo money? Something was awry with the banks and nobody, except Chuck, was making a Big Deal Out of it…

When the economic shutdown came along, I would say at a very opportune time for the Fed, because now the Fed could blame the pandemic for all their money creation… Oh, did I tell you that the Fed’s Money creation has exceeded U.S. Treasury Tax Receipts in the last 12 months? So, where was I? Oh, they could blame all their money creation on the pandemic, to keep Congress from asking questions about why we needed to bail out banks again 12 years later?

But what If I told you that the Fed Heads were planning for a bailout of the economy before the Pandemic even showed up in China? You would say, “no way Chuck, that’s false news”! How could the Fed know they would need a bailout from a pandemic, before there was even a pandemic? Well, this is where this gets good, folks… The Fed planned a bailout because they knew the banks were hurting, and would need another bailout, and the timing of the pandemic was like manna from heaven for the Fed Heads…. Ok, I hear you saying, where’d you hear that?

Well, remember G. Edward Griffin, the author of the book The Creature From Jekyll Island? He sent me a note yesterday that said, “BlackRock, an investment manager of $7- trillion in stock and bond funds, revealed plans by the Federal Reserve for a bail out of financial institutions and corporations in August 2019, months before COVID-19 appeared and long before the public was aware of any financial crisis.”

You can read the entire article at: https://needtoknow.news/2020/06/blackrock-authored-the-federal-reserves-bailout-plan-before-there-was-a-crisis/?utm_source=rss&utm_medium=rss&utm_campaign=blackrock-authored-the-federal-reserves-bailout-plan-before-there-was-a-crisis

Now, if I were a Congressman, I would be hopping mad right now, and couldn’t wait to get Fed Chairman Powell back in front of the finance committee! But I’m not, instead I’m just a little old economics writer from a little river town southwest of St. Louis, Mo. And I’m still Hopping mad about this, that the Fed Chairman basically lied to us all for months, telling us that the repo problem was nothing to look at, and that the banks were solid…. Oh, wait, guess who’s going to Capitol Hill today to testify? None other than Jerome Powell himself!

OK, boys and girls, this is your opportunity to grill the Fed Chairman, will you do that, or just cow-tow to his fed speak, and throw him softballs? This is it… this is your Big chance, what will you make of it?  Your reelection depends on your performance today…  (wouldn’t that be great, if their reelection did depend on their performance today?) 

OK… no FWIW story today as this has to qualify for that, but only at the top instead of the bottom! The currencies lost ground to the dollar bugs again yesterday, one day up, next day down… Traders can’t make up their minds… Did you ever have to finally decide? Say yes to one and let the other one ride? There’s so many changes and tears you must hide, did ever have to finally decide? A little Lovin’ Spoonful for you this morning!

Gold couldn’t hold its early morning $5 gain, and ended up closing flat to up a buck or two on the day VS Monday… One of my fave economists, David Rosenberg, was speaking recently, and said that his number one investment is Gold… So there you have it! Rosenberg likes Gold above all other investment choices, what else is there to know? Nothing, absolutely nothing, say it again!

Gold is down $7.70 in the early trading today, so let’s see if Gold can buck the trend recently of wiping out the early morning performance… 

OK, yesterday’s dollar rally was fueled by the absolutely stronger than the man of steel, Retail Sales, Industrial Production and Capacity Utilization reports for May… Now I know that there is no such thing as a “real honest to goodness economic report” any longer… The Economy was shutdown in May, but somehow Retail Sales grew 18%, Industrial Production grew 1.4%, after 2 previous months negative reports, and so on… But Retail Sales grew 18% (actually 17.7%) well, bust my buttons! I told you yesterday that the Butler Household Index (BHI) had indicated that a rebound in Retail Sales would exist, but not to the tune of 18%!!!!!!!

And furthermore… David Rosenberg had this to say about the rebound in Retail Sales for May, on Twitter, “As we get today’s reflexive bounce in May retail sales, keep in mind at as of June 6th, the Johnson Rebook survey shows a -9.7% trend in chain-store receipts as of the first week of June. How’s that for (i) sustainability and (ii) the pent-up demand fairy tale?” – David Rosenberg…

There’s not much coming from the Data Cupboard after yesterday’s explosion of data… So, we’ll just move along now for these are not the droids we’re looking for.

The price of Oil is stuck in the mud around $35-$38, and can’t seem to push through the $40 handle… The Saudi’s announced new production cuts, and even those don’t carry the same weight as they used to.. Maybe when demand gets stronger with the reopening of economies, but I guess we’ll have to wait-n-see, eh? 

The Petrol Currencies that include: Russian rubles, Norwegian krone, Canadian dollars, Brazilian real, and others, are champing at the bit to get stronger, but the lollygagging of the euro and the price of Oil is just disappointing them.  Not that I want to pay more for gas, but these poor Petrol currencies need some love, folks…  

OK, a dear reader sent me a link to a YOUTUBE video of an interview of Kyle Bass. Kyle Bass is someone that you stop to listen to whenever he speaks, so I stopped to listen to what he had to say… And in the interview, he talks about the trouble Hong Kong is in, with their leveraged debt, leveraged currency, and falling housing prices… 

After watching the interview, I remembered that many years ago I wrote about how I believed the Chinese would have the honker go from a pegged currency to the dollar, to a free floating currency, so that they could get their feet wet, with regards to whenever they decided to float the renminbi. And then just fold the honker into the renminbi, and voila, one big happy family with one big floating currency…  Of course I use the term “floating” loosely, as we all know the renminbi is a very manipulated currency! 

I found this interview to be quite interesting in that nobody is talking about Hong Kong’s problem (except for Kyle Bass), most analysts have been focusing on the housing / prices problems in Australia and Canada… Well, now we have another country to add to our “Worry Wall”… 

Speaking of a “Worry Wall”… things are heating up in Korea, as N. Korea’s leader said that he was going to send troops into the demilitarized zone (DMZ)…  I’m no fan of wars, or conflicts or anything with guns, but don’t you think that N. Korea’s leader (Kim Jong Un) has stayed around too long? I can tell he never got spanked as a child, for he’s still a spoiled brat….  But we have to be careful here, because Un’s sister, is reportedly more brutal than her brother!   I don’t believe that this is anything more than a tempest in a teapot, but, one never knows, now do they? 

And meanwhile, back at the ranch, Japan continues to go their own way, which is a prudent thing to do right now. No reason to bulk up and show your hand to the N. Koreans at this time…   I’m just saying… 

Well, that rounds out our trip to Asia..  The World to me is a powder keg just waiting for its fuse to be lit… it will get lit, eventually, but what sets it off is the question… There are a ton of things that could light the fuse, and in the end, the one question that everyone will be asking is: Got Gold? 

To recap… The currencies couldn’t hold their ground on Tuesday, and gave way to the dollar bugs who also wiped out Gold’s early morning gain of $5. Powell, heads to the Hill today to testify… I would pay good money to be able to grill him, wouldn’t you? Oh, and Blackrock revealed that they were given plans for a bailout of banks last August, which if you check the calendar, was WAY before the pandemic, that is being blamed for all the money creation, and the bailout, was even a simple flu!

Market Prices today 6/17/20 American Style A$.6900, kiwi .6463, C$.7393, euro 1.1250, sterling 1.2569, Swiss $1.0540, European Style: rand 17.1187, krone 9.5206, SEK 9.3418, forint 306.03,  zloty 3.9513,    koruna 23.6010, RUB 69.55, yen 107.35, sing 1.3928, HKD 7.7499, INR 75.91, China 7.0808, peso 22.20, BRL 5.1660, Dollar Index 97.06,   Oil $37.72,   10-year .76%, Silver $17.48, Platinum $818.89, Palladium $1,937.94, and Gold… $1,718.81

That’s it for today… A little different letter today, but… in the end it’s all the same… I did a ton of reading last night, as the only thing I could find on TV that was interesting was a replay of the Braves/ Cardinals NDS Game 1 from last year… So, I started reading… I learned something last week, in my book Sam Houston, and the Alamo Avengers… That beloved American pioneer, Davy Crockett, who as I learned in school was killed at the Alamo, but in reality he survived the Mexican onslaught of the Alamo, and Santa Ana had him killed after the fighting was done. That made me very sad to learn that he lost his life that way… OK… this has gone on long enough this morning… Al Wilson takes us to the finish line today with his great song: Show And Tell… And with that, I hope you have a Wonderful Wednesday, and will Be Good To Yourself!

Chuck Butler

 

 

June 16, 2020

* Currencies win back some lost ground from last week

* Gold fights back! 

Good day… And a Tom Terrific Tuesday to you! Another Chamber of Commerce day here where I live the summer and fall… Before I go ballistic today, I want send a great BIG Shout Out to my former colleague, and the guy I consider to be my metals guru, Tim Smith, who along with his wife Nicole, welcomed their first born into the world on June 3rd… Tim and Nicole are very happy with their strapping young man, named Jason… So, congrats to you two! May you get a lot of sleep in the coming weeks…. HA! I got to see all 4 of my grandkids on Sunday, and the highlight of the day went to little Evie, who is now 9 months old! She’s going to be walking soon, I would bet! Chicago greets me this morning with their song: Stay The Night… Hey! Remember when the radio stations wouldn’t play the Rolling Stones song: Let’s Spend The Night Together? The FCC has come a very long way, haven’t they?

Well, well. Well. What have we here? Longtime readers, Bob, sent me an article yesterday that made me sit up in straighter in my chair… The article states a passage from the OECD ( Office for Economic Cooperation and Development) where they believe that U.S. banks that are the custodians for many Corporate and Gov. pensions, were in deep dookie in February, and to prevent them from going negative with their returns, the Fed bailed out those banks…. And we were wondering how the picking of who got what, was going to take place… now we know!

Look, I don’t want pensions to have problems… But the Fed comes in on their White horse and saves them, when it was the Fed’s actions that caused them to have problems! So, don’t be getting out the bouquets of flowers for your favorite Fed Head… They caused the problem in the first place!

Another thing that crossed my writing desk was Dallas Fed Chairman, Robert Kaplan spoke yesterday, and told his audience that he didn’t think capping the yield curve was a good idea, because he didn’t feel as though there was a way to control it…. But Kaplan could just be the straw horse here, to lead us away from what the Fed is really going to do… And like I said last week, before Powell spoke I might remind you, I believe not only interest rates are going to capped, but also the Treasury yield curve…

Alrighty then we have those two thing out of the way and off my chest…. Well, the currencies, led by the euro, fought back yesterday, and won back some ground they had lost late last week. I left you yesterday, with Gold down $20 in the early trading, but the shiny metal fought back to only close down $5, on the day at $1,728….  And that mini-rally in Gold yesterday, rolled over to this morning, and Gold is up $5 in the early trading today.  

Speaking of Gold, there is a little story here to lighten the mood… Seems a rider on a Swiss train, got off at his stop and forgot his Gold haul…  The Swiss authorities have attempted to find the owner of $191,000 worth of Gold, but nobody has turned up, so the authorities have decided to go public with the information… There were no details on what the authorities would do to confirm the owner…  I left my phone on plane once… And thought it to be a catastrophe! Imagine this guy…. 

Longtime readers will recall a Sunday Pfennig, when I gave readers: Chuck’s Debt Solutions… And one of the main things in the letter was to close all foreign military bases, those countries don’t want us there anyway…. The Threat of Russia running all over these European countries is null and void these days, so they don’t need the U.S. military there to protect them, any longer… Talk about HUGE money savings! Look, I told you all last week that “the order” is no longer a thing… Each country is going to have to look out for themselves, and as the Order winds down, I believe we’ll see more news like the one yesterday where it was reported that of the 52,000 troops in Germany, we’re bringing home 27,000 which will leave them with just 25,000… (see that new math I just used? Amazing! )

I always thought that the protection of Europe against  Russia was a bunk, but “the order” allowed countries to grow their exports and thus their collective economies, and that’s a BIG DEAL folks!  Without “the order” The seas would have been chaotic, never knowing if your shipment would get to where it was going or not…  So… here’s where the rubber meets the road, folks… with no protection, what’s the new situation with exports going to look like?  And with every country having to defend themselves, who’s going to look around and say, “hey! we still have a big military, it’s time we used it?” 

No looking to the U.S. for help… We’re out of that game…  We got tired of being taken for granted and advantage of…  Here’s an instance… Germany, wanted protection from Russia, but then signed a trade agreement with them to import Russian Oil…   Now, the U.S. is paying huge bucks to defend Germany, you would think that Germany would buy their Oil from the U.S., right?  Just one of many instances where the U.S. was taken advantage of…

 OK… time for something else… let’s see…. Oh, the rally in the Aussie dollar (A$) in recent weeks was something to behold, given that there was no global growth to feed the A$ rally. I even pointed that out a couple of times in the Pfennig. And then last week there were reports of a 2nd Wave of the virus, and the rug was pulled out from under the A$…  Remember me telling you to be careful there? 

The selling of the dollar is building steam… I saw where one of my former fave economists, Stephen Roach, gave a long dissertation on how the U.S. dollar is going to collapse…  I used to hang on every word that Stephen Roach said, but then he disappeared and I lost track of him…  But if he’s back now, that’s a good thing!  I’ll attempt to get through his latest writeup on the dollar, but I can tell from scanning it, he really does believe that the dollar is in deep dookie… 

I’m going to repeat this every day until it sinks into Traders’ collective minds that this is a very bad thing….  “The Fed’s Money Creation Has Exceeded U.S. Treasury Tax Receipts”…. 

The U.S. Data Cupboard gets back in business today with their prints of May Retain Sales, which the Butler Household Index, indicates will be better than the April report which saw a negative -16.4%, but the forecasters believe that May’s report will be far better than April’s and have Retail Sales growing 8%…  I’m thinking that’s a bunch of bunk, so we’ll have to wait-n-see in a bit… 

The Data Cupboard also has the May prints of Industrial Production and Capacity Utilization, two BIG “real economic reports” for us to view today…  But I somehow keep getting this feeling that I’m the only one that worries about these economic prints…  Oh well… It is what it is… 

To recap…  The currencies won back some ground lost late last week to the dollar bugs, yesterday… And Gold found some terra firma and recovered from an early morning $20 loss to just a $5 loss on the day, and is up $5 in the early trading today!  The fears of a 2nd wave of the pandemic sent the A$ to the woodshed late last week…  And Dallas Fed Head, Kaplan, doesn’t see how the Fed could control a Treasury yield cap…  Come on Rob… You can do it, if you really try!  HA!

For What It’s Worth…  OK… up to now, the Fed has only broken their rules by buying ETF’s… but it seems they are lining up another rule to be broken, as they announced that they are ready to buy Corporate Bonds… I do not like it when the main story is carried by CNBC ( I have a long running grudge against them!) But if that’s what it takes, then so be it, and you can find the article here: https://www.cnbc.com/2020/06/15/the-fed-says-it-is-going-to-start-buying-individual-corporate-bonds.html?

Or, here’s your snippet: “The Federal Reserve is expanding its foray into corporate credit to now buy individual corporate bonds, on top of the exchange-traded funds it already is purchasing, the central bank announced Monday.

As part of a continuing effort to support market functioning and ease credit conditions, the Fed added functions to its Secondary Market Corporate Credit Facility.

The program has the ability to buy up to $750 billion worth of corporate credit. Its March 23 initial announcement is largely considered a watershed moment for the financial markets, reeling from the coronavirus threat spread.

“The decision to buy a broad portfolio of corporate bonds represents a shift to a more active strategy for the secondary market corporate credit facility, rather than the passive approach originally envisioned,” said Steven Friedman, senior macroeconomist at MacKay Shields.

Under the latest guidelines, the Fed said it will buy, on the secondary market, individual bonds that have remaining maturities of five years or less. Those purchases will go along with the ETFs the Fed already has been buying, which are balanced toward investment-grade indexes but also include some junk bond funds that track debt which had been investment grade before the crisis but had been downgraded after.

The intent of the individual debt purchases will be “to create a corporate bond portfolio that is based on a broad, diversified market index of U.S. corporate bonds,” the Fed said in a news release.”

Chuck again… All the Fed is doing here folks, is creating a zombie economy, with zombie corporations, and fake money… But here I am pointing this out, and no one on the outside world thinks this is a bad thing… Am I the crazy one here?  No, wait! don’t answer that, for I fear what you’ll say! HA!   And old Fleetwood Mac song had lyrics that went like this, “don’t ask me what I think of you, I might not give the answer that you want me to”… 

Market Prices Today 6/16/20 American Style A$.6917, kiwi .6465, C$.7376, euro 1.1312, sterling 1.2650, Swiss $1.0557, European Style: rand 17.0945, krone 9.5086, SEK 9.3102, forint 305.34,   zloty 3.9165,   koruna 23.4842, RUB 69.94, yen 107.28, sing 1.3905, HKD 7.7498, INR 75.86, China 7.0908, peso 22.11, BRL 5.1049, Dollar Index 96.66,  Oil $37.84,   10-year .74%, Silver $17.40, Platinum $814.16, Palladium $1,949.09, and Gold… $1,730.63

That’s it for today…  Ok, last night on TV, they showed the replay of Game 7 of the 1982 World Series… I was at that game 38 years ago, it was a very cold night, but as I recall I didn’t feel the cold after the 6th inning…  Bruce Sutter came in to start the 8th inning, and in the end it was 6 up, 6 down, for Sutter…  I’ve always said that whenever Sutter came into a game, that the opposing team would start to pack up their bats! We used to park for the games at the old Mark Twain Bank downtown across the street from the ballpark. After the game we went back to the car to find a slew of Bank employees and customers standing around celebrating. It was a long night, and I recall it was an ugly morning..  But I got to see a Game 7 win… James Taylor takes us to the finish line today with his song: Don’t Let Me Be Lonely Tonight…  I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself! 

Chuck Butler

June 15, 2020

* The Fed and PPT were out in force late last week… 

* Another false dawn for the currencies… 

Good day… And a Marvelous Monday to you! OMGosh! Yesterday couldn’t have been a more beautiful day here in the St. Louis area, than it was… Warm, no make that very warm in the sun, but with a cool breeze blowing all day, made the day as delightful as it could be yesterday! Friday night had just me, Alex, and good friend Kevin sitting out and avoiding the rain… It was just like old times, when Kevin and Chuck sat outside listening to baseball games.. Only this time there were no baseball games to listen to, so Chuck tried to fill the air with stories of his past… Alex seemed to enjoy them, as he never knew about his dad as a young man… Spoiler alert here, I was wild and crazy! But look how I turned out! I’m still a believer that a young man needs to go out and push the envelope before he settles down to a life of marriage, and kids… It worked for me, that’s all I have to say about that! Gerry and the Pacemakers greet me this morning with their song: Ferry Cross The Mersey… This song played Friday night and I said, “I used to sing Alex sleep every night singing this song, and friend Kevin, said, “And he still went to sleep? “ Ha, as If my voice wasn’t good enough!

Well.. The Plunge Protection Team (PPT) came upon the scene Friday, and said, “ I heard that the stock market lost 1,800 points on Thursday, and we’re here to correct that” And stocks recovered 477 points of their 1,800 points lost on Thursday… The stock jockeys were rejoicing in the streets once again, but a quick reminder to them would have brought them back from embarrassing themselves, but that’s for another day, eh? I would have to think that the PPT will be hard at work from here on out, because, the American public isn’t a bunch of idiots… They too can see the writing on the wall, that Corporations, that issue these stocks, aren’t going to have the earnings to support their lofty stock prices… But one day of rebound does not make a bull market, folks… This is a Bear Market, and it’s going to take the Fed spending like they’ve never done before to support the stocks… I’m just saying…

Maybe, the PPT, or the Fed hasn’t gotten the memo yet, that we are in the middle of a deep recession… Wait! Surely the Fed has gotten word that we are in the middle of a deep recession, but that’s not going to stop them from spending money they haven’t got to buy ETF’s of corporations that would have folded if not for the Fed’s bailout program. 

Alrighty time to move on… the currencies proved what I talked about last week, was real… And that is that it had been another false Dawn, to think that the dollar was going to succumb to a multi-year selling scene… Why, just last week, early, the Aussie dollar (A$) had moved above 70-cents, and this morning it is trading with a 68-cent handle, and the euro , which last week had traded over 1.14 briefly is trading with a 1.12 handle this morning. The sentiment of traders can change in a heartbeat, or NY Minute, if you will, and never think about who they may have hurt with their sudden change of sentiment. Luckily, you have me to point out these false dawns!

Last week had seen Gold climb close to the $1,750 level and got brought back down, and Friday was no different… Gold actually climbed to 1,746, before setting in at $1,730., up$3 on the day… I had a dear reader send me a note last week, and said that they agreed with the $1,750 as the launching point for Gold… But wanted to know what that price would be for Silver… And I responded, that I just didn’t know what figure to put down for Silver, as there are too many inputs that make up the Silver price, and then add in the over 180 days of production it would take to equal the ounces of Silver sold short… So, don’t expect Silver to follow Gold move higher, dollar for dollar… It’s going to move higher, and on a percentage basis, probably outperform Gold, but the spotlight will remain on Gold, folks… 

Ok, le’s move on… Ok… Long ago and far away in a galaxy a million light years from now, I used to get the 5 Minute Forecast every day, and just loved the way Dave Gonigam would compress the news into an easy to read 5 minute format. Then one day the 5 stopped showing up… I contacted Dave, and asked him if I had become persona non gratis. He assured me it was his system.. And now the folks at Agora, have changed their delivery system, and I get the 5 once again! YAHOO! And that means more pfodder for the Pfennig! YAHOO! And every now and then, Dave will quote me from the Pfennig, which is always a hoot! So, with that long intro… I have this ditty for you today from Friday’s 5…

“For the first time on record, Fed Money Printing exceeds U.S. Treasury Tax Receipts over a 12-month period.”

Ok, I don’t know about you, but… Those words sent chills down my spine… We’ve basically gone to MMT without anyone noticing… Modern Monetary Theory, or the Magical Money Tree, is upon us, and it seems as though no one is noticing? I’m shocked and awed that the dollar is still strong… OK, I guess it’s going to take dumb as box of rocks, traders to get the message, and figure out what’s happening with all this, before they take action… I’ll give them a break on that, but… should the dollar remain strong, I would have to then question their intelligence or motives…

Well, the U.S. Data Cupboard was a mixed bag-o-nuts late last week. First on Thursday, the Weekly Unemployment figures printed… There was another 1.5 Million people filing Initial claims, but the thing I want to point out is that the continuing claims were 29.5 Million, that means that even with the states opening up again, and the slow slog to bring back employees, there were still 29.5 Million people out there that are unemployed…

Of course, no talk about the total unemployed would take place under my watch, if we didn’t talk about how the total unemployed is still a fake number… You see if a person in unemployed and their unemployment benefits run out, they are no longer counted as “unemployed”… So, the Labor Participation Rate would be better to look at here… And at around 63%, that’s quite a low number of people actually working, folks… So, let’s see here we all know that the labor total number of people working was around 150 Million… so, only 63% of that number are actually working… Which is 94.5 Million… I don’t think the economy can be that strong when only 63% of its work force is actually working… I’m just saying…

There were other prints, but they didn’t make a hill of beans difference to the markets, so I’ll let them slide… One thing I noticed late last week that wasn’t a part of the economic calendar was the fact that Caterpillar posted their worst monthly return in profits since 2010… North America sales plunged 36% on a rolling three-month basis, the most since January 2010 and far worse than the 27% drop posted in April… Caterpillar is an iconic American Company, folks… I’m just saying…

And for all you folks that like to go to gyms to workout… First it was Gold’s Gym that closed, and now there’s word that 24 Hour Fitness is about to file for bankruptcy…  I get this feeling that once the all-clear horn has sounded that many folks are going to need to get to a gym, after being held under house arrest for the last 3 months…  

There is one thing that’s gone on under the House Arrest, and it is that Americans have slowed their intake of sugar…  I know, for me, that’s a fact, because, I have Alex and Grace here to eat all the sweet stuff before I get a chance to! HA! 

Take all those bad things going on in the U.S. economy, and tell me it wasn’t the PPT that had to come in to save stocks late last week, and the dollar while they were at it…. I’m not buying it, as a correction… I’m thinking that it was a case of the PPT, and Fed buying stocks and dollars with your tax dollars, folks… Think about that for a minute and tell me it doesn’t make you angry… I get it… tax dollars pay for those items that the local authorities and the Gov’t provide us to ensure our safety and way of like… But when the money doesn’t go there, and instead is used to bail out Wall Street, I get just a little wound up! And you should too!

Most of the people see the Fed and the PPT jumping in to save Wall Street, and think, well that’s Ok, they’ve got my back! And it comes for free! Ahhhh, grasshopper, come sit, and learn… There’s no free lunch… And the sooner you come to believe that the better of you’ll be and not take the Fed’s buying stocks as a way to help your investment portfolio… 

The Data Cupboard for this week, gets back to business, starting tomorrow, with May Retail Sales, and that’s followed in the same day with Industrial Production and Capacity Utilization…  So, a BIG DATA day tomorrow… But the markets don’t pay attention to data any longer, They’ve all become “Comfortably Numb” with the negative prints. They see them, shrug them off, and get back to buying stocks and dollars… 

To Recap…  The rallies that the currencies and metals were booking VS the dollar got derailed once again late last week… Chuck is convinced that it was the PPT and the Fed in buying and spending money they don’t have once again to save Wall Street…  Chuck also came across some very chilling words in the 5 last week… “For the first time on record Fed money creation has exceeded U.S. Treasury Tax Receipts in a 12 month period”…  Think about that and see if raises the hair on the back of your neck like it did mine.. And Gold is down $20 this morning… What gives? 

For What It’s Worth…  Ok, remember last week when I talked about how the Fed will eventually put a cap on interest rates, and the Treasury yield curve?  Well, the good folks at GATA sent me this article on how the capping of the yield curve would be bullish for Gold, and it can be found here: https://www.voimagold.com/insight/why-yield-curve-control-by-the-fed-will-be-bullish-for-gold

Or, here’s your snippet: “On Wednesday, Fed Chair Jerome Powell stated he is considering “yield curve control.” Previously, in the 1940s, when the Federal Reserve controlled the yield curve, it created deeply negative real interest rates. If repeated today, this would cause the gold price to sky-rocket. 

Due to the current economic crisis, the U.S. federal deficit is reaching “unprecedented” levels. Preliminary data suggests the federal deficit will be $4 trillion dollars this year, which is more than 15% of GDP. Although, as the crisis unravels, it’s likely these numbers will be even worse by year end. Throughout history, only in the First and Second World War deficits of this magnitude have occurred.

As GDP is declining and the federal deficit rising, the “public debt to GDP ratio” is escalating rapidly. According to usdebtclock.org, U.S. public debt to GDP is 130% at the time of writing. Just a few months ago this ratio printed 110%. In the chart below, you can see public debt to GDP rising at a pace comparable to when the Second World War broke out. 

What many people don’t know is that at the start of World WarII, the Federal Reserve implemented “yield curve control.” The central bank of Japan wasn’t a pioneer when it embarked managing the curve in 2016.
Starting in 1942, the Fed put a cap on yields of government bonds across the curve. From that moment on “the Fed effectively abdicated its responsibility for monetary policy despite its concern about inflation and focused instead on helping the Treasury finance the conflict” (Humpage, 2016). “

Chuck again… Very interesting thought, that yield curve capping would create deep negative rates (when you factor in inflation) and that would be a real feather in the cap of Gold…  Very interesting… 

Market Prices today 6/15/20 American Style: A$.6817, kiwi .6436, C$.7328, euro 1.1255, sterling 1.2520, Swiss $1.0522, European Style: rand 17.2080, krone 9.6823, SEK 9.3610, forint 308.33,   zloty 3.9425,    koruna 23.7330, RUB 69.68, yen 107.34, sing 1.3945, HKD 7.7498, INR 75.76, China 7.0824, peso 22.59, BRL 5.0481, Dollar Index 97.15,   Oil $35.43,   10-year .67%, Silver $17.18, Platinum $815.00, Palladium $1,927.91, and Gold… $1,711.20

That’s it for today…  Well, thanks to all who sent along congrats to the Butlers… Yesterday was Flag Day… Did you fly your flag?  Yesterday was also a day of remembrance for me, as it was 13 years ago yesterday, that I had my first cancer surgery…  On the 27th of June it will be 13 years since I had my second cancer surgery…  Yes, less than two weeks apart… 13 years I’ve been on some kind of chemo… some pills, some infusions, and other medicines to keep me going… As my friend, Ty says, “better living through chemistry”… I would be the poster child for that! Bob Marley takes us to the finish line today with his song: 3 Little Birds…  “don’t worry, about a thing, ’cause every little thing is going to be alright”…   And with that thought, I hope you have a Marvelous Monday, and will continue to Be Good To Yourself!  

Chuck Butler

June 11, 2020

* Currencies rally strongly on Wed. but soften overnight

* Gold soars on news that interest rates will remain near zero! 

Good Day… And a Tub Thumpin’ Thursday to you… This should be shorter than usual this morning, as I need to get ready to go see my oncologist this morning. Here’s something I doubt you’ll ever hear from any other cancer patient… “ I love to go see my oncologist” I’ve had 4, counting my M.D. Anderson doc, so I should have a pretty good idea as to who’s good and so on… Two of my former oncologists have retired… So, you know you’ve done a good job of surviving when you outlast your oncologist! HA! My allergies have really been beating on me this spring… Every time I go out to the back yard, everything has an inch of pollen accumulated on it… Yellow in color, and monstrous to my sinuses! The Beach Boys greet me this morning with their song: Wouldn’t It Be Nice… here’s Chuck’s version.. Wouldn’t it be nice if we could wake up, in the morning when the day is new, and never have to worry about the economy, because it hurts the whole day through…

Well, well, well… What did I tell you yesterday about how zero interest rates aren’t going anywhere and that eventually they will be capped off to prevent the markets from pushing them higher… And then about 6 hours later… Fed Chairman Jerome Powell, told reporters at his press conference, that “zero interest rates are here to stay through 2022”… Powell made sure the reporters were clear on the fact that the Fed will keep rates near zero until they are confident that the economy has weathered the storm, successfully….

He then went on to talk about GDP… And here’s where I believe he made a big mistake… He said that GDP for 2021 will be 5%, and in 2022 3.5%… I’m not buying it with YOUR MONEY! Or as I used to say about the S. African rand, I wouldn’t touch that with YOUR TEN FOOT POLE!

So, the bullets the dollar bugs were sweating yesterday morning ahead of the FOMC meeting adjournment were bonafide, and for goo cause… Because you can’t defend the dollar when the Fed Chairman says interest rates are staying near zero, not just the rest of this year, and not thought next year, but into 2022!

The Currencies, led by the euro, took off for higher ground VS the dollar, and Gold kicked some tail too. So, all you naysayers that wouldn’t buy Gold because it’s a non interest bearing investment… Well, where are you getting your interest on your investment now? I’m just asking…

Gold closed the day up $24 with Silver tagging along.  But something happened overnight, because the currencies and their lofty levels of yesterday afternoon, have had the wind taken out of their collective sails, and Gold is down a couple of bucks early this morning.  I’m in a good mood this morning, so I’m just going to put this pullback in the overnight markets down to profit taking…  And then move on… 

OK… now this really rankles me… There’s an economist out there by the name of Stephanie Kelton, who wrote an article in the NYTimes, (go figure, right? ) saying “Why I’m not worried about America’s Trillion dollar deficits”… Go ahead and google it and read it, that is if you want to get sick to your stomach, and lose today’s lunch… What a looney tunes! Apparently she never took an economics class, I Mean a real economics class, where you learn about Adam Smith, etc. And she obviously never studied the economics theories of Misys… But a stray here… Here’s the main fact that she seems to forget, or probably never learned, is that the larger the deficit the harder it is for a country’s economy to thrive… I don’t think we need any more proof of that than just looking at Japan… They’ve taken the deficits spending to heart, and for over 20 years their economy is… well, there is no economic growth to speak of…

Today’s analysts, I guess that’s what they call them, have no idea what looking under the hood, is all about… The get fixated on a something and soon it’s the “call of the month” and they want everyone to read about what they’ve come up with… It embarrassing to me, someone who learned economics at the knee of the great Hy Minsky, to see this going on… But it is what it is, and hopefully not too many people think much about what she had to say…

Well, another one bites the dust…. I read yesterday that Shale pioneer, Chesapeake Energy had their shares stopped on the NYSE, due to rumors that they will file bankruptcy… Remember when I told you months ago that the shutdown was going to really put some stress on the shale producers, because, they had loaded up on debt, and with no income coming in, to pay on that debt, things get really sticky… Well, fast forward to yesterday, and this was the news article that printed: “Shale gas pioneer Chesapeake Energy, once worth $37.5 billion, has warned of a possible Chapter 11 bankruptcy filing in order to restructure some $9 billion in debts.”

Just another sign that the economy isn’t going up… instead, it’s going down…. 

The U.S. Data Cupboard had the stupid CPI report for May yesterday… The consumer price index (CPI) showed that deflation wasn’t as bad in May as it was in April, as May printed at -0.1%, VS the April print of -0.8%… John Williams over at www.shadowstats.com shows inflation, calculated using pre 1990 methods, i.e. before hedonic adjustments, shows CPI at just below 4%… I mean what does it take to get people upset with the CPI’s version, when the real cost of living is near 4%, and that’s after the drop in April because of the lockdown.

There was also a reveal of the Federal Budget for May… The Federal Budget had a deficit of $399 Billion, which blew April’s deficit of $208 Billion out of the water! A couple hundred Billion here, and a couple of hundred Billion there and pretty soon you have a multi Trillion annual deficit! Take the average of these last two months, and get $303 Billion deficit per month, and then multiply that by 12 and you get an annualized deficit of $3,642 Trillion… Then add that to the current debt, and you see why / how we’ve gone from a current deficit of $5.7 Trillion in 2000, to $7.2 Trillion in 04,  to $10.2 Trillion in 08, to 15.3 Trillion in 12, to 19.6 Trillion in 16, to $25.9 Trillion today… All of these numbers come curtesy of the www.usdebtclock.org…. Oh, and just for grins, they let me go forward, based on the trend in deficit spending now… In 4 years, 2024… The current U.S. Deficit will be $46 Trillion!!!! And our Unfunded Liabilities will be $188 Trillion…

Of course, I don’t believe we’ll get to those numbers… Because this is all becoming just too much for the financial system to bear… It might be different if, say the second largest economy, China, ran a surplus, but no, they too have gone down the deficit spending road that leads to dead man’s curve… And the 3rd largest economy, Japan, is up to their eyeballs in debt, and the 4th largest economy, ah, never mind, I think you get the picture…

To recap… The Fed left rates unchanged, and Fed Chairman, Powell, told reporters that the Fed plans to keep rates near zero into 2022…  Not just the rest of this year, and not all through 2021, but into two years from now!  This news sent Gold higher on the day (by $24), and the currencies kicked some sand in the dollar’s face… But in the overnight markets there must have been some profit taking, (Chuck’s in a good mood this morning) because the currencies have backed off their levels of yesterday afternoon.  And another one bites the dust, as another Shale producer has filed for bankruptcy… 

For What It’s Worth… Well, this article is all over the internet, so you don’t need me to give you the link to the story, simply Google it… But for those of you wanting to know more, this is an article about U.S. Pensions running out of money in 8 years… And it can be found here: https://burypensions.wordpress.com/2020/06/10/ft-seven-major-us-public-pensions-to-run-out-of-money-by-2028/

• Or, here’s your snippet: “Over 320,000 members of the New Jersey Teachers and Chicago Municipal public pension plans: “A slow recovery for the US stock market could result in Chicago Municipal’s funded position falling from 21 per cent this year to just 3.6 per cent by 2025. This would leave assets to cover just three months of the fund’s retirement payments…”

• New Jersey Teachers: “…funded position projected to decline from 39.2 per cent to 23.2 per cent over the next five years. By that time, New Jersey Teachers would have assets to cover 19 months of retirement payments.”

• Police and fire departments: “public pension plans of Kentucky and Providence along with Dallas Police and Fire, Charleston Fire and Chicago Police could all end up with less than three years of retirement benefit payments saved as assets.”

• “Chicago has particularly high pension risks. The city has built up very large unfunded liabilities through years of very weak pension contributions,” a senior credit officer at Moody’s.”

Chuck again… I’ve been talking about a problem for pension plans for years folks, have you been listening? There’s another bailout from the Government in the offing… I mean we bail out Corporations now, why not Pension Pans?

Market prices 6/11/19: American Style: A$ .6915,  kiwi .6477,  C$ .7408, euro 1.1360, sterling 1.2660, Swiss $1.0606, European Style: rand 16.8413, krone 9.4146, SEK 9.2360, forint 303.10,  zloty 3.9356,   koruna 23.4358, RUB 68.56, yen 107.08, sing 1.3880, HKD 7.7500, INR 75.61, China 7.0634, peso 22.39, BRL 4.9098, Dollar Index 96.23,   Oil $37.96,  10-year .70%, Silver $17.96, Platinum $834.18, Palladium $1,933.60, and Gold… $1,732.96

That’s it for today… See? I can keep it shorter, when time is of the essence! HA! Well… On Wednesday this week, it was the Birthday for  one of my fave people on earth … Laura Baur…  Then last night was the Birthday of good friend… Mike Kettler…  Happy Birthday!  Tomorrow is Chuck & Kathy’s anniversary… This will be 44 years…  I know I’ve told you all how the two of us met in 1972…  but I’m going to tell it again…  I was a what you would call a country strong football player, and in the summer I would run the track at the high school to keep in shape for the upcoming season. One day, I was running the track, and the cheerleaders were having a practice, and my eye immediately went to the beautiful young lady with red hair. I stopped, called a friend of mine over to ask her what that young lady’s name was… And we met… And the rest, they say, is in the books…  Blood, Sweat & Tears take us to the finish line today with a song that’s very appropriate after the story I just told you… You’ve Made Me So Very Happy…  Ok, with that, I need to get going, so please go out and have a Tub Thumpin’ Thursday, and Be Good To Yourself! 

Chuck Butler

 

June 10, 2020

* Currencies continue to move higher VS the dollar

* Gold gets back on the rally horse! 

Good Day… And a Wonderful Wednesday to you! Well, the reports of a heavy rain for yesterday, turned out to be wrong, as usual… Have you ever encountered a profession that could be so wrong all the time, and still be employed? Not that I’m complaining about the lack of rain, the sun did make a late afternoon appearance that allowed me to go outside for some reading… I’m into my new book on the history of Sam Houston… You know the Avengers of the Alamo? Where iconic American heroes of the day, Jim Bowie, and Davy Crockett both died defending the Alamo… I love American history, the real history, not the stuff they teach in schools these days…. OOOPs did I say that out loud? I guess I did! Oh well, we’ll just carry on as if I didn’t say that out loud! HA! Neil Young greets me this morning with his song: When You Dance, I Can Really Love….

Well, it looks as though the dollar bugs are sweating bullets ahead of the Fed’s FOMC meeting that will adjourn this afternoon with a rate announcement and a Press Conference, featuring Fed Chairman Jerome Powell… I say that because for no other reason than that, the euro rallied on Tuesday, and climbed above the 1.13 handle, to close the U.S. market side, at 1.1340… What have I always told you since 2002? That the euro is the second most traded currency in the world, behind the dollar, and therefore is the offset currency to dollar crosses… So, when the dollar bugs are running scared, and the dollar is getting sold, the euro will rise, whether things in the Eurozone warrant the rise or not…

The overnight markets had more sweating by traders, as the euro continued to move higher, and the A$ moved past 70-cents!  I’ve talked about the A$ quite a bit lately, but more on the line of I didn’t believe the rally was solid…  I’m still not completely sold, but this all has a familiar feeling to it, and that feeling is a loss of confidence in the dollar..  We’ll have to see more of these kinds of moves to say for sure this is what we’re seeing, but it sure does feel like it is… 

The European Central Bank (ECB) can always jawbone the euro back down, much like former ECB President Mario Draghi used to do at every opportunity, throwing the euro under a bus… But that’s really all they can do… They’ve already cut interest rates into negative territory, they’ve already implemented a bond buying program, and their economy is in a state of muck… But the dollar bugs are running scared, and so the euro rallies….

The reason I chose 2002, as my year above, is because that was when I wrote the white paper titled: 2003, The Year of the Euro… And it well became just that! But back then there were compelling reasons to buy the euro, not like today when all we’ve got is it being the offset currency to the dollar. That White Paper brought in so many new investors to the World Markets Desk, with them all wanting to buy euros… And soon the euro would rise to levels not even seen as available to me… The euro would rise to a high of 1.56 in June of 2008… And it hasn’t seen or sniffed a 1.50 level since 2008…

In 2011 the hidden debts of Greece, Italy and Spain were uncovered, and all hell broke loose with the euro, and it went into a deep slide that it has never really recovered from… Why? Well, those debts were made worse with more debts, and there’s been nothing done to reduce them… The grand austerity plans that Germany made the countries with the outrageous debts agree to abide by, have been burned and all that remains are the ashes…

Ok… time to talk about something else beside the euro, Eurozone, and so forth… Well, this isn’t that far away from a discussion about the euro, but I’m going to talk about it any way! 

About 4 maybe 5 years ago, when I was still with EverBank and I wrote a monthly newsletter to clients only, called The Review & Focus, I highlighted what I saw as the problems that were being laid at the doorstep of German Banking Giant, Deutsche Bank… I had to fight to get that letter through the review process, because it wasn’t really about what the clients were wanting to read… But I proposed that it did, in that, if this Banking Giant collapsed, then all those derivatives that I had been warning about would be coming home to roost, which would damage not only the euro, but the dollar, for not only did Deutsche Bank have its tentacles in Germany, but also all over the world, including here in the U.S. If any longtime clients still have a copy of that particular R&F, I would love to see it and read it again, because…. Longtime reader, Bob, sent me an article that said that Deutsche Bank was nearing filing Bankruptcy…

Or maybe they’re not really going to close, but instead, using the Hertz playbook, to  see if filing  bankruptcy as a means to get their stock price to rise! I know, I know, this is serious stuff, and here I am having fun with it… Well, if you read what I had to say about this bank 4 years ago, this announced bankruptcy would be coming to you as no surprise!

Gold got back on the rally horse yesterday, gaining $17 on the day and closing at $1,716, and the shiny metal is up another $3 this morning. Silver on the other hand was not allowed to rally yesterday along with Gold. Silver lost 21-cents to close at $17.55, but Silver has erased that loss yesterday in the early trading this morning…  

Well… Yesterday I did the spoiled brat thing and reminded you that I kept telling you that the problems in the economy were already happening before the COVID-19 virus showed up in the U.S. and then I saw this from Russ and Pam Martens of www.wallstreetonparade.com and thought I would rub it a little more, because… well, that’s what spoiled brats do! So, lets’ listen in on what Russ and Pam Martens have to say… “Wall Street On Parade has previously written that a financial crisis was already well under way before the first case of COVID-19 was reported anywhere in the world. This should matter greatly to Americans because the Federal Reserve is attempting to blame the financial crisis on the virus to avoid Congressional investigations of its second epic failure in a dozen years at regulating the behemoth Wall Street banks.

America needs a comprehensive investigation of what really triggered this financial crisis in order to restructure the U.S. financial system away from a casino culture into one that doesn’t regularly need massive Federal Reserve and government bailouts. These bailouts are piling more and more debt on the shoulders of taxpayers and becoming a crushing drag on the U.S. economy, notwithstanding Fed Chairman Jerome Powell’s dismissive remark to Congress that we’ll worry about the debt later.”

I love the way the folks a WSOP put things… They put things into prospective, so that everyone understands what they are talking about… And do so with a punch to the gut!

Well, just when the demand for Oil began to increase, Libya announced that they were shutting down their largest Oil rig…  Could this bring about a huge spike in the price of Oil? Maybe… There are so many inputs to the price of Oil, that I hesitate to make any call on Oil…    But…  just for grins, I was searching through the Pfennig Archives yesterday, and saw that I had talked about the direction of the price of Oil several times in the past… I must have been sleep typing because I sure don’t recall those times! 

I read the other day that the Fed had pumped more money into the repo market… I find this to be interesting in that with all the COVID -19 stuff going on, and the Trillions of dollars the Fed poured into the economy, that the problems in the repo market seems to have moved to the back page…  But remember, this is what I said back in September when the problem first arose… ” How can Jerome Powell keep telling us that the banks are solid, when they have to bail out the repo markets each and every day?”   I point back to that time, to remind everyone that the problems in the economy were around long before the pandemic showed up on our shores….  I’m just saying… 

The U.S. Data Cupboard has the stupid CPI (consumer inflation) report for May…  And the Federal Budget deficit for May, and that’s all before the Fed adjourns their meeting this afternoon…  I read on Bloomberg this morning that they wonder how long the Fed will keep rates at zero… I laughed and said to myself, “How long have you got?”  

You see… I’ve thought long hours on this subject, and see the Fed having to cap interest rates in the future, to keep them from rising too much, given the amount of debt servicing that’s on the docket. I also think that a yield cap on Treasuries will be implemented. yes… take the “free markets” out of bonds would be the result of that, but a Fed has to do what it has to do to keep the economy from imploding… 

And now we turn to Chuck Butler for “deep thoughts”….   Yikes!  I had better return to the lighter side here before everything turns dark, eh? 

To recap…  The dollar bugs are sweating bullets wondering what Fed Chairman Powell will say this afternoon about rates and the economy…. Will Powell speak with a forked tongue, or a true tongue?   So, with the dollar bugs running for the hills, the currencies, led by the euro have really gone on a run, moving higher VS the dollar. So, is this a short-live move in the currencies, or a change in sentiment toward the dollar?  That has to be the question of the day, and one that cannot be answered today, but in the days to come… 

For What It’s Worth…  Well, I’ve talked about Jeffrey Gundlach many times in the past, for he’s the new Bond King, and when he talks, people listen. It’s that simple… So, when Jeff talks, I highlight it and put it in the FWIW section!  Today’s Gundlach talk is about, the stock market, the Fed, and Gold…  (sounds like a Pfennig! )   And it can be found here:https://www.zerohedge.com/markets/superman-jeffrey-gundlach-live-webcast

Or, here’s your snippet: “Gundlach Warns Stock Market Likely to Fall From “Lofty Perch” Despite “Superman” Powell, Says Buy Gold” 

Chuck again… Nah… I’m just kidding… I have more for you from Mr. Gundlach… I’ve listed the take aways from his webcast here for you:

The stock market is likely to fall from its “lofty” perch. “The big, experienced smart money is skeptical of this little-guy created, epic rally.”

The Fed violated the Federal Reserve Act of 1913 by buying high-yield bonds and ETFs. Gundlach expects Fed Chair Jerome Powell to follow through on controlling the yield curve should the 30-year rate come unhinged.

Traders think that Powell is Superman, and that the chairman will keep the fed funds rate at zero for the next two years.

Quantitative easing and zero rates don’t work, otherwise “we wouldn’t be back at them on steroids 10 years later.”

Negative rates are the biggest kryptonite of all, given that they’re “fatal” for the banking system, he said.

In the long term, the bond manager is bullish on gold, saying it will reach new highs. Alternatively, he’s sticking to his weak-dollar call, saying the greenback can devalue against most other currencies.

Coming in waves: Gundlach sees waves of corporate credit downgrades and white-collar unemployment. He said the lockdown has him questioning the usefulness of middle-management, supervisor-types and that he could “easily see” layoffs hitting people earning $100,000 a year.”

Chuck again… And you think I’ve turned to the dark side?  Boy this Jeff Gundlach is a hoot to talk to at a cocktail party don’t you think?   I can see Chuck and Jeff in a corner talking economics, and people all standing around waiting to hear something good… 

That scenario happened somewhat in the past… I was in San Diego attending the memorial service for the great, legendary Richard Russell, and there were three seats with a table outside, and I sat down. Soon, friends, John Mauldin, and Bill Bonner sat down too, and we began to talk about this and that, and then when I got up to leave, I saw this huge crowd of people standing around us, listening to whatever we had to say… 

Market prices today 6/10/20 American Style $.7007, kiwi .6555, C$.7471, euro 1.1373, sterling 1.2772, Swiss $1.0574, European Style: rand 16.5411, krone 9.2512, SEK 9.1825, forint 302.00,  zloty 3.9166,    koruna 23.4075, RUB 68.50, yen 107.32, sing 1.3842, HKD 7.7498, INR 75.32, China 7.0780, peso 21.78, BRL 4.8585, Dollar Index 96.09,  Oil $37.96,   10-year .80%, Silver $17.73, Platinum $832.05, Palladium $1,958.73, and Gold… $1,719.08

That’s it for today…  Well, I don’t know about tomorrow at this point… if I get up early enough, there will be a pfennig before I head to the oncologist, if I don’t, there won’t be one…  The Baseball draft will take place today… They cut the number of rounds down from 40 to 5…  So there will be a lot of graduated either from college or high school players that will be wondering what they are going to do if they don’t get drafted…  the minor leagues will be cut, and baseball is in trouble….   The players and owners better get their collective heads out of their sit upons and work something out so they can play this year… I’m just saying….  Robert Plant takes us to the finish line with one of his best solo songs: In the Mood… And with that I hope you have a wonderful Wednesday, and please continue to Be Good To Yourself! 

Chuck Butler

 

 

 

 

 

 

June 9, 2020

* Currencies and metals rest on Monday… 

* The BLS points out a footnote that was a part of their jobs report… 

Good Day… And a Tom Terrific Tuesday to you! Another day in paradise, is what it seemed to be yesterday, with Blue umbrella skies, very warm sunshine, and it was the end of our run of warm, dry days, as the remnants of the Tropical Storm Christobal has come our way… But with the sun you have to have a little rain sometime! Rainy days make you appreciate, the sunny days even more! Much like Glenda told the munchkins, it’s safe to come out now… For all of you who thought maybe I had gone over the edge with my reporting of the BLS Jobs report last Friday, yesterday, can calm down, because I’ve gotten over it. Besides there’s not a single thing I can do about it, and if there’s one thing I’ve learned through the years, it’s that there’s no sense getting all worked up about something you have no control over… Besides, there was a voice speaking to me yesterday, and that voice is now gone, except in the morning song… The Moody Blues greet me this morning with their song: The Voice

The morning after the chaos created by the BLS and their “made up” jobs report, had traders looking around and saying, that was too much… That and the fact that the BLS actually came out and pointed out a small print footnote in their report, that said, there was a glitch in the system, and that the Unemployment rate “could be 3 percental points higher”, thus brining it to 16.3%… OK, I get it, but why print anything if you know it’s not honestly correct? The markets depend on correct reporting to make trades, and after Friday’s sell, bonds, currencies and Gold, you now want to come out and say that what you reported on Friday, was underreported?

