January 11, 2021
* Currencies get sold on Friday…
* U.S. Data last week was ugly…
Good Day… And a Marvelous Monday to you…. Well, are you suffering from Football playoff games withdrawal this morning? 6 playoff games this past weekend… Crazy… And the College National Championship Game tonight! I have just a passing interest in the NFL, and on Saturday, I had forgotten about the games being played until it was 8 o’clock at night! The NFL players turned me off to watching them a couple of years ago, and my interest in the games has never really come back. I’m rooting for Alabama in tonight’s game VS Ohio St. I for one, didn’t think that OSU should be included in the final 4, since at that point they had only played 6 games… Not their fault, but still… Try and navigate a full Conference schedule of 10 games, there’s bound to be a bad game there most years… I’m just saying… OK… Head East greets me this morning with their song: Never Been Any Reason…
On a side bar here… The Band, Head East’s first album had a picture of them eating at counter at a restaurant that my good friend Duane and I used to frequent for breakfasts… The Olivette Diner…
OK… I give… I give, I’m calling uncle, stop twisting my arm! Can you hear Gold crying out in pain? Three straight days of engineered takedowns last week, and in the overnight markets more selling…. On Friday, Gold lost $63.80 to close at $1,851.00 and Silver lost $1.71 to close at $25.50… It’s been downright ugly this past week for Gold & Silver, with Gold taking the brunt of the selling… Why? I have no idea why anyone in this day of constant currency printing, zero interest rates, negative yielding bonds, and half the country’s economy shutdown, would anyone that has their head screwed on straight would be selling their Gold… And I say this to all of the Gold sellers… You’ll be sorry…
I really don’t get it… Biden “has said he plans to push out at least two more comprehensive stimulus packages that could add trillions to the U.S. federal debt,, and mean the printing presses for currency debasement will be running overtime… If this pullback in Gold’s price doesn’t scream “buy me” then I don’t know what will… I’m just glad I don’t get the itch to sell my Gold Holdings when it seems that the price manipulators have pushed gold into the elevator going down… If I were still working, I would be looking to add to my Gold holdings, not sell them…
So, it wasn’t just the metals that got sold late last week, the euro, which had touched 1.23 a couple of times and even traded over it last Thursday morning, found the footing very slippery and hasn’t been able to find terra firma since… So, suddenly traders had second thoughts about selling dollars? Did they have a coming to Jesus meeting with the Powers that Be about selling dollars? Because that’s what it sure looks like to me… Traders arrived at their desks on Friday morning, to a memo from the bosses, that said, “Quit selling dollars, now”! And don’t think that this scenario is ridiculous, or unfathomable, because that’s how trading desks work…
I found this little snippet on the forexlive.com site, listen in here: “The dollar will go wherever the Fed does, and the Fed will follow inflation. Already the talk from the central bank is changing. Less than a month ago they were contemplating more QE or lengthening the average maturity of purchases. This week, Clarida and Evans were talking about timelines for tapering bond purchases.
They’ve been strident in forecasting no rate rate hikes into 2024 but that always comes with a caveat about inflation.”
Chuck again… they were trying to explain why they think the dollar is due for a rally… And they think the Fed will hike rates when inflation starts to run higher… Have they not been paying attention in class when I’ve explained how with so much debt the U.S. cannot afford to have higher interest rates, period! It is important to point out though, that in a trend, asset movement is not a ONE-WAY Street, there’s always a chance of volatility, and to me that’s what late last week was… A tempest in a Teacup is more like what’s happening… I do believe… Of course I could be wrong… But I do believe this dollar strength won’t last long…
So, let’s go through the U.S. Data Cupboard prints from late last week… First we had the Weekly Initial Jobless Claims, which were 787,000 for the previous week… That’s not good considering that the week was shortened by the holiday… Then we had the Nov. Trade Deficit which was $68.1 Billion up from the previous month’s number of $63.1 Billion… And we had Clarida and Evans, two Fed Heads, speaking and they both mentioned tapering bond purchases… Hmmmm… On Friday, we saw the BLS version of Jobs for December and they actually showed 140,000 jobs lost in the month, which was pretty darn close to the ADP number of 123,000 jobs lost… The problem with this number is that in reality it was far worse than 140,000 jobs lost… The BLS added 157,000 jobs to the surveys, which means that the surveys showed 197,000 jobs lost in December…
And what’s this I see, is this a disturbance in the force? Avg. Hourly Earnings rose from .3% in Nov. to .8% in December… A .5% gain in wages… This will lead to inflation rising folks… Wage inflation is what the Fed has been waiting for…
We were supposed to see the color of the latest Consumer Credit, (read debt) but it failed to launch on Friday… And that gets my conspiracy controlled mind working overtime, folks…
So, as you can see… The economic data wasn’t good late last week, and so we know that it wasn’t the data that got everyone all lathered up to sell Gold & currencies… Now, does my explanation of what happened make more sense? I thought it would…
In the overnight markets… Before I went to bed last night, I checked the markets as they had opened in Asia, and Gold was down already , $20… I went to bed thinking that this morning I would see Gold down another $50… But to my surprise, the $20 loss has been wiped out, and Gold is down just 50-cents this morning… There had to be a ton of bargain buyers in the overnight markets, to bring Gold back to near even today… And Gold is taking the stairs up after their trip downward in the elevator!
The currencies seem to have plugged the hole in the dam.. And they are sitting at the same levels they closed on Friday. This week, we’ll see what becomes of Biden’s stimulus plans, and how much currency printing will be required… It’s just a darn shame folks, that we, as a country, keep going to the well, of deficit spending… One of these days, we’re going to find that the well had gone dry, we’ll pull up the bucket and there will be no water (currency) and then what will we, as a country do? Can you say default? I knew you could…
I had a dear reader send me a note that someone had written that was titled 545 VS 300,000,000,000 People… (that’s 300 Million!) he’s talking about us! Well, here are a couple of snippets from this excellent piece written by a man named Charlie Reese…
“One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million who are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem
was created by the Congress. In 1913, Congress delegated its Constitutional
duty to provide a sound currency to a federally chartered, but private,
central bank.
It seems inconceivable to me that a nation of 300 million cannot replace
545 people who stand convicted — by present facts — of incompetence and irresponsibility. I can’t think of a single domestic problem that is not
traceable directly to those 545 people. When you fully grasp the plain
truth that 545 people exercise the power of the federal government, then it
must follow that what exists is what they want to exist.”
Chuck again.. This is a very good synopsis of what exists in this country, and that if the people of this country would just wake up and realize that all our problems are direct result of what these 545 people do… Maybe we could vote them out, and start all over again… Maybe…
There’s no data scheduled to print today… So maybe they’ll try to sneak the Consumer Credit data under the radar today… Only the shadow knows if they will or won’t…
To recap… it’s been downright ugly and in the whole forest, for Gold & Silver from Wednesday on… And Chuck gives a few reasons why that shouldn’t be happening, but it is, so use it as a buying opportunity… Currency traders must have gotten a memo to stop selling dollars, which they did on Friday… Gold appears to have taken the elevator down, and will now have to take the stairs back up, but it will… in Chuck’s opinion that is… The economic data was ugly last week too… But who uses fundamentals like economic data any longer?
For What It’s Worth… Once again I’ve come to a place where I wish all this information and proof was around 10 years ago, when I said Gold was being manipulated downward, and was told by the power that be that I couldn’t talk about it any longer, because it was simply conspiracy… Well, now it’s conspiracy fact! This article talks about how Deutsche Bank just had to pay a HUGE fine for manipulating currencies and metals, and it can be found here: Deutsche Bank to pay nearly $125 million to resolve U.S. bribery, metals charges | Reuters
Or, here’s your snippet: “Deutsche Bank AG will pay nearly $125 million to avoid U.S. prosecution on charges it engaged in foreign bribery schemes and manipulated precious metals markets, the latest blow for the bank as it tries to rebound from a series of scandals.
Germany’s largest lender agreed to the payout as it entered a three-year deferred prosecution agreement with the U.S. Department of Justice, and a related civil settlement with the U.S. Securities and Exchange Commission.
Almost all of the payout relates to charges Deutsche Bank violated the federal Foreign Corrupt Practices Act (FCPA) over its dealings in Saudi Arabia, Abu Dhabi, China and Italy, court papers show. Nearly two-thirds of the payout is a criminal fine.
The settlements were made public on Friday at a hearing in the federal court in Brooklyn, New York.
“Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others,” in order to win and retain “lucrative business projects,” Acting U.S. Attorney Seth DuCharme in Brooklyn said in a statement.
In the metals case, prosecutors accused Deutsche Bank traders of placing fraudulent trades, known as spoofing, to induce other traders to buy and sell futures contracts at prices they otherwise would not have.”
Chuck again… I’ll say what I always say when another bank gets taken to the woodshed for manipulating the markets… And no one goes to Jail….
Market price 1/11/21: American Style: A$ .7710, kiwi .7190, C$ .7829, euro 1.2267, sterling 1.3487, Swiss $1.1235, European Style: rand 15.4414, krone 8.5109, SEK 8.2731, forint 296.22, zloty 3.7187, koruna 31.5513, RUB 74.05, yen 104.18, sing 1.3286, HKD 7.7551, INR 73.43, China 6.4744, peso 20.18, BRL 5.4143, Dollar Index 90.44, Oil $51.86, 10-year 1.10%, Silver $25.04, Platinum $1,041.00, Palladium $2,409.00, Copper $3.63, and Gold… $1,850.50
That’s it for today… I hope your team won this past weekend… I no longer have a home team to root for, and by default I get the K.C. Chiefs… They are A Missouri Team! The cold front I talked about coming my way this past weekend, did make it here, but I was still able to sit out by the ocean and read in comfort… In other words, it didn’t actually get cold! Maybe for lifelong Floridians it was cold, but not for me! I received new noise cancelling AirPods for Christmas and I’ve been putting them to work each day! I love they way, when I have to take one out of my ear to hear what someone is saying to me, the music pauses, until I put it back in my ear! I don’t have too much else to say this morning, so I’ll end it.. The Guess Who take us to the finish line today with their song: No Sugar Tonight… I’m sure I’ve talked about how I like the Guess Who’s singer, Burton Cummings… Ok, I hope you have a Marvelous Monday, and please Be Good To Yourself!
Chuck Butler