Currencies & Metals Adrift At Sea…

January 26, 2021

*  Stephen Roach is committed to his call of a weak dollar!

* Chuck navigates through the landmines… 

Good Day… And a Tom Terrific Tuesday to you!  Well, it was pointed out to me yesterday, that I mistyped the A$ price yesterday… Fat fingers are to blame! Seriously, sorry about that, I usually go over them after typing them but I must’ve just breezed right by the A$ mis-price yesterday… For A$ holders, I didn’t mean to cause heart palpitations! This is day 5 of my two weeks alone here… I’m surviving! HA! My former colleagues, Jen, and Christine, used to say that men couldn’t survive alone without their wives… So, every time Kathy goes away, and leaves me alone, I think of them… And Laugh!  I had to go to the pharmacy yesterday, and it was the first time I had put on a mask since traveling here almost 4 weeks ago…  I’m with Tom Woods regarding my thoughts toward face masks, but I comply because… I have to!  The Allman Brothers greet me this morning with their song: Statesboro Blues… “Woke up this morning, had those Statesboro blues…”

And that, I certainly did! Wake up with the blues this morning… But that shouldn’t hang around too long, as I can almost taste the ham, eggs, and cheese I’m fixing to make once I send this out this morning!  When my darling daughter, Dawn and her family come down for Spring Training this year, my granddaughter, Delaney Grace will be singing the national anthem at the stadium before a game! We don’t know which game, just when they’re in town for a week…  Now, THAT will make going to the game even more fun!

Well, it was a day of drifting for the currencies yesterday, they just couldn’t get any traction on rally attempts throughout the day, and ended the day weaker VS the dollar…  Both the currencies and metals seem to be adrift at Sea…  Waiting for someone to tow them to safety… The China-virus outbreak story, continues to be a drag on Commodity prices, and anything associated with Commodities… And now the new strain of the virus here in the U.S. is becoming a problem… I read one guy’s opinion on the virus, and he thinks that we’ll have to live with Covid from here on out…  I sure hope he’s wrong, but, with different strains coming to the forefront every year… Who knows?

So… here’s something that really sticks in my craw…  I read yesterday, that Congress and the President are contemplating sending out stimmy checks on a regular basis…  That would be done, folks, under the guise of “stimulating the economy, when we all know that it’s really Universal Basic Income… The centerpiece of the Magic Money Tree  (MMT) proponents…  Shoot while we’re at it, why don’t we just go out right now, and devalue the dollar now, and get it over with!

Longtime economist that I used to follow very closely, Stephen Roach, recently said, and I quoted him here, that the dollar was going to crash… And he followed that up this past weekend saying: “The dollar’s crash is only just beginning”…    So, come one Treasury and Cartel, I mean the Fed, go ahead and beat the markets to the punch! Devalue now!   

Look folks, I don’t want to see this happening to our currency, the one I use for gas, groceries and giggles, but if we’re going to be moronic and send out regularly scheduled stimmy checks, And not call it what it really is, then  a crash, or devalue is in the dollar’s future… I’m just saying…

Gold couldn’t hold its early morning gains yesterday, and only moved higher by 70-cents, while Silver gave back 13-cents… not a good way to start the week, so let’s use today as the start of the week, ok, gold traders?   Gold & Silver are considered and traded by U.S. investors like a commodity… It’s not, in reality, it’s a store of wealth, that should be bought, stored, and forgotten about…  And then passed down to your kids/ grandkids, with instructions that they not sell it either!  

In the overnight markets…. There was more drifting by the currencies, with the Commodity related currencies really taking on the brunt of the dollar bugs pressure.  Gold is down a buck or two in the early trading, and Silver is up a dime… 

There’s been some interesting movement in the 10-year Treasury’s yield… I say interesting because after a month of rising, the yield is now back on the way down…  Of course this could be a result of a ton of Cartel, I mean the Fed buying…  In case you’ve missed class the several hundred times I’ve talked about this… bonds trade like this, as bonds are bought, the price goes up and the yield goes down… As bonds are sold the price goes down and the yield goes up… So, if there was more buying recently, that would explain the yield dropping to the current 1.04% from 1.15% it traded at as we turned the calendar of the year… 

You know, these days, are getting very tricky for me, in how I describe currency printing, deficit spending, and MMT… This is getting to be very difficult for me to navigate and when it gets too difficult I’ll hang it up… I had a longtime readers send me a note last week, and said that he was very upset with something I said, and that he wanted to unsubscribe…  Wait! What?  What on earth did I say, or better yet, how did I say it, that got him riled up?  I’m at a loss, here folks… My dad taught me, that you can please some of the people some of the time, but not all of the people all of the time… When I started out writing this letter in 1992… My goal was to prove him wrong…  I’ve never achieved that goal, and it looks like I never will!

The U.S. Data Cupboard is still lacking any real economic data today, that will have to wait until tomorrow… But first today, we will see the latest Case/ Shiller Home Price Index, and the stupid Consumer Confidence…  Tomorrow we’ll release the Kraken! Well, we’ll see real economic data in Durable and Capital Goods Orders…

To recap… It was a day of drifting with no real direction carved out for the currencies yesterday. The Commodity Currencies still are facing some selling because of the China virus outbreak story… Gold couldn’t hold its early gains yesterday, and only gained 70=cents on the day…  The overnight markets have been pretty much the same as we saw all day yesterday… Yes, sir may I have another?  UGH! 

Before I head to the Big Finish today, I wanted to talk about this…  In the article I mentioned above from Stephen Roach, I pulled this comment that explains why he sees the dollar crashing let’s listen in: “Based on a wildly unpopular forecast that I made in June of a 35% decline in the value of the dollar by the end of 2021, we are only in the third inning of a nine-inning baseball game. If that forecast comes to pass, it will provide an important exclamation point on the first year in office for America’s 46th president, Joe Biden. There were three main reasons why I argued the dollar would fall: 1) a sharp widening in the  U.S. current-account deficit, 2) the rise of the euro, and 3) a Federal Reserve that would do little in response to any weakness in the greenback. On each of these counts, I have greater conviction on the weak-dollar call today than I did six months ago.” – Stephen Roach

Chuck, thinking out loud…  Opinions are like rear ends, everyone has one, and the best thing, today, that is, maybe not tomorrow, you the reader gets to decide whether you will agree with the opinion or not…  To me, Stephen Roach is singing from the same song sheet as me… So… I agree with his opinion…  I’m just saying… 

For What It’s Worth… OK, I had earmarked a story in the St. Louis Post Dispatch from last week that said that “Thousands of eviction filings are piling up in St. Louis and St. Louis County, leaving landlords and tenants frustrated, and advocates predicting a tidal wave of homelessness to come.”  5,000 eviction notices have been filed since March 2020…  Well, that was a good start to the FWIW article today, that I pulled from Ed Steer’s letter this morning regarding a national view on this problem, and it can be found here: Nearly 20% of renters in America are behind on their payments (

Or, here’s your snippet: “About 18% renters in America, or around 10 million people, were behind in their rent payments as of the beginning of the month.

It is far more than the approximately 7 million homeowners who lost their properties to foreclosure during the subprime mortgage crisis and the ensuing Great Recession. And that happened over a five-year period.

In one of his first executive orders, President Joe Biden extended the Centers for Disease Control and Prevention’s current eviction moratorium through the end of March, but that is unlikely to be long enough.

A new analysis from Mark Zandi, chief economist at Moody’s Analytics, and Jim Parrott, a fellow at the Urban Institute, shows the typical delinquent renter now owes $5,600, being nearly four months behind on their monthly payment. This also includes utilities and late fees. In total, an astounding $57.3 billion is owed. This includes all delinquent renters, not just those suffering financially due to the Covid pandemic.”

Chuck Again…  Didn’t I tell you that the problems caused by rents not being paid go way deeper than meets the eye…  Remember, all mortgages are bundled together and sold as a bond… those bond holders expect to receive principal and interest payments each month…  And landlords depend heavily on the rents they receive to pay for upkeep, taxes, etc… I’ll betcha a dollar to a Krispy Kreme that if a landlord fell behind on his taxes owed to the city, country or State, that these official offices wouldn’t think twice about taking away his property…  I’m just saying…  That’s an old line that goes something like this…  We you pay off your mortgage loan and own your house outright, you had better keep up with the taxes or else you’ll find out who really owns your house… 

Market Prices 1/26/21: American Style: A$ .7695,  kiwi .7200, C$ .7848, euro 1.2130, sterling 1.3651, Swiss $1.1248, European Style: rand 15.3003, krone 8.5635, SEK 8.3160,  forint 295.81,  zloty 3.7503,   koruna 21.5237, RUB 75.31, yen 103.79, sing 1.3273, HKD 7.7515, INR 73.03, China 6.4766, peso 20.15, BRL 5.4654,  Dollar Index 90.46,  Oil $52.99,  10-year 1.04%, Silver $25.52, Platinum $1,092.00, Palladium $2,406.00, Copper $3.55, and Gold… $1,855.70

That’s it for today… Well, today is the birthday of my younger sister, Joan…  So, Happy Birthday Joanie, I hope your day is grand! Joan moved to Houston, Texas quite a few years ago now, and so I seldom see her any longer…  And I finally heard from the folks at Roger Dean Stadium… And they are going to sell tickets to the games, with season ticket holders having first shot…  I’m not happy about it, but at least I’ll be in the stadium!  Bring on day baseball! YAHOO!  I started reading my new book, and man is it weird… I don’t remember it being this weird when I read it in High School!  Oh, well, it’s supposed to make me think, and it it’s doing the job! Maybe that’s why I don’t recall it from H.S. I probably just read the jacket notes, and passed the test!  Steely Dan takes us to the finish line today with their song: Aja…  “Aja, when all my dime dancing is through, I run to you”…  A great song in my opinion! I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler