Currencies & Metals Rally Overnight!

August 23, 2021

* The Jackson Hole Fed Boondoggle will be virtual… 

* We have to be prepared for a future with more black swan events.

Good day… And a Marvelous Monday to you! It’s been a month since I last greeted you with a Marvelous Monday greeting! I’m still experiencing some hang on problems from the pneumonia I had. The doc said that it’s normal, and not to worry about it… I had a chest x-ray last week, and my lungs were clear so that puts my mind at ease…  My beloved Cardinals thought that they had figured out their hitting problems… And lo and behold the last place Pirates come to town and beat them 2 out of 3… Thank goodness that we have Adam Wainwright pitching every 5 days! I cooked up some yummy pork tenderloins in the Big Green Egg yesterday, thinking that the kids would be coming by… I was wrong about that, and now I have more port tenderloin than you can shake a stick at! UGH! I guess it’s a good thing that it can be frozen…. Steely Dan greets me this morning with their song: Deacon Blues…

Another day on Friday, brought about more dollar buying, and the green/peachback is running roughshod over all the currencies, save one…. The Swiss franc seems to be holding its ground Steady Eddie… The euro fell through the 1.17 handle faster than a speeding locomotive… And once again, I sit here scratching by bald head and wondering what this is all about? Day after day, traders buy dollars and run the BBDX (dollar index) higher and higher… When I left you last Thursday the BBDXY was 1,155.00, and when the dust settled on Friday afternoon, and the books were closed until the Asian markets picked them on Sunday night, the BBDXY stood at 1,158.32…  So, it’s a batten down the hatches time once again, and only come out if you see a currency at a price that entices you to buy it…

Gold was down $7 on Thursday and up 30-cents on Friday to close the week at $1,781.70, and Silver just can’t seem to find a bid these day, as it was down on Thursday 22-cents, and down again on Friday 21-cents to close the week at $23.12…  There has to be a price here that gets you a warm and fuzzy about buying… I’m not sure what it is, that’s your bag, but don’t miss the buying opportunity, for when these two metals turn around, I think it will not be a back and forth trading pattern… I’m thinking that it will be a moon shot trading move…  I’m just saying

In the overnight markets…. in my favorite movie of all time, The Wizard of Oz, there was a scene where the Good Witch Glinda arrived in Munchkin land and told the Munchkins who were hiding from the Wicked Witch of The West,  to come out, come out, it’s Ok… Then turns to the Wicked Witch of the West and says, “You have no power here! Begone, before somebody drops a house on you, too!”  OK, what am I trying to get to here from that little trip down the yellow brick road? 

In the overnight markets the Good Witch, Glinda told the currencies and metals that it was ok to come out, it was all clear….   There was a complete reversal of the recent trading in the currencies and metals last night folks, and maybe it has to do with the calls for a “Black Monday” today, (more on that in a minute) but I’m telling you this…  The dollar was way overbought, and there had to be some correction…  So, the BBDXY this morning is back to 1,155, the euro is back above 1.17, and Silver is up 47-cents!   Gold is up $11.70 in the early trading and even the price of Oil is up $1.63 to 63.92…   

I was doing some thinking about the fear that traders have regarding the Cartel, tapering…  And then a news item flashed across my screen and it said that, “The Jackson Hole, Wyoming Conference would be held virtual this year”…   Now, let’s take a step back and talk about the Jackson Hole boondoggle that’s held each year at this time… It was here that St. Louis Fed President, James Bullard, announced that another round of QE was being implemented…  There have been many main speeches by the likes of Greenspan, Bernanke, etal… through the years, and this year, Jerome Powell, Cartel Chairman, will have the honors…    OK, now back to the fear of tapering…  Recall last Thursday I made the case from my point of view that the Fed would not begin to taper this year, due to the problems that the COVID virus is causing here in the U.S.  

Many observers thought that if there was a Jackson Hole meeting and people attended in person, that Powell would use this opportunity to lay out the framework for tapering…  And then begin implementation in November…  But now that the meeting is virtual, you kind of lose the emphasis and the weight of a discussion.. .And with that I’m of the opinion that Powell, will refrain from laying out the framework of Tapering, and instead choose to do that after the September FOMC meeting, which would delay the implementation of tapering.   And even IF the Cartel further delays the implementation of Tapering, it’s still important that they lay the framework for it out for everyone to see, so that there are no surprises…  

You’ve heard the old saying that “the 3rd time is a charm”, right? The reason I bring this up is once again there are calls out there that another “Black Monday” is in the cards… This marks the 3rd time in this calendar year that a call like that has been made….  Sure, I agree that stocks are selling at astronomical values and should be brought back to earth… But I have a problem with the people that believe they are correct and the bringing back to earth will being on “X day”….  Either way, it only reminds an investor to make certain that they have their stop losses in place…  

Now, so how was that for a public service announcement?  HA!

Crazy times we live in folks… I had a visit from my oldest friend in the world on Friday. We hadn’t seen each other in over two years! We grew up together, went to high school together (he didn’t go much!) And then he was my best man when Kathy and I married in 1976… We didn’t spend / waste time talking about the goings on in the U.S. But, he did say, “I really don’t know what’s going to happen but I feel like there’s something big about to happen”…  To which, I said, “I agree, and so do most people that have at least half a brain”…

I wanted to mention something before we head to data and the Big Finish, and that is there was a report on that a company named Palantir recently bought $50 Million in Gold Bars… Their leader had this to say: “Shyam Sankar, the COO of Palantir, “you have to be prepared for a future with more black swan events.”

Ahhh…. Those Black Swan events…  That’s what me and my good friend were talking about on Friday!

The U.S. Data Cupboard didn’t have much for us on Friday, in fact the only thing showing up the docket was a Fed Head Robert Kaplan speech… This week starts out slow with some housing data, but as the week goes on we’ll see the latest color of Durable Goods an Capital Goods… They have a new name for Capital Goods…. It’s… Drum roll please: Nondefense capital goods orders, excluding aircraft, or for those that like shortened names it’s NCGOEA… Now that’s a mouthful! 

On Friday this week we’ll see Personal Income and Spending for July… Old and stale data, but you can image if you will that it takes a lot of time to massage, and cook the books so they say what the Gov’t wants them to say, right?

For What It’s Worth…. I ran some numbers on the Afghanistan War, and I decided not to publish them because they are just awful and I don’t want to in any way, shape or form, throw cold water on the great American soldiers who fought the war…   So, I’ll leave that up to Bill Bonner, who always can set the story straight… I’ll tell you this though, my numbers are way worse than they ones he quotes, so he has that going for him….  Anyway, here’s Bill Bonner on Afghanistan, and it can be found here: The Afghan Adventure and Other Lies From America’s Elite | Rogue Economics

Or, here’s your snippet: “The Afghan Adventure and Other Lies From America’s Elite — Bill Bonner

“The Afghan army wasn’t real. The Afghan Civil Authority was never real. They never collected taxes. There were no courts outside of police robbing people. None of it ever existed… it was just a big jobs program funded by American money, and the moment it looked like the money would go away, everyone went home.” – Former U.S. soldier Graham Platner, interviewed by The Jerusalem Post

What a jolly, schadenfreudian week.

The American elite have had their noses rubbed in their most precious delusions and pretensions.

They spent $2.2 trillion, equal to $55,000 for every person in the nation, building a modern, democratic Afghanistan (and coincidentally, enriching themselves).

And now, instead of receiving polite “thank you” notes, they are chased from the country in appalling scenes of disorganization and incompetence.

And this was not just the “military-industrial complex” that president Dwight D. Eisenhower warned against.

If this was a “ship of fools,” the universities, think-tanks, media, liberals, conservatives… Republicans as well as Democrats… do-gooders and world improvers – all were in the first-class cabins.

They imagined that they were bringing the indisputable virtues of the American way of life – with its unlimited fake-dollar spending, Prozac, and transgender bathrooms – to the ancient lands south of the Hindu Kush.

And it was all a fraud, marked by lies and deceit over 20 years.

Meanwhile, the rest of the nation begins to wonder. If the elite could be so wrong for so long about that…

What else are they wrong about? And when will the next appalling collapse occur?

Chuck again… You tell ‘em Bill! 

Market Prices 8/23/2021: American Style: A$ .7182,  kiwi .6870,  C$ .7860, euro 1.1722, sterling 1.3680, Swiss $1.0908, European Style: rand 15.1887, krone 8.9484, SEK 8.7469,  forint 298.60,  zloty 3.9091,  koruna 21.7788, RUB 74.23, yen 110.09, sing 1.3584, HKD 7.7918, INR 74.08, China 6.4955, peso 20.31, BRL 5.3792,  BBDXY 1,155.30, Dollar Index 93.27,  Oil $63.92, 10-year 1.27%, Silver  $23.59, Platinum $1,027.00, Palladium $2,410.00, Copper $4.10, and Gold… $1,793.40

That’s it for today… Well, I hope I’m feeing strong enough for an event tonight that I’m very excited about attending… Son Andrew and I will be in the audience when Cardinals greats: Tim McCarver and Ted Simmons will be the main speakers…  Ted Simmons is my all-time fave Cardinals player, and I worked and showed him the ropes of Bond Clearing back in 1982! You can only imagine how tickled I was to be working side by side with my all-time fave Cardinal! Now if I can only get close enough to say hi to him and see if he remembers me…  On last Friday, I already told you that my friend Mike Karvas stopped by and we sat out front in the driveway talking. The another good friend Gary/ Gus Schuette stopped by, and then he was followed up by a visit from Ty Keough and Jack Stapleton!  I think everyone wanted to see if I were back to being Chuck, or some beaten down old man… They didn’t say that, but I know… It’s supposed to get real toasty here this week temperature wise, so my daily reading outside will have to be early in the day, before it gets too hot… And with that… I’m being treated this morning with King Crimson’s song: In The Court of the Crimson King… A classic rock song if there ever was one! It’s about 17 minutes long, so it will still be playing after I hit send today! I hope you  have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler