Closet Searching For Leisure Suits…

Rocktober 3, 2018 

* Chuck talks currency trends…  

* Gold jumps higher! 

Good Day… And a Wonderful Wednesday to you! Well, my first couple of days of 2018, in withdrawal, went OK… I’m withdrawing from my dependence on my beloved Cardinals, for they missed the playoffs again this year, and now I have to sit and watch other teams play. UGH! I did receive my order form for my Spring Training Tickets though, so that warmed my heart a bit thinking about watching my Cardinals play again… The Beatles greet me this morning with their song, from the Sgt. Pepper’s Album: She’s Leaving Home…

Yesterday, was kind of the day to take a big breath, and get ready for what’s coming next, whatever it may be… The currencies didn’t really move much, although they did wrap a tourniquet around the wound the dollar caused the previous day. I saw a headline article yesterday from a trader who said that investors should get ready for a HUGE breakout price movement from the dollar. And I immediately thought to myself, he must be a youngster, having never experienced anything than the current situation, and never studying history, for if he had he would know that currencies move in trends, and the strong dollar trend is nearing an end, for it has been in place since 2011, when the hidden debts of Greece were exposed…

He might also find out that during one of the most interesting periods of time in American history, were the 70’s… (if someone hadn’t come up with the idea for disco music, the 70’s would have much higher marks!) Let me explain… In the 70’s inflation followed a period of stagflation, and once inflation got moving higher, it took off to the moon, and it wasn’t tamed until interest rates in this country rose to 20%… And during that time? The dollar was sold like funnel cakes at a State Fair, and Gold soared…

I point that out because I’m so convinced that were going to revisit the 70’s with the economy… So, dig through your closet and find those bell bottom jeans, and leisure suits, and platform shoes… And while you’re looking make sure you pull out that WIN button.. (whip inflation now)!  

In fact, the 70’s had the first weak dollar trend, that lasted from August 1971, when the dollar was allowed to float, as Richard Nixon removed the Gold backing of the dollar, and lasted 7 years, until 1978, when with interest rates at their highest level investors all over the world flocked to U.S. Bank deposit accounts, CD’s and what have you… The trends have gone roughly like this… 1971-1978 weak dollar trend, 1979-1985 strong dollar trend, 1986 -1995 weak dollar trend, 1996-2001 strong dollar trend, 2002-2010 weak dollar trend, and 2011 to now, strong dollar trend.

So, I just think that we’re going to revisit the 1970’s again with inflation soaring to the moon, the Fed chasing it higher and higher, and the dollar getting sold like funnel cakes at a state fair, and this time it could get really ugly, because in the 70’s when Paul Volcker hiked rates so often, even resorting to hiking them on a Saturday night, the U.S. had little debt, certainly not the size of debt it has now that it has to finance… Think about that for moment, let it sink in, and then I’ll remind you… Got Gold?

Earlier this week I told you that the Ford Motor Co.’s CEO had told reporters that the Trade War’s tariffs were going to cost his company $1 Billion… Well, yesterday, car sales data printed… Something strange, in my opinion, is that GM has decided to not report monthly numbers any longer, instead choosing to go to quarterly numbers… Well, Their quarterly numbers can be broken down right?

So, here’s the report card as reported by… “Automotive News estimated that GM’s September deliveries plunged 15.8% to 235,228 vehicles, with GM Silverado pickup sales down 19% (44,960) and Sierra pickup sales down 35% (11,724). These are hot vehicles – or should have been.

Ford reported that sales in September dropped 11.2% to 197,404 – with deliveries at the Ford brand down 11.3% (189,236) and at the Lincoln brands down 7.2% (8,168).”

Chuck again… like I keep telling people… the Trade War with China is going to hurt both countries’ respective economies… This is just the beginning folks…

I read an article last night that said that soon the U.S. will be spending more on bond servicing (interest payments) than they spend on the Military, Medicaid, or children programs… And that’s with interest rates at 2.25% for short term and 3.07% for 10-years… Imagine, if you will, if interest rates were actually normalized… say, 5-6%?   OMG!  

OK, I’ve got to talk about something else here, or I’ll begin to swear, and throw shade at everything and everybody involved with this mess… But not to worry, Fed Chairman, Powell, says everything is seashells and balloons…  My A%# it is… but… that’s what the sheeple want to hear, not the stuff I write… Only people that want to know the truth, read my letter…  

Well, Gold finally had a good day, actually climbing more than $14 on the day, and at one point it was up about $23, before some of the 344,000 contracts traded in Gold brought the shiny metal back down to earth. 

And the price of Oil slipped a bit, but is still trading with a $75 handle this morning… With the slippage here, the Petrol Currencies weren’t able to add to their recent gains.  The Dollar Index moved from 95.63 yesterday morning to 95.54 this morning, so although, as I’ve explained a number of times through the years, the Dollar Index isn’t the best indicator of currency movement, it’s not completely worthless!  And a lot of fund managers still use it, so there you go! HA!   

All the U.S. Data Cupboard had for us yesterday was the aforementioned auto sales data… Today is Fed speaker day, with no less than 5 different Fed Heads out on the speaking circuit… Oh, and the ADP Employment Data for Sept. will print… This data is supposed to give us an indication of what the BLS will print on Friday… The problem with that thought is that one never knows what the hell the BLS is going to pull out of their sleeve! 

To recap… It was a nothing day for the currencies yesterday, as they wrapped a tourniquet around the wound the dollar inflicted on them on Monday and rode out the rest of the day with tiny gains… Gold however gained more than $14 on the day!  The price of Oil slipped a bit, but no great shakes, and Chuck goes through currency trends, and points to the 70’s as our poster decade as one he believes we are about to relive… 

For What it’s Worth… I’ve fought a long and difficult battle against the naysayers of Gold & Silver Price manipulation… I’ve presented proof after proof, and they shrug it off and say it doesn’t prove anything… I wonder what they’ll come up with after seeing the article that the GATA folks sent me yesterday that highlights Bank of Nova Scotia admitting their traders “rigged the Gold & Silver markets”… The article can be found here:

Or, here’s your snippet: “The evidence continues to mount proving the work that GATA has performed for the past two decades is, not only 100% accurate, but shows how much a part of our world gold actually plays. Don’t think for a minute that gold is not part of our monetary system. If it weren’t these price rigging schemes would not happen – especially on a global basis.

We reported on Deutsche Bank two years ago – click here – click here – click here – when their precious metals market rigging schemes were exposed and the bank was “fined” for rigging the gold market. During the investigation it was also discovered Deutsche Bank was rigging the silver market. A series of internal instant messages confirmed the rigging mechanism and the fact the price rigging was actually happening.

Now we learn the Canadian based Bank of Nova Scotia has now been caught with their hand in the cookie jar and charged with “spoofing” the gold and silver markets.”

Chuck Again… When will this stuff be stopped? BNS was only fined $800,000 for these illegal trading programs… Now $800,000 is a lot of money, but no where near where the fines and to go further the jail sentences should be for these types of crimes against people and their investments!

Currencies  today 10/3/18… American Style: A$ .7150, kiwi .6556, C$ .7795, euro 1.1548, sterling 1.2974, Swiss $1.0126, European Style: rand 14.3895, krone 8.1834, SEK 8.9913, forint 279.70, zloty 3.7206, koruna 22.3279, RUB 65.26, yen 113.83, sing 1.3762, HKD 7.8378, INR 73.31, China 6.8679, peso 18.79, BRL 3.9778, Dollar Index 95.54, Oil $75.18, 10-year 3.07%, Silver $14.78, Platinum $833.55, Palladium $1,054.60, and Gold… $1,203.38

That’s it for today… It took 13 innings for the Rockies to defeat the Cubs in the Wild Card game last night… the tension was so thick you could cut it with a knife! I’m hot happy about this being the last season for the TV Show The Big Bang Theory…  That sure was a long run for that show! Well, the NHL hockey season is about to start… Let’s Go Blues!  Ever since our football team was stolen from the city, and if the Cardinals don’t make the playoffs, the focus shifts to the start of the NHL season! Live takes us to the finish line today, with their song: Selling The Drama… Live had a great first album, a not as good 2nd album and then fell of the face of the earth… At least as far as I’m concerned…  So, there you go with that bit of info! HA! I hope you have a Wonderful Wednesday, and remember to Be Good To Yourself! 

Chuck Butler