Back in the day, I used to prepare the monthly income statements for the Bond Division at Mark Twain Bank… I shudder to think of how quickly I would have been shown the door, if I had presented the income report, and said, “But it could be higher or lower, I’ll need more time to figure that one out”… But that’s exactly what the BLS did yesterday… OK… enough of that, I’ve said what I’ve said, and I can’t says no more! – Popeye!

Besides, we’re still light years away from what I believe the Unemployment Rate should be (27%), and the made up number of the BLS, even using their footnote number (16%)… So, what difference does their footnote really mean to me? Nothing, nada, nil, zilch, a big fat goose egg! 

Yesterday’s action in the currencies and metals were very muted… There may have been some volume but the movements either way, just weren’t there! The euro inched a bit higher, and Gold found a way to hold on to $5 of its early $8 gain, as the day went along. It was more like the currencies and metals were licking their respective wounds from Friday’s action, all day on Monday, and they weren’t ablt to get back into the game while still nursing their wounds…

The overnight markets didn’t bring any changed either, so we star this morning in the U.S. just about where we were with the currencies yesterday morning, and Gold is down 98-cents so far this morning, so basically unchanged… 

You know… There just aren’t any real markets any longer… Everything, and I mean everything is manipulated…. What? You don’t think stocks are manipulated? Ok, I guess the fact that the Fed is spending Trillions to buy ETF’s (basically buying stocks) is manipulation? Come on…. Don’t be like “that” guy… You know the guy who turns a blind eye toward anything he doesn’t agree with or believe…. But Shoot Rudy, I would think that as long as the Fed’s spending their hard earned money, no wait, their newly printed dollars, on stocks, then everyone should join in… You put your left hand in you take your left hand out, and you shake it all about…. Come on, let’s do the Hokey Pokey! Because buying stocks is what it’s all about! Until it won’t be…

How many of you remember the dot.com stock market rally that seemed to go on and on, until one days somebody said, “Hey these dot.com stocks don’t have any earnings” and that was the end of the dot.com rally, and soon all those gains were wiped out…. Come on, it was only 20 years ago! And what do you think will be the straw that breaks the stock market’s back? The same thing, ok, I’ve got to say this here, this is my opinion, and I could be wrong… but it think what  the end of the dot.com rally, will be the same thing…. After being shutdown totally for 2 months, and half-shutdown another month, when the earnings season for this period prints…. Someone is going to say, “These corporations don’t have any income”

Did you hear the news, there’s good rockin’ at midnight? Well, besides that, the BIG news yesterday was the we have been in a recession since February… And this is where I start acting like a spoiled brat, and saying, I told you so, I told you so, I double, double told you so! Remember last month when I kept reporting the March numbers, and kept saying, “see the economy was having problems before the pandemic hit our shores”

And also a month ago, I gave you a piece of research I had done when writing the Dow Theory Letters, about how stocks perform during a recession…. And it’s historically not good… So, if you want to follow the herd, and buy stocks, you have better do so quickly, before there’s this wall of rain that will fall on the Fed’s stock market buying parade…

The U.S. debt accumulation continues unfettered…. We’re about to go over $26 Trillion in Current Debt and we’ve got more than 3 more months to go till we get to the fiscal year-end for the U.S. Our debt to GDP ratio is now at 130.05%… Years ago, not thinking that we would cross the rubicon with debt like this for years, there were some economists that said when an economy has a debt to GDP ratio of 90% their economy will suffer… Hmmm… I know they’ve changed how kids learn match these days, but I would like for them to explain how if 90% is bad, then 130% isn’t that bad…. BECAUSE IT IS VERY BAD!

What’s it gonna take to stop all this debt creation? A war? A debt jubilee? Or a debt default? I’ll take what’s behind curtain #3, Monty, because, we have experience in dealing with a debt default, the other two I don’t want any part of…. A war speaks for itself… and debt Jubilee, is fraught with devastation for the dollar….  Just like a debt default , but with a debt jubilee, there are too many unknowns. And with either of them the question would be who’s going to trust anyone selling debt ever again?

Aren’t I just a bundle of good news this morning, eh? HA! Wait till you get to the FWIW article today….

I watched and listened to a zoom meeting presentation by Grant Williams, and Egon Greyerz, of whom I’ve quoted and cited their thoughts several times through the years. They really didn’t tell me anything I didn’t already know, except this little ditty….  OK… remember a week or so ago, me telling you that Hertz had filed bankruptcy? Well that indeed did happen, and since that filing, the stock of the company has soared? Who knew that buying the stock of a company in bankruptcy was the thing to do?  

And that right there my friends, is another HUGE reason that the stock market dead cat bounce is about over…  The stock jockeys have gone off the deep edge, they’re being ridiculous with their buying. They’re probably using the old dart method, where you throw a dart at a target made up of stock names, and wherever the dart lands is the stock you buy… 

I don’t travel any longer like I used to… But if I were still traveling, I’m sure that in these times, that when getting into a cab, the driver would ask me what I did, and then proceed to tell me about a stock tip he had received… 

A thing or two that I want to mention this morning, is one… I had a fat finger incident yesterday, and had the wrong price for loonies… The correct one is posted today… And have you noticed the Brazilian real lately? Yesterday, it slipped below the 5 handle for the first time in, well, what do I aways say, “A month of Sundays!”  With the Russian ruble leading the Petrol Currencies they sure have a revived look about them, don’t they? 

The U.S. Data Cupboard is basically empty again today with some 3rd tier reports on the docket… The only piece of data today that is a bit interesting is the April print of Job openings… Besides that… forgetaboutit! 

Don’t forget though that tomorrow will bring us the FOMC meeting and a press conference from Fed Chairman, Jerome Powell…  As I said yesterday, that I don’t care for what he’ll have to say, because it will be full of lies, and Fed Speak…. 

To recap…  The day after the chaos created by the BLS and their made up Unemployment Report, was a day where traders, took a breather, and said, that was too much!  The currencies and metals are starting today with the same clothes that they wore yesterday.  The Recession actully began in February, folks… Hate to tell you but I was right once more!  

For what It’s Worth…. A former neighbor of mine, sent me a link to this article last night, and after reading it I thought, this is ripe for the FWIW article on Tuesday! So, thanks Brad, for sending that along… The title of article is: A Crash In The Dollar is Coming… and it can be found here: https://finance.yahoo.com/news/crash-dollar-coming-210024166.html?.tsrc=fin-srch

Or, here’s you snippet: “ The era of the U.S. dollar’s “exorbitant privilege” as the world’s primary reserve currency is coming to an end. Then French Finance Minister Valery Giscard d’Estaing coined that phrase in the 1960s largely out of frustration, bemoaning a U.S. that drew freely on the rest of the world to support its over-extended standard of living. For almost 60 years, the world complained but did nothing about it. Those days are over.

Already stressed by the impact of the Covid-19 pandemic, U.S. living standards are about to be squeezed as never before. At the same time, the world is having serious doubts about the once widely accepted presumption of American exceptionalism. Currencies set the equilibrium between these two forces — domestic economic fundamentals and foreign perceptions of a nation’s strength or weakness. The balance is shifting, and a crash in the dollar could well be in the offing.

The seeds of this problem were sown by a profound shortfall in domestic U.S. savings that was glaringly apparent before the pandemic. In the first quarter of 2020, net national saving, which includes depreciation-adjusted saving of households, businesses and the government sector, fell to 1.4% of national income. This was the lowest reading since late 2011 and one-fifth the average of 7% from 1960 to 2005.

Lacking in domestic saving, and wanting to invest and grow, the U.S. has taken great advantage of the dollar’s role as the world’s primary reserve currency and drawn heavily on surplus savings from abroad to square the circle. But not without a price. In order to attract foreign capital, the U.S. has run a deficit in its current account — which is the broadest measure of trade because it includes investment — every year since 1982.
Covid-19, and the economic crisis it has triggered, is stretching this tension between saving and the current-account to the breaking point.

The culprit: exploding government budget deficits. According to the bi-partisan Congressional Budget Office, the federal budget deficit is likely to soar to a peacetime record of 17.9% of gross domestic product in 2020 before hopefully receding to 9.8% in 2021.”

Chuck again… OK… tell me when you’ve seen this, because I never have… The gov’t starts spending money on something, and when the problem is on its way to being solved, the Gov’t pulls back its funding…. It’s never happened and it probably never will!

Market prices today 6/9/20 American Style A$.6945, kiwi .6498, C$ .7435, euro 1.1275, sterling 1.2663, Swiss $1.04.82, European Style: rand 16.7228, krone 9.3436, SEK 9.2389, forint 305.72,   zloty 3.9420,   koruna 236105, RUB 68.27, yen 108.20, sing 1.3912, HKD 7.7499, INR 75.36, China 7.0742, peso 21.70, BRL 4.9190, Dollar Index 96.88,   Oil $38.12,   10-year .83%, Silver $17.65, Platinum $839.50, Palladium $2.021.03, and Gold… $1,697.55

That’s it for today…  What will it be today for Gold? I know that I seem to be fixated on the price of Gold, but in reality I’m not… I bought it years ago, own it, and don’t really care what the price is because I’m not selling it!  And basically, I don’t want to see Gold soar higher all at once, because then investors won’t be able to get any Gold… Gold is a store of wealth, period. Eric Clapton’s love song to George Harrison’s wife, takes us to the finish line today… Layla, the rock classic, was in the middle of a messy love situation, when Eric was being a low-down polecat, and that’s all I have to day about that!  I hope you have a Tom Terrific Tuesday, and will continue to Be Good To Yourself! 

Chuck Butler

 

 

June 8, 2020

* Gold & Silver get whacked on Friday… 

* The Recent currency rally gets derailed on Friday… 

Good Day… And a Marvelous Monday to you! What a wonderful chamber of commerce weekend for us here in the Midwest!! We had all kinds of different people here to swim this week, but none made my heart open up and sing joyous songs, than my 8 month old granddaughter, Evie May… That child’s smile can make a mean old man wilt… Not that I’m a mean old man, but if there was one around he would be wilting! Like I said last week, this little girl will be able to call me whatever she wants, and she’ll get whatever it is that she wants. Not that I want a spoiled granddaughter, but I’m afraid that she’ll have me wrapped around her finger… The Allman Brothers greet me this morning with their song titled: In Memory of Elizabeth Reed… There’s a story behind this song if you ever have the time to be on the Butler Patio, I’ll share it with you!

Well, Friday, was a day for the ages… The BLS’ version of a jobs report was something to write home about, and that pushed the markets to believe that the worst of the pandemic shutdown is over, and up went Bond yields, up went stocks, and down went the currencies, and metals, which got whacked as if they had done something bad… So, since Friday’s markets reaction was in response to the BLS jobs report, let’s go to it and pick apart with a fine tooth comb!

Well, weren’t you happy as a lark that the Unemployment Rate here in the U.S. dropped in May from 19% in April to 13% in May? Remember last week when I showed you the numbers? Didn’t I say then that I doubted that the BLS would show the same Unemployment Rate as the numbers should have shown? I showed that the number should be 27% Unemployment, but the BLS and their bag-o-tricks said it was just 13%…. Now, here’s a real kicker… The BLS added 345,000 jobs out of thin air for their report… Of course 345,000 jobs won’t make up the difference between 27% and 13%, but it gets us on the road of discovery… The numbers are what they are, folks… My dad used to tell me that “figures lie, and liars figure”.. I would have to put the BLS in the category of “liars figure”…

Now, you may ask why I get so frustrated with the BLS’s bag-o-tricks? Basically it comes down to honesty, and real markets…. We haven’t had “real markets” in so long now that I’ve forgotten what a real market is…. And when you have dishonest people issuing reports that gets people all wound up and they begin to forget about what’s real and what isn’t real, you get days like we had on Friday, when Gold was sold like funnel cakes at a state fair, and the dollar bugs danced in the streets…. That’s what you get when reality gets chucked to the road, and fantasy takes its place!

The Bureau of Lying Statistics… That’s my name for the BLS… They are as worthless as pay toilet in a diarrhea ward! I’m sorry but I’m so fed up with their B.S. that I have to call them out for what they are! And that’s a lying bunch of Government accountants! What a farce! And to have the markets take that hook, line and sinker, is just what I’ve been talking about all these years with these BLS reports, and how they move the markets so falsely…

So,, the currencies rally was derailed for a day, and the dollar bugs were dancing in the streets once again… Gold hot wacked! Along with Silver, but let just focus on Gold right now… Gold lost $28.90 on Friday, and closed at $1,684 on Friday… It’s so sad to me that these price manipulators keep getting away with murder, because that, to me, is exactly what they are doing… Of course, on Friday, the BLS was an accomplice to the murder, but they won’t be anywhere around the body when the CSI guys show up….

On Thursday last week, pre BLS, the currencies were the ones dancing in the streets, as the euro traded through the 1.13 handle, the A$ through the 69-cent handle and so on…  This misrepresentation of reality even fooled the bond boys, who are usually on top of things and act coolly during times like this, but this time they suckered into the cry of the day…  The 10-year Treasury’s yield rose from .69% to .91% in one day! That’s a huge move for bonds folks.

In the early morning trading today, Gold is up $8, and things seemed to have calmed down. I guess we’ll have to get through today to know for sure! 

The price of Oil has risen to a $39 handle, and that has the Petrol Currencies all lathered up and ready for the dance! Shoot Rudy, this morning is the first time I’ve seen the Brazilian real trading below 5! And the Mexican peso is trading with a 21 handle… These are number that we haven’t see in a month of Sundays, folks.. 

In my usual review of what’s being said on Twitter, I came across this excellent, albeit sarcastic, quote from my fave economist, David Rosenberg, who said on Twitter: “Americans pay $2T of taxes yearly. Equal to 9 weeks of Fed balance sheet expansion. So as Dr. Powell medicates the patient with unprecedented machinations, why not print the money and pay the IRS our taxes? Surely taxpayers deserve as much support as HY bond fund managers, right?”

I read that and said, OMG! What a great idea! If the Fed really wants to help the economy, get back on its feet…. Why don’t they offer to the Treasury to pay the taxes of the citizens of this country? Why not? He, Jerome Powell, has paid for the bad decisions, bad loans, bad everything of these Companies, thinking that’s the way to help the economy… Why not pay us for our having to deal with no savings rates, no real markets any longer, and being on house arrest for the last 3 months!

Ok, I’ve said enough there… no reason to continue, right? Oh, darn it, I’m on a roll let’s keep the ball rolling, keep the ball rolling, girl the name of the game is love… Wait!, no time for Jay and the Techniques this morning, I’m tring my best to be serious here!

So… what we have here is a bunch of liars, cheaters, and just all around bad guys and gals… I still can’t believe the gullibility of Traders, and how they took this data hook, line and sinker… And since I’m so upset by all this maybe I had better head to the Big Finish, eh?

The U.S. Data Cupboard has nothing for us today… and as the week goes on, there’s not much, but on Wednesday, there will be a FOMC Meeting Announcement… I truly don’t believe that the Fed heads have a rate movement on their minds at this time… We will get a press conference by Fed Chairman Jerome Powell on Wednesday, but if he has anything to say about this meeting it will all be lies, and make believe scenarios…

We’re in the middle of a recession, when will Powell and his merry band of Fed Heads realize this, and call a recession a recession?

To recap… The currencies got smacked, Gold & Silver got whacked, and it was tied to a erroneous Jobs Jamboree report that print last Friday… I went out of my way to explain how erroneous this report by the Bureau of Lying Statistics tried to throw out there to see how the markets would react… And they reacted by swallowing the BLS BS hook, line and sinker… Chuck is so upset by this misrepresentation by the BLS that he’s beside himself today!

For What It’s Worth…. I just talked about how ridiculous the BLS jobs report was, but Dave Kranzler, who used to bust my chops for stuff I wrote about nearly every day, is still writing, just like me, and he has some choice words for the BLS and it can be found here: https://investmentresearchdynamics.com/through-the-looking-glass-employment-report-fraud/

Or, here’s your snippet: “ The employment report is a complete fraud. But as long as the market and it’s army of mainstream story-tellers focus just on the headline number, unicorns do exist. But the Devil is in the details:
However, there was also a large number of workers who were classified as employed but absent from work. As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff. However, it is apparent that not all such workers were so classified. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue.

If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis). However, according to usual practice, the data from the household survey are accepted as recorded.

To Beyond that, there’s not much to say about this report. The numbers as presented are astonishingly implausible. It’s an insult to everyone’s intelligence for the Government and the main stream reporters and analysts to think that anyone with two brain cells to rub together would find this report believable. Ultimately, this attempt by Trump to stuff the ballot boxes early in the election cycle will back-fire – badly. maintain data integrity, no ad hoc actions are taken to reclassify survey responses.”

Chuck again… Dave had a great line for the BLS… Bureau of Lying Statistics… So I’m sticking with that from now on! I just can’t get over how suckered the markets were taken by this BLS report, but it is what it is, and now Gold needs to work to comeback from a large selloff because of the false number!

Market prices today 6/8/20: American Style: A$.6984, kiwi .6526, C$.7901, euro 1.1275, sterling 1.2660, Swiss $1.0386, European Style: rand 16.8038, krone 9.2674, SEK 9.2226, forint 304.93,   zloty 3.9290,   koruna 23.5610, RUB 68.64, yen 109.45, sing 1.3913, HKD 7.7498, INR 75.31, China 7.0809, peso 21.55, BRL 4.9575, Dollar Index 97.05,  Oil $39.31,   10-year .91%, Silver $17.66, Platinum $837.31, Palladium $1,955.43, and Gold… $1,693.86

That’s it for today… Not as long and wordy for Monday as usual… You can tell that I spent most of the weekend outside and not at my computer, reading and researching! I’m almost finished reading my book “Dis United Nations”… Man, Peter Zeihan, sure put some research into this book, and I guess it won’t be too much of a spoiler alert, to say that in the future, he sees The U.S., Argentina, France, Turkey, and Japan as the major countries in their respective regions…  Notice he didn’t say China, but said Japan instead? He thinks China has a real BIG problem that can’t be fixed…  My new book should arrive today, which is the history of Sam Houston…  With no new Harry Bosch, or Jack Reacher books, I’ve had to diversify my reading! HA   The Alan Parsons Project takes us to the finish line today with their song: I wouldn’t Want To Be Like You… And with that, I’ll say that I hope you have a Marvelous Monday, and well continue to Be Good To Yourself! 

Chuck Butler

 

June 3, 2020

* Currencies inch higher VS the dollar… 

* A$’s get the rug pulled out from under them…. 

Good Day… And a Wonderful Wednesday to you… As I sat there last night changing channels by the second, because I didn’t want to watch any more buildings afire, I thought… You know, this country has more good people that are nice, are fun to be with, and care about each other, than those that want to do harm to the country… Good, will eventually win out, I know it in my heart of hearts! June has brought us some very warm days to start the month, and after the cold wet spring we had, I’m all for very warm days! I can’t sit out in the sun as long as I could previously, but, I still get a good amount of Vitamin D each day…. The grandkids, all four of them, were here to swim yesterday. I guess with the local pools shutdown this summer, that I’ll be seeing those four rascals a lot! YAHOO! Journey, pre Steve Perry, as lead singer, greets me this morning with their rock classic: Of A Lifetime…. Now there’s a song that I’ll be that not too many people have on their iPods!

Another day…. Another day of the currencies pushing higher VS the dollar… I told you yesterday that the Aussie dollar (A$) and kiwi had both gained a full cent VS the dollar on Monday, and on Tuesday they repeated that Monday performance… The A$ was trading with a 69-cent handle yesterday… In April, the A$ was dropping daily, and reached a 63-cent handle, before turning things around… Once again, I’m happy for the A$ and kiwi to be rallying, but shoot Rudy, they have nothing to be rallying about! China is in a deep recession, and the rest of Asia is following China down the broken glass littered alley… So, be careful here, folks…. One of these days a trader is going to wake up and say, “Hey! How’d this happen?”  

And that may have happened in the overnight markets, as it was reported that Australia’s record run of 9 years without a recession, look to be coming to an end, as the 1st QTR GDP was negative -.3%, and with the second QTR forecast to be even worse, that would make a technical recession, of two consecutive quarters of negative growth…  And heaven forbid, but traders actually sold A$’s on this fundamental news!  Sure,  traders go ahead and pull out the fundamentals when they work for you, I see how you guys work! 

I just find that a currency getting sold or bought on Fundamentals is a rate occurrence these days, as it’s all about trader sentiment… 

There are only a handful of currencies these days, that pay interest on deposits… They include the Russian ruble… And as long as that’s the case, I’m going to hold on to my rubles, and keep rolling them over so that the interest that’s paid gets added to principal…. But after reading Peter Zeihan’s chapter on Russia’s future, in his book Dis United Nations, I’ll be watching them closely, that’s for sure!

Peter Zeihan believes that Russia along with Germany are in deep dookie going forward… And no I won’t give you a spoiler alert, as to what he sees these two doing in an attempt to revive their countries… 

Gold & Silver don’t pay any interest, but, to me their retention of wealth is important to me… I guess I woke up the boys in the band yesterday, when I asked the question of whether or not they had turned in their instruments… And as gold neared the $1,750 level, the boys in the band made sure it didn’t reach that price, and knocked Gold back by $12 on the day, with Gold closing at $1,727… And Silver, which had outperformed Gold, on a percentage basis, recently, got whacked, and finished the day below the $18 handle, which if held for a bout 4 days…

And both metals are still on the selling blocks this morning, with Gold down $7 and Silver flailing away…  What gives here? Oh, it’s just the same-0, same-0 with the price manipulators, folks, nothing new here, nothing to see, move along for these are not the droids we’re looking for… 

My good friend, Dennis Miller, the Retirementor, sent me a chart of the deposit yields on CD’s and Treasuries at his brokerage company…. Man, you talk about depressing! You would have to go out 10 years with a CD to get 1.%… You would have to go out 30 years with a Treasury to get 1.45%, and you would have to go out 30 years to get 2.4% in Agency bonds, (Gnma’s and the sort)…. And there are still people out there that would rather lock up their money in Treasuries, that may or may not have defaulted by ½-way through to maturity, instead of buying Gold & Silver… I’m just saying… that doesn’t make sense to me…

You know if I could have all Pfennig readers in a room, and ask to see a show of hands of those that own Gold or Silver or both, I’m quite certain that 90% of the people in the room would raise their hands… I guess when I bang on people about buying Gold & Silver I’m preaching to the choir… But I figure if I give them enough fodder, they’ll feel confident to talk to their neighbors or friends, or family about the subject of Gold & Silver as a store of wealth…

Well the price of Oil shot higher yesterday and traded with a $37 handle, yesterday. And just as I suspected, the Shale producers are sniffing around once again, getting ready to go full throttle on fracking , once the price guarantees them a profit…. And our friends at OPEC (NOT!) were just talking about extending their production cuts… Hmmm… You know, as I said the other day, the Saudis are looking to put the Shale Producers out of business for good, as they, the Saudis, can deal with a cheaper Oil price, than a lot of their competitors… But somebody should have explained to them that less supply equals a higher price, and vice versa… And a higher price brings the shale producers back into the mix…. I’m just saying…

Nearly 40 Million people out of work in the U.S. in the last 8 weeks, and the stock jockeys keep keepin’ on… Nothing seems to bother them, no awful economic data will stop them, no people working will stop them, no corporations  not making profits will stop them… What?, the stock you own is from a company that can’t keep their lights on, and it keeps going higher? What does that remind you of? Come on, it wasn’t that long ago… Yes… The Dot.com bust…. Remember all those dot.com companies that never turned a profit, but their stocks were soaring higher, until one day, someone with an ounce of gray matter, said, “you know there’s something that’s not right about this” And soon trillions of dollars were lost, a lot of those dot.com companies were never to be heard from again, and here we are 20 years later, and investors are falling into the same trap…

Well… The currencies just can’t stand prosperity….  While the euro is nearing 1.12 this morning, the rest are just wallowing in the mud.  The Russian ruble is back to moving in the right direction. The Japanese yen, has finally moved past the 107 handle! It sure seemed that yen was going to remain in that 107 handle for-ever!  Reminded me of when I first began trading foreign bonds, and writing the Pfennig… Everyday it seemed that the yen was trading with a 130 handle…  And then one day, it wasn’t any longer! 

The U.S. Data Cupboard today has the ADP Employment Report for May, and I think they’ll say that in the month of May the U.S. lost 10 Million jobs… As I’ve explained before, this ADP report is supposed to be the precursor to the BLS report that will print Friday morning. As it turns out the ADP report is probably more reliable than the BLS report… But then it’s another case of Apples and oranges… with the BLS cutting off mid month to mid month for their report, and the ADP using the actual numbers from the previous month… So, don’t get your hopes up that just because the ADP report shows less lost jobs in May, because the BSL will have something up their sleeves… right Bullwinkle?

U.S. car sales have fallen into a deep dark hole… But what did anyone expect, people were told to stay home, and that meant not going out to buy a new car! I know they have those new apps for your phone that allow you to buy a car and have it delivered to you…  Well, when all cars are made infallible that might work, but for now, a buyer has to go out a “kick the tires”…  So, car sales take a major hit in May, but at least they were better than April’s numbers!  

I’m still getting 3 weeks to a gallon of gas with my car….  Besides June of 2007 after my cancer surgeries, I’ve haven’t had a period of time when I drove my car less….  I love to drive, that’s the problem… I remember the first time I drove my car, when I was 16… I had bought a 1964 Ford Falcon, that barely ran, but it was mine, and the first time I took it out, that feeling of freedom, with the wind blowing through my hair… I still get those feelings sometime when I drive…  I have a funny story about that car if you have a minute to spare I’ll tell it to you…

The girl next door, Ann, needed to go to work one day, and me being the ever-helpful young man, decided to offer to drive her to work.  So, we left, and I made the first right turn, hit a pot hole, and the gear shift, fell off and into my lap… She said, “Does that happen all the time?”  Well, it never happened again after I got the duct tape out! 

To recap… Well, the currencies inched higher yesterday, once again, but have backed off a bit this morning. Gold  is still on the selling blocks after losing $12 yesterday, the shiny metal is down another $7 this morning. Chuck talks about rubles, euros and A$’s this morning, and then talks about how the current stock market reminds him of the dot.com market of 20 years ago… 

Before I go to the Big Finish, I wanted to mention that my good friend, Dennis Miller, will be printing his interview with yours truly, tomorrow, for those of you who still don’t receive Dennis’ letter (for free!), you’ll still be able to see what I said, by clicking www.milleronthemoney.com 

For What It’s Worth… When I find myself in times of trouble, I turn to longtime friend, and publishing guru, Bill Bonner, to show me the light, and that’s where I was yesterday… So, I pulled up his website to see what he had to say, and, well, he had a lot to say!  So, if you want some Bonner this morning, click here: https://www.rogueeconomics.com/bill-bonner-diary/america-is-marked-by-health-emergency-economic-recession-social-unrest/

Or, here’s your snippet:” You’ll remember our dictum: “When the money goes, everything goes.”

Huh? You wonder. What’s this got to do with money? Isn’t this just about racism and police brutality? In short, we wish.

The monetary foundation of the U.S. (the Federal Reserve balance sheet) began the century at only $674 billion. That is where it had gotten since the Fed was set up in 1913. Now, it is $7.1 trillion, and it’s headed to $10 trillion by the end of the year.

And now, every crisis, every calamity, and every disaster, caused by the feds themselves, will be met with more money-printing… and more war. The war on terror… the Mortgage Finance Crisis of ’08-’09… the war on COVID-19 …

Each time, the feds go back to doing the only thing they know how to do… the only thing that increases their power and enriches their friends – running the printing press.

And each time, they make the situation worse.

The current round of riots and lawlessness, for example, are probably not just a reaction to another killing by the police… not just the work of a few subversive groups… and not caused by the Russians (as Susan Rice claims), nor by our “foreign adversaries” (whoever they are) as suggested by Donald Trump.

Instead, they are an inchoate reaction by millions of Americans to an inherently corrupt and unfair system.

“Racism” is something they understand. They were indoctrinated about it in school.

But “racism” may be just a rallying cry… a trigger… a focal point… for deeper bitterness and resentment.

Money represents time… and life. And when people can’t trust it, they lose faith in their institutions, in the system, and in each other.

The center cannot hold. The masses become more extreme in their opinions… some wanting to tear down the “capitalistic” system… others wanting to protect it at all cost.”

Chuck again… OK, you’ve got to… or as Otis Redding would say, you gotta, you gotta, check out the whole piece by Bill…. He ties it all together in a nice bow that makes sense! 

Market Prices today 6/3/20: American Style: A$.6871, kiwi .6381, C$ .7380, euro 1.1197, sterling 1.2570, Swiss $1.0376, European Style: rand 17.0509, krone 9.5425, SEK 9.3411, forint 309.02, zloty 3.9393,   koruna 23.7878, RUB 68.82, yen 108.58, sing 1.3984, HKD 7.7500, INR 75.17, China 7.1063, peso 21.65, BRL 5.2972, Dollar Index 97.59,  Oil $36.02,   10-year .69%, Silver $17.90, Platinum $840.66, Palladium $1,950.11, and Gold… $1,720.11

That’s it for today…  I’m so upset by the low road that both the MLB players and owners have taken in regards to a deal to play this year… I guess I should have known this would happen, given their history, but I thought in this time of a pandemic, and people needing an outlet so badly, that they would see this almost like a relief effort, but Nooooooo!  This week will be the go/ no go decider, so hopefully they can get their acts together!  Kansas takes us to the finish line today with their song: Carry On Wayward Son… Kansas was HUGE in the 70’s…  But then Steve Walsh, went solo, and well the rest is history… And with that, I hope you have a Wonderful Wednesday and rest of the week…. Yes, no Pfennig tomorrow, as an early trip to the wound center is on the docket for me… But please, Be Good To Yourself! 

Chuck Butler