Countdown To A Rate Hike…

Chuck Butler’s: A Pfennig For Your Thoughts 

December 12, 2017  

* Dollar resumes its rally…

* An Engineered takedown?

* A short-n-sweet Pfennig today… 

Good Day… And a Tom Terrific Tuesday to you! Another day, and another late edition of the Pfennig… UGH! I don’t know where the mornings go any longer… Instead  of me getting up and making my way to the writing desk and my laptop, I get up and begin the process of giving myself antibiotics through a PICC-line… Sound easy, and it is, but it’s time consuming, and before I know it, the morning is almost gone, and I haven’t gotten the Pfennig out yet! UGH!  Today marks the halfway mark of the 6 weeks that I’m scheduled to doing this, so I ask that you stay with me for 3 more weeks, and then things should be back to normal… Maybe…  ’cause you never know!   Robin Trower greets me today with his song: Bridge of Sighs…  

I don’t like doing this, but given the lack of news, and the tardiness of the Pfennig, this will be a short-n-sweet edition today.

Well… The board games have been taken off the shelves at the Eccles Building, and the Fed members are busing playing Sorry, Battleship, and Monopoly today. Longtime readers know that I’ve kidded about this for years, and it all started when in an interview, I was asked, what I thought the Fed members were talking about for two days?   I replied, that they must be playing board games, and I can hear one of them saying now, “by Joe, you’ve sunk my battleship”!  

So, today begins the two-day FOMC meeting, that will culminate in a rate hike tomorrow afternoon… I’ve put my tail between my legs on this one folks… I still think it would be the prudent thing to do, to bypass the rate hike now, and wait to see what the lawmakers do about a budget. But since when does the Fed do the prudent thing? 

The “boys in the band” have used this market thinking that a rate hike is in the cards tomorrow, to pile on the short paper trades, so much that now real Gold and Silver investors are panicking and selling… Don’t do that! Do not panic! If you need to sell, then sell, but don’t panic!  This is just an engineered take down of Gold & Silver to test the managed money holders’ resolve…  Gold lost nearly $7 yesterday and is down another $7 today… 

But, here’s the thing that bugs me… yesterday’s low came in the after markets trading… The “boys in the band” are really getting brazen with their trading, folks, and just like the criminals that Elliot Ness used to chase on TV years ago, once they become cocky, they expose themselves, and get caught… We can only hope that someone with some intestinal fortitude, stands up and says, “This is a crock!” “And I’m not going to stand for it any longer!”   

Well,  yesterday I told you that I thought the dollar rally would resume again any day, after taking a two-day breather, and in the overnight markets that’s what happened, but the move isn’t really BIG at this point, but it sure feels like it’s going to burst out soon…  The Dollar Index  had moved over the 94 handle to 94.19 this morning, yesterday it was 93.88, and last week, it was in the low 93 handle before all this dollar buying began. 

And I really don’t have much more to say about that today… I could go on and on about how it’s really not a smart thing to do to hike rates when you want inflation to rise, but I’ve done that many times in the past, so I’ll just leave you with that thought once again today… 

And the Data Cupboard isn’t giving us any clues or ideas as to where the currencies should be trading. Yesterday’s Cupboard was bare, and today’s only has the Federal Budget, which we already know will be a deficit, and PPI (wholesale inflation), which I expect to be a little stronger than the average bear.  But other than that, there are no real economic data prints, as they data schedulers have cleared the deck for the Fed announcement tomorrow.   

To recap…  The dollar has the conn again this morning, and everyone is of the belief that the Fed will hike rates tomorrow afternoon… Chuck points out that it’s not the prudent thing to do right now, but has given up the ghost on his holding out on no rate hike… UGH!  Gold & Silver are seeing engineered takedowns, in Chuck’s opinion, so don’t panic!  

Before I head to the Big Finish today, I wanted to talk about this… I was very bummed out when my favorite Cardinals player that I got to see his entire career, Ted Simmons missed the Hall of Fame election by one vote! Ted and I worked together (in his offseason) back at Mark Twain Bank in 1981.. What a great guy! And at that point he had been traded to the Brewers by Whitey Herzog. I was never going to forgive Whitey for that move, but then he won the World Series in 1982, against the Brewers, and while not all was forgiven, some was… But if you ever want to compare Ted Simmons’ stats VS other catchers that are in the HOF, go ahead, and you’ll be amazed that this man is not in the HOF… It’s shame, and a black mark on the HOF committee! 

For What It’s Worth…  I haven’t really had the opportunity yet to really dive into the Tax Reform Bill, but my long time friend, Bill Bonner did, and here’s his take on it, which can be found here:  

Or, here’s your snippet: “But the broad brushstrokes are so obvious, they must be visible from outer space: It is a scam.

Its real effect will be to enable the transfer of trillions of dollars more from the productive economy to the zombies, cronies, and Deep State insiders… leaving slower real economic growth and leaving most people poorer.

Yes, some people will benefit in the short run. But most will suffer as the years pass… as the tax bill will add $1.8 trillion or more to U.S. debt.

Then, with lower tax revenues and rising expenses from 70 million retiring baby boomers, the country will go broke.
Could foreigners do that? Unh-unh… This is a Made in America disaster.” 

Chuck again… Thanks to Bill for doing some of my work for me! HA!  But $1.8 Trillion to our national debt? I told you that I would find that the Bill was not revenue/ debt neutral as it was billed to be!   

Currencies today 12/12/17… American Style: A$ .7550, kiwi .6928, C$ .7765, euro 1.1727, sterling 1.3318, Swiss $1.0078, … European Style: rand 13.7016, krone 8.3651, SEK 8.4418, forint 267.75, zloty 3.5917, koruna 21.8575, RUB 59.08, yen 113.65, sing 1.3534, HKD 7.8063, INR 64.50, China 6.6156, peso 19.18, BRL 3.2916, Dollar Index 94.19, Oil $57.69, 10-year 2.41%, Silver $15.69, Platinum $875.69, Palladium $1,008.88, and Gold… $1,008.88  

That’s it for today… Well, the doc says I’m doing great! took the stitches out, and sent me on my way! Thanks to darling daughter Dawn for taking me and then having to wait through the whole process… I’ve been given the green light to drive now, but getting in and out of a car is still a major ordeal for me, so for now, I think I’ll stay put… Alex stopped by last night to check on me… I’m so proud of him, he has really grown into a great  person. I now have three adult children who I can’t say enough good things about each of them…  I’m proud of all of them… OK, enough of the sappy stuff, Buddy Miles takes us to the finish line today with his redo of the Neil Young song: Down By The River…   Thanks for reading the Pfennig, even when it’s so late! I hope you have a Tom Terrific Tuesday, and Be Good To Yourself! 

Chuck Butler