China To Ban Cryptos?

May 19, 2021

* Currencies & metals drift on Tuesday

* And start today in the red… 

Good Day… And a Wonderful Wednesday to you…. This is the last Pfennig of this week, as tomorrow, bright and early I have to report to the hospital for a new set of scans…  Cardinals got back on the winning side last night… I have one question for Cardinals fans… What would we be doing without Nolan Arenado this year? This guy is fun to watch play baseball folks… there’s really not that much to talk about today, so hopefully something pops up, or else this will be short-n-sweet…  The Turtles greet me this morning with their hit song: She’d Rather Be With Me…. “some girls love to run around, like to handle everything they see, but my girl, has more fun around, and you know she’d rather be with me”… 

OK… before we go to the markets, which didn’t rally excite anyone yesterday with movement, I have a couple of things on my mind that I’ll touch on quickly….

  1. Bank of America is raising their min. wage to $25 to attract potential hires…
  2. Fidelity announced that they will allow teenagers to trade stocks

I could rant and rage about these things, but I’ll just let them simmer on the stove for now, and allow you to come up with all that could go wrong here with these decisions…

So… The currencies never found a strong bid yesterday, after the overnight markets on Monday night took them higher VS the dollar.  The BBDXY rose to 1,116.47 from 1,115.74 in the moring, and the old Dollar Index dropped from 89.84 to 89.83… So, with either index you can see the moves were muted at best… The euro had the best day, rising higher in the 1.22 handle, and I don’t know if you’ve been watching this currency, the forint, in the market prices roundup, but the forint has really been on a mission from God, to move higher VS the dollar… 

And then, longtime readers will recall that I’ve always said that a true dollar selloff will see the Euro Wannabes (forint, zloty, and koruna) rally ahead of the other currencies, and that’s what they are doing right now… So.. the $64 dollar question remains, “does the PPT come back in to protect the dollar again?” And if yes, then “when”? Because, like I said the over day, when the dollar is entrenched in a weak trend, it’ll be too late for the PPT to try and defend the dollar…  Oh, they’ll still attempt to change the markets collective minds, but it will be of no use…

Gold & Silver also were forgotten about yesterday, and they spent the day back and forth between loss and gain. But at the end of the day, Gold was up $2.70 to close at $1,870.10, and Silver was up a whopping 2-cents to close at $28.25… Positive yards gained… Remember how I’ve explained that a football team on offense must gain positive yards or else find themselves behind the chains… And the same goes for Gold & Silver.. positive gains VS the dollar prevent being caught behind the chains…  I’m just saying…

In The overnight markets last night… there wasn’t the emphasis to sell dollars last night as there was the previous night, and so the currencies drifted in the overnight markets with the BBDXY rising to 1,117.69 this morning from last night’s close of 1,116.47… So, as you can see the move to buy dollars overnight wasn’t with any kind of conviction. I think traders were scared that the Fed’s Meeting Minutes that will print today, will reveal some secret to help the dollar…  I think they are way off base here, but, with the dollar buying muted, I won’t lay it on too thick for them… 

Gold is down $7.20 in the early trading this morning, and Silver is down 48-cents to bring it back below $28…   I don’t see anything as to why this is going on. The only thing I’ve seen is a story that talks about how China is attempting to ban cryptocurrencies…  I found this: “According to the PBOC’s official WeChat account, cryptocurrencies should not be used in financial markets or the real economy because they are not “real” currencies.”

That’s China getting the groundwork to ban the cryptos before the make a country wide distribution of their digital renminbi / yuan…  I can’t say that surprises me on iota, for I’ve long said that once Countries develop their respective digital currency, they will take steps to ban the existing cryptos to eliminate any competition… The same will be done here in the U.S. I’m darn sure of that! 

This news has caused some further slippage in Bitcoin this morning, and because of that I would have thought Gold would be the beneficiary of that slippage… See how I circled back and tied this all up with a bow?  Genius, writing, don’t you think? HAHAHA!  As if! 

The U.S. Data Cupboard yesterday had the April Building Permits and Housing Starts… Permits were flat with last month’s number, and Starts were down from March…  Today’s Cupboard has the Fed’s Meeting Minutes, from their last meeting, which yielded nothing new, and so I don’t expect these minutes to have any earth shattering news in them!  And former Treasury Sec. Lawrence Summers, will be speaking in Atlanta…  I wonder what he has up his sleeve?  Maybe I should ask Bullwinkle about that? HA!

To recap… It was a day to take 5, for the currencies and metals, after seeing a huge selloff in the dollar in the overnight markets the night before yesterday, there was no follow up from their U.S. counterparts… Chuck is concerned about two announcements yesterday, and left it up to you dear reader to figure out what the problems might come these decisions…

For What It’s Worth…  This information and website came to me curtesy of a former colleague, Neil George, and it’s about how much a resident of a state can expect to pay in taxes in their lifetime in that respective state…  The graph is very useful as it breaks down the different taxes in a state, and the article can be found here: Life of Tax: How Much Tax is Paid Over a Lifetime | Self.

Or, here’s your snippet: “The US government collects over $5.3 trillion in taxes each year, but how much will the average American pay in taxes throughout their lifetime?

We used the Bureau of Labor Statistics’ expenditure numbers to see what we as Americans were spending each day to work out what taxes we would be paying until we’re no longer able to contribute financially. It’s a lot.

We’ve analyzed this data specific to each state so you can see what you may be giving to your local government in taxes across your entire life.

The average American will pay $525,037 in taxes throughout their lifetime

That’s an average of 34.3% of all lifetime earnings spent on taxes

Residents of New Jersey will pay the most in lifetime taxes ($931,000) and people in West Virginia will pay the least ($321,000)

Tax on earnings is where most tax will come from, with the average American paying $339,173 in a lifetime

Owning a car will cost an additional $29,521 in tax payments alone

Tax on property will set you back an additional $128,581 above the property price and maintenance

Tax payers in California will pay the most on everyday expenses ($40,084), followed by New Yorkers ($39,745)

Using our state averages, we can see that the average American will pay $525,037 over their lifetime, almost 65% of this will purely be tax on earnings. This amount varies drastically by state but uses averages for earnings, expenditures, property and auto taxes.”

Chuck again…  Ok, for all of you who live in states with high tax rates, the thing that comes to mind is…. Move! But I for one know how difficult that would be. In my instance, my kids and grandkids all live close to me… If I were to tell Kathy that we were going to move for tax breaks, she would file for divorce! Just kidding, she really loves me… HA!   But you get what I’m saying… 

Market Prices 5/19/2021: American Style: A$ .7758,  kiwi .7201,  C$ .8275, euro 1.2216, sterling 1.4181, Swiss $1.1108, European Style: rand 14.0319, krone 8.2636, SEK 8.3125,  forint 287.32,  zloty 3.7058,  koruna 20.8391, RUB 73.71, yen 109.12, sing 1.3311, HKD 7.7642, INR 73.16, China 6.4253, peso 19.90, BRL 5.2635, BBDXY 1,117.69, Dollar Index 89.88,  Oil $64.56, 10-year 1.66%, Silver $27.78, Platinum $1,217.00, Palladium $2, 942.00, Copper $4.65, and Gold… $1,862.90

That’s it for today… See? I don’t have to always go ballistic on news items out there!  I’m still ailing with the pulled muscle in my stomach, it is being suborn about healing, and every time I move, or worse, have an allergy cough, OWWWWWW!  I wonder what will show up on the scan tomorrow? One time years ago, right after I was first being treated for cancer, I had a real bad cold, and then wen for scans, and the oncologist thought my lungs had a cancerous mass in them, when it turned out I had pneumonia… A 5 day supply of steriods wiped that out, and all was good!  I guess I would take pneumonia over lung cancer any day!  Well, our monsoon season, which was supposed to take place in April, but has occurred in May, is leaving us today, and the sun is supposed to come back out. YAHOO!  I heard last night that Evie and Braden are spending the night with us Friday night… YAHOO! Monday night at dinner she kept pointing to me, and waving hi from across the table, all the while with that beautiful smile she has… And this visit will allow me to let her crawl up in my lap and sit there while I read her books! And Braden turns 10 on Sunday!  Happy Birthday, little buddy! One of my top 10 all-time loved songs from the Blue Jays, takes us to the finish line today with their song: I Dreamed Last Night, man I DO love this song! I hope you have a Wonderful Wednesday, and rest of the week, and I’m sorry no Pfennig tomorrow…  I hope you will Be Good To Yourself!

Chuck Butler