Eurozone Inflation Hits A Multi Year High!

August 31, 2021

* Currencies & metals give back some of their Friday gains on Monday

* The overnight markets see more dollar selling… 

Good Day… And a Tom Terrific Tuesday to you! What a great weekend I just had with good friends on a lake in SW Missouri. The weather was beautiful, the meals were outstanding, and the company was fabulous! A GREAT BIG TANKS to hosts: Kevin and Lisa… I’m still working on trying to regain my strength, and I still feel like my balance is off, but those are signs that I had Covid… I wanted to point out that good friend, Dennis Miller, interviewed me regarding the Fed, for his weekly letter, that posted to his website: . So, if you want to see what I had to say, check it out, and while you’re there, subscribe to his newsletter! Carlos Santana greets me this morning with his classic rock song: Evil Ways… 

Well, our 20 year war is over… The last of the American forces left on Saturday… I sure hope no one was left behind in that God forsaken land… My God Bless all the soldiers, alive or otherwise, while we tried to change the Middle East… We, as a country, spent more than $5.4 Trillion and lost more than 4,800 U.S. soldiers, and thousands of maimed soldiers returned home.. For what? Those people have been fighting each other for centuries, even our soldiers had to wonder at times what the hell they were doing there…  Even though the evacuation was a chaos… I’m glad we as a country are out of there!

Ok, sorry about that rant… you came here for markets and news on dolts… And I begin with in op-ed… sorry….  Well, the BIG NEWS last week was that I was wrong about Cartel Chairman Jerome Powell’s speech to the virtual attendees of the Jackson Hole Boondoggle. Recall I said that I didn’t think Powell would announce the framework for Tapering at this virtual conference. But, he proved me wrong, and did announce the framework for Tapering… I got to thinking about this last night, and to me Tapering is like a rate hike, even though Powell made certain that the markets didn’t take the Tapering talk as a rate hike… So, just like the inflation we’re experiencing, The Cartel says it doesn’t exist… And as far as Tapering equaling a rate hike, The Cartel says no it isn’t…  What a bunch of crock!

So, what did the currencies and metals do with this info? They rallied! Gold was up $24 on Friday, while Silver added 43-cents. The euro traded above 1.18 once again, and most of the currencies followed the Big Dog, euro, as it left the porch and chased the dollar down the street… But that was Friday… And with the long weekend to think about what the Cartel had said, the currencies and metals gave back some of their Friday gains on Monday… Gold lost $6.60 to close on Monday at $1,811.20, and Silver gained 2-cents to close at $24.1l… The euro lost a little ground, yesterday, but remained about 1.18..

In the overnight markets… Traders were back to selling dollars, as witnessed by the BBDXY, which closed yesterday at 1,147.54, and is trading at 1,144.67 this morning… The Eurozone received some news this morning that should make for an interesting European Central Bank (ECB) meeting on Thursday… Eurozone inflation hit a multi year high in July, and I don’t think I need to remind you that Germany, the largest member of the Eurozone, has a BIG allergy to inflation, as there are still people in Germany that remember the hyper-inflation era that roared its ugly roar during the Nazi era… And Germany is NOT going to sit by idly and wait for inflation to rise, like our Central Bank… 

Gold is working on gaining back its loss yesterday, in the early trading the shiny metal is up $3.60,  and Silver is up 6-cents…  I want to point out something that happened yesterday…  Silver ended the day 2-cents but that was more than 28-cents lower than its intra-day high… And Gold was down $6.60, but was up during the day… Clear example of price manipulation… But it is what it is… We take the good with the bad, and roll with the punches, us “Gold people”… 

Last week, St. Louis Cartel President, James Bullard, was on TV spouting off that the economy is very strong on something like that.. So I went to Twitter to see what David Rosenberg had to say about that, and here’s his Twitter post: “Jim Bull(ard) just said on CNBC that we have a “booming economy” on our hands. And here we are, set for a fourth straight month of negative real retail sales figures. In the past, such a losing streak only occurred in recessions.

I can always depend on David Rosenberg to set the record straight! Thank you Mr. Econoguy! OK… I had a dear longtime reader send me a note on Friday, asking me to address his list of questions  that included: Gold vs. Silver? Proportions?

Actual metal vs. paper ETFs/ “MarketSafe Bullion CDs/etc. Proportions, too?

Liquidity…both selling/buying?

Allocated vs. unallocated vs. at home in the safe?

Storage location…within the US or somewhere outside and untouchable?

The safest, most reliable, and easiest folks to deal with?

OK…  Gold Vs Silver?  I really own more Silver than Gold… But I don’t have a preference if it came down to I could only own 1…   Proportions?   I’ve long said, even when I was at EverBank, and I used to give presentations all over North & Central America, was that an investor should own 10-15% in metals, and when metals are rallying move the allocation up to 20%…

Actual metal VS paper ETF’s… Again I’ve always contended that I prefer to own physical metals, and not ETF’s… The main reason is simply that when push comes to shove, try getting your Gold or Silver out of an ETF…

Liquidity… both selling and Buying…  I’m thinking that when push comes to shove that you’ll have to either pay through the nose for Gold or Silver, or do without… Selling is different, and here I believe that there will always be a buyer…

Allocated VS Unallocated VS at home in the safe? ….  I’ve used the unallocated or pooled method of buying Gold & Silver through the years, it’s safe, and it’s cheaper than buying the allocated metals… Eventually though I had my pooled accounts converted to Allocated, paid the minting charge, and delivery charge, and had the metals sent somewhere for safekeeping.  If you own metals and you hold them in a safe in your home, please DO NOT TELL ANYONE that you have them in your house… Other than that, it’s fine to hold your metals in safe in your home… And you’ll find that when push comes to shove you won’t be able to get to the bank’s safe deposit box to retrieve your metals..

