Currencies Continue To Drift…

February 4, 2021

* Gold & Silver are getting sold this morning… 

* The waning years of the Empire of Debt? 

Good Day… And a Tub Thumpin’ Thursday to you! Another nice win last night from my beloved Missouri Tigers basketball team, and they beat Kentucky! They have a big challenge on Saturday, when they’ll play the number 1 team in the SEC, Alabama… I’ll be glued to the TV for that one! I really don’t know where the day went yesterday… I never left the condo, and wore a heavy jacket all day, for it was chilly in the condo… One of my condo neighbors brought me a piece of cheesecake yesterday, as his wife was worried about me… I put it in the fridge, because I can’t eat sweets, so it’ll be there for Kathy returns on Sunday. But that sure was nice of Gloria to be thinking of me… I guess when people here don’t see me sitting out on the deck reading during the day, they begin to think that maybe something has gone wrong, as they all are aware of me having cancer… The Eagles greet me this morning with their classic rock song: Hotel California… “There she stood in the doorway, I heard the mission bell, and I was thinking to myself this could be heaven or this could hell.”

What on earth is gong on these days with currency traders? Are the waiting for a particular piece of data, like maybe the Jobs Jamboree tomorrow? Or, is it something else? I think that my thought earlier this week that the currency traders were between a rock and another rock, couldn’t possibly be still the case 3 days later, could it?  Crazy questions to ask so early in the morning, eh? But Inquiring Minds Need To Know! In the old days when I was trading for Mark Twain Bank, then Mercantile Bank, then EverBank, I would simply pick up the phone and call a trader friend and the scoop on what was on traders’ collective minds. But when I left EverBank,  I left behind all those phone numbers, and email addresses of the traders I knew… Not that now that I’m not associated with a firm that does currency business with the they would talk to me… But you never know!

So, with that intro… The currencies drifted again yesterday… no bid, no offer… and no direction… And I doubt the Bank of England (BOE) Monetary Policy Comm. Meeting this morning will have any say in the directionless currencies. And in fact, while I’m writing the BOE announced that they weren’t changing a thing…   And in the Eurozone will print their Retail Sales report for December… I don’t know, but I’m thinking that the Eurozone will not print a negative Retail Sales for December like we did here in the U.S.   But again, I doubt this will have anything to do with what the dollar and the currencies do today…

Gold & Sliver didn’t fare any better than the currencies yesterday, as Gold closed down $3.60 at $1.834.60, and Silver closed down 17-cents to $27.15…   Last night before I went to bed, I checked the metals and Gold was down $11 and Silver down 30-cents bringing Silver back below $27…  It seems to me that the crowd buying of Silver has petered out… And we’re back to normal demand for the metals, which lately hasn’t been there… I would think that with these much cheaper prices in Gold & Silver that buyers would be lining up…  Oh, and the word I heard from the anit-short sellers, is that they aren’t finished yet with Silver… So, maybe they can move the price a little higher again, but if the price Manipulators get angered, watch out!

In the overnight markets, Gold continued to slide further down and is now down $20, and Silver is down 50-cents… And the euro, which in the past few days has seen more traders turn their nose up at the single unit, has dropped below 1.20..  The rest of the currencies haven’t moved much, but their leader is takin on water this morning… 

Strange days indeed…  Stocks keep rising, Bitcoin, after a brief selloff, keeps rising, and both are in my mind scams, that one day will come to light… But for now, it’s jump on the bandwagon or be left behind… The problem with that thought is much like the common folks that got into the rally 21 years ago, only to buy at very inflated prices, and then see the rug pulled out from under them, the dot.coms crashed and the late arrivals to the rally were left holding the empty bag…  And I see history repeating itself here folks.. .You know history may not repeat itself, but it’s always near the scene of the crime…

And with aircraft carrier units sailing in the South Pacific heading toward China, Gold can’t find a bid… Is there some secret plans I don’t know about, to stay away from Gold?  I would guess the folks in China, India, and all over Asia haven’t gotten the memo then…  For they certainly are keeping the demand for physical Gold going strong…  Russia has been out of the Gold buying business for almost a year now, as they stopped buying when the Covid-19 virus became a global problem last spring.  But Russia has done a ton of physical Gold buying in the past few years, and the last count of their Gold bars had their value higher than any currency that Russia holds in reserve… Which is pretty much void of dollars, but they still hold a ton of euros, yen, sterling… The famous trio of currencies that I used to use in my  presentations as examples of diversification… No wait, not sterling, but Swiss francs!  Yeah, that’s the ticket!

As far back as 2005, Bill Bonner & Addison Wiggin authored a book titled: Empire of Debt…  They did an update in 2009, with a second edition. But the original idea has stood the test of time, and these days more and more people are talking about the declining Empire (the U.S.) because of debt, and sending its military all over the world, and if they were updating the book today they would be able to include currency printing & fake money…

In his daily writings, Bill Bonner, still goes back to his thought that the U.S. is an Empire in decline, having reached its APEX in 2000…    And since I read the book 15 years ago, I have been on board with his thoughts that the U.S. is an empire in decline…   These things don’t happen overnight folks, and even today 15 years after printing the 1st edition of his book, the U.S. is still showing signs of decline… If you haven’t read this book I’m talking about, you should go to wherever you order books and get it ordered to read it and then when I talk about things like this you’ll be on board with me!

Don’t cry for the U.S. declining Empire, this has been going on for years now…  Some people think that the Empire began after WWII…  But check this out that I pulled from the site: “Americans were not always so ignorant of the imperial nature of their country’s ambitions. George Washington described New York as “the seat of an empire,” and his military campaign against British forces there as the “pathway to empire.” New Yorkers eagerly embraced their state’s identity as the Empire State, which is still enshrined in the Empire State Building and on New York State license plates.”

Ok. Onto other things on my mind…  In a very strange twist of fate or events… Iran which had a law in place to not accept any vaccines from the West, decided to skip over that law and order the Astra-Zeneca vaccine… When events are dire…  

American Airline has announced that there will be 13,000 layoffs come this summer when the airline travel slows…. Who wants to make a bet with me that these 13,000 layoffs don’t show up in the BLS’s Jobs Jamboree when the time comes?  I say they won’t, what say you?

The U.S. Data Cupboard saw the ADP Employment Report for January rebound from December’s loss of 78,000 jobs, and January’s number was 174,000 jobs created… That was a good rebound, no? Why yes it was, still not the size of job creation we saw before the virus hit last spring, but certainly better than the 78,000 jobs lost in December! 

Today’s Cupboard has the usual Thursday fare of Weekly Initial Jobless Claims, and in addition it will serve up the 4th QTR Productivity report, which to me is stupid… And we can’t forget that Factory Orders will also print today, this being their December report…  So a decline in this number is all lined up by the previous prints of Durable Goods, the ISM Index, Retail Sales and Personal Spending… I guess we’ll see what the accountants have in mind for this report today…

To recap… The currencies didn’t move again on Wednesday, but Gold dropped $3 and Silver dropped by 17-cents, and both are down in the early trading this morning.  Chuck wishes he had kept the phone numbers and email addresses of the traders he used to talk to…  Chuck talks about the Empire of Debt, and the declining U.S. Empire… And wonders what event the currency traders are waiting for before they begin to move the currencies in one direction or the other?

For What It’s Worth…  Well, I have an interesting article for you today… This is about the supply lines being disrupted and things not getting to places they need to go, like food! And this article can be found here: The Global Food Trade Has Been Upended by a Container Crisis – Bloomberg

Or, here’s your snippet: “Food is piling up in all the wrong places, thanks to carriers hauling empty shipping containers.

Global competition for the ribbed steel containers means that Thailand can’t ship its rice, Canada is stuck with peas and India can’t offload its mountain of sugar. Shipping empty boxes back to China has become so profitable that even some American soybean shippers are having to fight for containers to supply hungry Asian buyers.

“People aren’t getting their goods where they need them,” said Steve Kranig, director of logistics at IM-EX Global Inc., a freight forwarder that handles cargoes including rice, bananas and dumplings from Asia to the U.S. “One of my customers ships 8 to 10 containers of rice every week from Thailand to Los Angeles. But he can only ship 2 to 3 containers a week right now.”

The core issue is that China, which has recovered faster from Covid-19, has revved up its export economy and is paying huge premiums for containers, making it far more profitable to send them back empty than to refill them.

There are signs that the soaring freight rates are boosting the cost of some foods. White sugar prices surged to a three-year high last month, and delays in food-grade soybean shipments from the U.S. could mean higher tofu and soy milk costs for consumers in Asia, said Eric Wenberg, executive director of the Specialty Soya and Grains Alliance.”

Chuck Again…  Yes, one would think that to be in the shipping business you would want to send a container filled with goods, and have your trading partner send it back filed too… But I figured out a long time ago to not question the motives of the Chinese… Shoot, they have 100 year plans! We worry about what will happen in 3 months!

Market  Prices 2/4/2021: American Style: A$ .7606,  kiwi .7172, C$ .7798, euro 1.1998, sterling 1.3581, Swiss $1.1081, European Style: rand 15.0674, krone 8.6303, SEK 8.4550,  forint 296.95,  zloty 3.7508,   koruna 21.6262, RUB 75.97, yen 105.30, sing 1.3370, HKD 7.7526, INR 73.98, China 6.4584, peso 20.33, BRL 5.3608,  Dollar Index 91.44,  Oil $56.08,   10-year 1.13%, Silver $26.65, Platinum $1,085.00, Palladium $2,319.00, Copper $3.54, and Gold… $1,814.60

That’s it for today… It wasn’t a win-win night, as the St. Louis U. Billikens lost their basketball game, as they still showed rust from not playing for 3 weeks until this past weekend… Our Blues will be back on the ice tonight with their 2nd of 2 games VS the Ducks…  I hope they don’t make tonight’s game as frenzied at the end as they did Tuesday night’s game…   This Sunday is Super Bowl Sunday, with the K.C. Chiefs playing the Tampa Bay Bucs… The Chiefs are going for back-to-back Super Bowl wins, which is actually kind of rare… So, they have that going against them, and they’ll face the QB who’s won the most Super Bowls, Tom Brady…  I’m not a Brady fan, never have been, and so my alliance with the Chiefs is even stronger because of that… Cat Stevens takes us to the finish line today with his song: If You Want To Sing Out, Sing Out….  “if you want to sing out, sing out, and if you want to be free, be free, ‘cause there’s a million things to be… “   I hope you have a Tub Thumpin’ Thursday and a Fantastico Friday tomorrow, and please Be Good To Yourself!

Chuck Butler