Getting The Band Back Together!

September 11, 2018  

* Currencies drift again… 

* Gold gets off on a bad foot this morning (like me!) 

Good Day… And a Tom Terrific Tuesday to you! Well, this is our day of observance of our 2nd “day of infamy” in the history of this country. I’ll always remember that day, with just about everyone in our office sitting around my desk, as I had a small TV sitting on my desk.  That was a horrible day, and one that I hope I never have to witness again…  Well, this is late today… My pain from the plantar faciitis has me hobbling around, and well, I made it from the bed to the chair, and then fell back asleep! Then it was so late, that I almost thought about ditching the letter for today… But then I was reading a piece on Zero  and thought I just had to comment about it… So, here we are…  Billy Joel greets me this morning with his song: The Stranger…  

Front and center this morning, this will be short and sweet, as I’m late and don’t want to take up your lunch hour instead of breakfast hour! UGH!  The Currencies have drifted a bit since yesterday, not really moving much at all, but the bias remains to move them downward VS the dollar. Gold didn’t move much either only losing 80-cents on the day.  But today is a different story for the shiny metal, as it is already down $6 on the day… 

I was putting together my latest DTL piece last night, and pretty much laid the blame for the currencies’ weakness on the European Central Bank (ECB)… You see, the ECB has lagged the Fed in removing their stimulus policies, and as long as the ECB drags their feet on this, the euro will not be able to gain significantly VS the dollar, and if the euro isn’t gaining significantly VS the dollar, the other currencies aren’t either!  

So, come on ECB throw me bone here, before I go to meet St. Peter! I’m serious about that folks! At this point, I’m failing to see when the ECB will begin to remove their stimulus policies… Call me crazy, shoot Rudy, I’ve been called nastier things, but at this point I’m thinking that the ECB will never get around to removing their stimulus policies! 

OK, we’re going in a different direction today, because of this article that I read on yesterday, that was the great James Grant’s response to an oped that Bernanke, Paulson and Geithner wrote for the NY Times…  Yes, they “got the band back together” for a concert of sorts… And this is what they were talking about… 

“After sharing their self-exonerating analysis of the events of 2007-2009 and subsequent response (which one of the three did the fact checking?), Bernanke et al. argue for greater regulatory powers, or as they put it, “adequate firefighting tools,” to resolve future financial crises.

Blanket guarantees of bank debt by the Federal Deposit Insurance Corporation, the Fed’s emergency lending capabilities and the Treasury department’s guarantee of money market funds are among the mechanisms cited by the authors as necessary for crisis prevention and mitigation.”

Well, as you can imagine, the great James Grant, pulled no punches in his review of their article, and it can be found here if you care to read the whole thing… 

I’ll add my two cents to this discussion, by adding that nowhere in the article did it mention that Bernanke had been so wrong on the whole financial meltdown! Recall, when asked what his plans were to deal with a housing sector with falling prices, he responded: “Well, I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So what I think is more likely is that house prices will slow, maybe stabilize: might slow consumption spending a bit. I don’t think it’s going to drive the economy too far from its full employment path, though.”

Yeah, there was no mention of that or any of the other (there are too many to quote them all) quotes he made that were wrong…   But I’ll stop here because my blood pressure is rising, I can feel it! 

To recap… The currencies and Gold drifted yesterday, but Gold is down $6 this morning, and the bias in the currencies remains a downward direction…  Chuck goes after the ECB for this currency weakness, and points out their dragging their feet toward moving their stimulus policies, and then the “band got back together” with Bernanke, Paulson and Geithner writing an oped in the NY Times… UGH!

No FWIW this morning, like they say when the replay a football game on TV, “due to time constraints, we move along in the game”

Currencies today 9/11/18… American Style: A$ .7095, kiwi .6507, C$ 76, euro 1.1585, sterling 1.2997, Swiss $1.0269, European Style: rand 15.1585, krone 8.3660, SEK 9.0688, forint 280.17, zloty 3.7173, koruna 22.1290, RUB 70.16, yen 111.40, sing 1.3777, HKD 7.8491, INR 72.73, China 6.8566, peso 19.35, BRL 4.0768, Dollar Index 95.31, Oil $67.57, 10-year 2.96%, Silver $14.05, Platinum $784.42, Palladium $970.22, and Gold… $1,189.91

That’s it for today… A nice rally from my beloved Cardinals got them a win last night… Not exactly a “good game” from the starting pitcher, left them in a hole, but they recovered… 19 games left, every game is important at this point… (but if they had only won more in April they wouldn’t have to win every game now!) And the games start so darn late on the East Coast! UGH! Well, things are moving along now upstairs, so at least something is getting done!  I’m going to attempt to see a doctor today, hopefully they have something that will move this pain along!  The late Great George Harrison takes us to the finish line today with his song: What Is Life…  I hope you have a Tom Terrific Tuesday, and remember to Be Good To Yourself!

Chuck Butler