The Safest, most reliable, and easiest folks to deal with…  This one’s easy… Call my metals guru, Tim Smith at 1-800-926-4922… That’s the number for TIAA World Markets… And tell Tim I sent you there… I don’t receive a wooden nickel for sending you there, I just like it when we’re together and he says, “I had 10 more people say that you sent them”…

And since we’re on the subject of Gold, I came across this on… “Veteran investor Mark Mobius said investors should have 10% of a portfolio in gold as currencies will be devalued following the unprecedented stimulus rolled out to fight the coronavirus pandemic.

At this stage, “10% should be put into physical gold,” said Mobius, who set up Mobius Capital Partners after more than three decades at Franklin Templeton Investments. “Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed.”

Chuck again… Ok, I’ve got to wonder if he was reading some old Pfennigs and came across the one I wrote last May, when I said that all the debt every country sans Russia and Singapore, were printing, that a default of one country would lead to another, and that would devastate their respective currencies… So, do great minds think alike? Or was he reading some old Pfennigs?

The U.S. Data Cupboard late last week, had Personal Income and Spending on Friday… And while the Income portion of the data was strong, thus leading to the Gold rally, the Spending portion of the data was very weak, and that’s not a good thing for the economy that according to James Bullard is Booming… Yeah, and my first wife was a young Elizabeth Taylor!

This week’s Data Cupboard will finish out the week with the Jobs Jamboree for August.. Did you know that the Labor Participation Rate here in the U.S. has been going downward for the last 20 years? Longtime friend Bill Bonner is always telling his readers that the Great U.S. Empire began its fall from grace at the turn of the century… And I agree with him 100%… Think about all the bad stuff that has happened since the year 2000…

Before we get to Friday though…  We’ll see the Case/ Shiller Home Price Index for July today… I don’t believe that price of homes had begun to show some wear and tear in July, so I would think that this data print will show the housing bubble is getting bigger…

For What It’s Worth…  Ok, Ed Steer of highlighted this story in his Saturday letter, so it’s still fresh… But it does smell like yesterday’s fish! It’s about the Fed’s go to inflation gauge showing how inflation hasn’t been this high since the early 1990’s and it can be found here: Key inflation gauge rises 3.6% from a year ago to tie biggest jump since the early 1990s (

Or, here’s your Snippet: “An inflation measure the Federal Reserve uses to set policy rose 3.6% in July from a year ago, meeting Wall Street expectations but also tying the highest level in about 30 years.

The core personal consumption expenditures price index, which the Fed sees as the broadest measure of inflation, was unchanged from June, which was revised up one-tenth of a percentage point, the Commerce Department reported Friday. That 3.6% reading equaled the Dow Jones estimate and appeared to be the highest level since May 1991.

Including volatile food and energy prices, the index rose 4.2% year over year, up from 4% in June and the highest reading since January 1991.

The Fed has viewed inflation pressures this year as largely the result of temporary pressures, though officials in recent days have conceded that the situation may last longer than originally thought.

Atlanta Fed President Raphael Bostic told CNBC on Friday that business contacts in his region have told him they see inflation persisting beyond the near-term time frame.”

Chuck again… No matter what the Cartel says about inflation whether it’s here to stay or transitory, they’ll be wrong… You can bet your bottom dollar on that one folks!  And even if inflation proves to be short term, (I don’t believe that) the price increases we’ve seen will remain in place…

Market prices 8/31/2021: American Style: A$ .7328,  kiwi .7063,  C$ .7947, euro 1.1840, sterling 1.3777, Swiss $1.0945, European Style: rand 14.5517, krone 8.6424, SEK 8.5863,  forint 294.85,  zloty 3.8346,  koruna 21.5719, RUB 73.48, yen 109.93, sing 1.3434, HKD 7.7812, INR 72.87, China 6.4650, peso 20.08, BRL 5.1962, BBDXY 1,144.67, Dollar Index 92.48,  Oil $68. 44, 10-year 1.28%, Silver $24.17, Platinum $1,011.00, Palladium $2,582.00, Copper $4.25, and Gold… $1,814.80

That’s it for today… A little market news, a little housekeeping, and  little pointing out of the dolts for you today… Well, this is the end of August… I’ll talk to you next in September! This coming weekend will be Labor Day Weekend… A 3-day holiday weekend… I don’t know if I’ve ever told you this or not, but here goes… I absolutely love fried Chicken… And Saturday night I had the best fried Chicken that I’ve had in a very long time! Who would have thunk that a side of the road diner would have great Fried Chicken?  Oh well, you learn something new every day! Before I went on my mini-vacation last week I stepped on the scale and saw that I had lost 92 lbs so far in 10 months… I was stuck on 75 lbs for the last two months, and then suddenly the lbs dropped off me… It’s certainly not because I’ve been exercising! Now if I could find a way to lose 70 more lbs… that would be awesome! Van Morrison takes us to the finish line today with his classic rock song: Moondance… Well, it’s a marvelous night for a moondance with the stars all up in your eyes… I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler