Currencies & Metals Move Higher VS The Dollar

July 20, 2020 

* U.S. economy keeps showing signs of trouble ahead… 

* Is a “Perfect Storm” brewing? 

Good day… And a Marvelous Monday to you! As the song goes… “Oh, it’s a hot one, like seven inches from the midday sun.”…  That was what it was like here this weekend… Shoot Rudy, I even got into the pool! Now that was a sight to see, because, I’ve had my legs compression wrapped for over a year, and while my knees are dark from the sun and sitting outside to read, my lower legs are as white as the fallen snow… So, after my family finally stopped laughing, I did the Nestea Plunge like I always used to do …..  And I didn’t care! Because, with my legs finally healed, I can get in the pool that I paid for and still pay for the maintenance of!  I still have to wear compression wraps, but now they are removable, and do not have to be cut off each week. I cooked outside on my Big Green Egg, both Saturday and Sunday, and standing in front of that hot fire, made the water in the pool feel that much better!  America greets me this morning with their song: Sister Golden Hair…

Well late last week was the tale of two different days… On Thursday, the dollar bugs ruled, and that meant the Dollar Index rallied from its price on Thursday morning, only to see it all wiped out from Friday’s close… The same with Gold & Silver, which didn’t fare wll on Thursday, but rallied back any lost ground in the Friday session… Gold ended the week, after rallying on Friday by $14 and closed at $1,810. Silver had the same thing happen to it, as it got sold on Thursday, and then bought on Friday by 24-cents, and closed the week at $19.32

OK… I’ve got to tell you up front, that I pulled this from Twitter last week, and that it comes to us curtesy of “The Land of Make Believe”….  Here’s Fed Head Evans in a speech last week, “FED’S EVANS: I DO NOT SEE FED FACILITIES AS DISTORTING MARKETS, THE FED”S PURCHASES AREN’T LARGE ENOUGH TO DO SO.” 

Ok, I’m still laughing out loud over this moronic statement from Fed head Evans!   Talk about living in La-La land!  What planet is he from anyway, because here on this planet, you could do a poll of investors who would tell him that they are investing in stocks because, the Fed’s Got their Back!

Remember a week ago when I told you that the Gov’t’s tax receipts were down?  I forgot to mention that the States and Cities will also see a HUGE drop in their tax receipts…  And when that happens, the tax increases will begin to filter through… I had a dear reader send me this last week…. “Just wanted to share with you that Davidson County (Nashville TN) has passed a 34% INCREASE in real estate taxes due to……well it’s hard to say EXACTLY what it is due to but for the sake of brevityI’ll say the virus…

There is now a recall movement to replace the mayor and city counsel. Folks here are plenty mad.”

I hope they do throw these people out! 34% increase?  That’s insane!  But not insane if you can get away with it, and apparently, they are NOT getting away with it! But can you see the county advisors all sitting in a room and deciding to throw the dookie at the wall to see if it stuck?  It’s the same thing as sending out a 34% tax increase!   But I’m pretty sure you, me and the guy down the street that cuts his lawn with his shirt off, will all be seeing huge tax increases from your state, or local taxing authority, so be prepared…

Well, in a bit of upbeat news (NOT!) James Rickards tells us that the date for a new financial system will be January 26th… OK, I knew it was coming, but that seems pretty close in calendar days, doesn’t it?  If you want the skinny on what he’s talking about and why he’s picked January 26th, 2021, I suggest you go t Google, put I his name, and you’ll find it…

Well, the news about the economy could be getting worse as we go along folks…  In Bill Bonner’s letter on Saturday, he said that the money printing and quick rise of the Debt was creating a “perfect storm”…  And that had my mind quickly imagining that litter trawler in the movie “Perfect Storm”, heading up that humongous wave, and thinking that’s our economy right there… 

For Instance, last Thursday saw the Weekly Initial Jobless Claims come in at 1.3 Million.  The total was 10,000 less than the previous week, I have to tell you that this appears to me as the relatively small decline points to persistent stress in the economy… And with businesses looking to cut back again, this is only going to get worse…  

But here’s something that I know you’ve not heard of before. I found this and it goes like this: “Some 928,488 new claims for benefits were also filed through a temporary federal-relief program, raising the total for the week to an unadjusted 2.43 million.”

Now, why wasn’t that total talked about in the media? Well, because it doesn’t sell good copy.   So, what the gov’t does tell us has the continuing claims at more than 30 Million…  As I explained last week,  none of this goes into the BLS’s Jobs Jamboree, does it make any difference?  Well, it does for people/ investor that don’t believe the BLS’s bag of lies each month! For we know what’s really going on, and make sure our Gold & Silver allocations are up to snuff… 

We also saw June Retail Sales and like I said last Thursday, I expected the number to be strong… And it was,  at 7.5%, but down significantly from the previous month’s 18.%…  And I believe that’s very significant in that we’re just not the economy we were pre pandemic…  I’m just saying… 

The U.S. Data Cupboard isn’t open for business today, as they’ll have to sanitize all the upcoming numbers! HA!  Seriously, there are no data reports on the docket today, and quite frankly, the rest of the week, is dullsville man…  Like playing solitaire with a deck of 51, or watching flowers on the wall…  

Judging from the earnings reports last week for banks, it seems the banks aren’t trying to tell everyone that the economy is all seashells and balloons… they all have made significant deposits to their loan loss reserve. Does that tell you something, that the Gov’t and Fed isn’t telling us about the economy? I fear they smell the coffee and needed to bulk up their loan loss reserves because the next phase is delinquency and then default… I was reading my fave writer’s newsletter: Grant Williams, Things That Make You Go  Hmmm… And he has this to say about this situation… “Thus far, with the various levels of financial assistance being offered by the federal government and the numerous ‘payment holidays’ which have been put in place, things have held together, but, if history is any guide (and, let’s face it, history is always a guide), we are about to enter the next phase of the cycle: delinquency, and that is something for which few seem prepared: – Grant Williams

Ok, this where, in the letter, we reach the dog days of summer, but get a refill of coffee and come back because this next part is very important, and plays well with what I’ve been telling you….

So… I’ve been doing a ton of reading about things… Things such as there’s a bill racing through Congress right now, that has the new stimulus payment tied to a digital dollar… That’s right to get your money, it will be in digital dollars…  Or this, that the Banking system is looking at a Crete style bail ins… So, if you have over the $250,000 covered by the FDIC, the banks who see large loan losses coming down the pike, will simply confiscate your money that equals the amount over the $250,000 figure.

Now those are two really “pick-me-up” ideas aren’t they now? NOT! And it goes to show you that no one really knows what’s going on….  But if I were a betting man, I would bet on what’s behind door #1, and that is the digital dollar, because….  Just a month or so ago, I told you that the Gov’t would cut rates into negative territory, and don’t tell me they won’t do that, because the economy is showing signs of waking up…  The second wave is going to be worse than the first wave of the virus, and like in Texas and California, they have closed back down, so will most of the American economy once again… So there!  

After going negative with rates, the Gov’t will see depositors making runs on banks to get their cash before the begin to start getting charged for it, and soon the Gov’t would introduce a new Gov’t backed digital currency (Not Bitcoin!) but their own invention, and you’ll wake up one morning to look at your bank account and find that the money in your account is all gone! Instead you see something looking like digital currency…  And that will be the end of what’s left of your civil liberties, my friends….  And wait till you find out how the conversion of your dollars was done, and at what price, etc. 

Wouldn’t that be a kick in the teeth, if we saw both of those ideas come into play?  YIKES! Get me out of here, and like the imitation of the late Great James Brown by Eddie Murphy, when he says, “I don’t want to get in the hot tub, it’s too hot, in the hot tub”…   I don’t want to deal with these things, it’s too damaging to my kids and grandkids futures….

So, let’s move on to something a bit cheerier…. 

Having nothing… I guess we’ll head to the Big Finish!

To Recap…  The currencies and metals lost ground on Thursday last week, but recovered nicely on Friday, and have gained more ground in the overnight markets… Chuck is full of info today, so be sure you got it all, you might need to reread the letter to get it all!  The Continuing claims in the U.S. for Unemployment Benefits is over 30 Million… It will be interesting to see how the BLS treats that in their next Jobs Jamboree.

For What It’s Worth…. Good friend, and fellow writer, Dennis Miller sent me the link to this story last week, and it was so good, that I saved it for today! This is analyst Alasdair Macleod, talking about how all this debt and money printing is going to come to a head by year-end… And it can be found here:

Or, here’s your snippet: “ Finance and economic expert Alasdair Macleod says the gold market is “extremely dangerous as far as the bullion banks, swaps and trading desks” that, at some point soon, are going to have to deliver physical gold they do not have.

I find it difficult to see how they can close it… The possibility of a default and the possibility of a ‘force majeure’ is increasing all the time in this current situation. This is a difficult thing to predict, but unless someone can show me there is a way out of this . . . I can’t see how these banks can be rescued.”

So, the only way the banks can be saved is if they can deliver tons of physical gold they likely don’t have? Macleod says, “Which they don’t have, not likely have, they don’t have.”

Macleod thinks failure to deliver gold is coming soon where the contract will be settled in cash and not physical metal. How many times can the gold market do this? Macleod says,“I think it will be the end of the futures market because nobody would trust it as a means of delivering gold. I mean it would have demonstrably failed. So, why would you play with it again? Of course, the failure of COMEX contracts is a very, very serious issue.”

Macleod says stocks, the dollar and bonds all go down together and explains, “That is the lesson of history. Everything just goes away. If you destroy the currency, you destroy all the financial assets that are priced in it. That just happens. It just goes.”

I think the dollar will be destroyed by year end, and the price of gold and silver is infinity. . . . I think the banking crisis could start in a month. Look what’s happening to their balance sheets. . . . I think the collapse is likely to be so rapid that in the absence of any other information, the best thing to do is to hold on to gold and silver as an insurance policy just in case I am right.”

Chuck Again…. The article is long, and I had to cut some things out, so it’s probably better to click on the link above, or copy and paste it into your browser, and read the whole article there…. It’ll be worth your time…

Market Prices  7/20/20: American style: A$ .7000, kiwi 65.67, C$ .7375, euro 1.1460, sterling 1.2621, Swiss $1.0660, European Style: rand 16.6750, krone 9.2555, SEK 8.9950, forint 307.59,  zloty 3.8942,   koruna 23.2146, RUB 71.82, yen 107.11, sing 1.3896, HKD 7.7514, INR 74.57, China 6.9912, peso 22.48, BRL 5.3847,  Dollar Index 95.78,  Oil $40.58,  10-year .62%, Silver $19.43, Platinum $841.00, Palladium $2,094.00, and Gold… $1,817.00

That’s if for today… Well, last Friday, I hosted another driveway happy hour, and this time 3 of my former colleagues attended… It was super great to see Danielle, Aaron, and Michelle, along with hubby Kevin….  The rain stayed away, although it was all around us, but God’s country was saved from the storms for Friday night!  Grandson Braden, and his little sister, Evie, stayed the night with us Saturday night… I continue to be entertained by that little girl of 9 months now… She makes me laugh with joy, and make me thankful  I’ve been able to keep the cancer wolf at the door, and get to see her now… my other granddaughter, Delaney Grace, will turn 13 this summer… Can you believe that? I’ve been doting on her for as long as I’ve had cancer…  3 more years and she’ll be ready to drive, although she might need a booster seat to see over the dashboard, she’s so short! But I love her to pieces no matter how vertically challenged she might be!   OK…  Firefall takes to the finish line today with their song: So Long… I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler