Gold & Silver Get Taken Off At The Knees…

September 22, 2020

* Currencies, metals, Oil and stocks all get sold… 

* Does Kaplan “get it”? 

Good Day… And a Tom Terrific Tuesday to you! Another Chamber of Commerce day here in the Midwest yesterday… I had a lot of things to do yesterday, so I didn’t spend the day reading articles once again… So, I have no idea what will happen, but this could be a short-n-sweet letter today, But I won’t promise you that! You know that I told you that Kathy is gone again, so that leaves me cooking dinner for Alex (and myself of course!). I love to cook… no problems there… I totally disdain the cleanup afterwards…  And I’m not one for leftovers, per se, there are some I like, but for the most part, no thank you on the leftovers. So, when I’m in charge, it’s down the garbage disposal with any food left. Which isn’t a ton of food, given that Alex eats like a horse! Bob Marley greets me this morning with his song: One Love/ People Get Ready…  I’ve got to be “in the mood” to listen to Reggae… But I absolutely love steel drum music!

Well, it was an all hands on deck day to buy dollars, as the dollar bugs danced in the street… The Currencies lost more ground in the U.S. buying of dollars that began in the overnight markets and carried through the day…  The Fed is doing their best to make the dollar unattractive, the President says he wants a weaker dollar to offset the Chinese manipulation of their currency, and still the dollar bugs get to dance in the street….  If I were training a new currency trader, I would tell him front and center that these are not the fundamentals that your father knew….  

For the record… Gold lost $36.50, to close at $1,912.40, and Silver lost an eye-whopping $2.03 to close at $24.68…  As Ed Steer says this morning… “Da Boyz really smoked the metals”…  That’s a real shame folks, but… as I always say, for those of you who have procrastinated for years now, this is an excellent buying opportunity…  What are you waiting for! Put down this letter, and call Tim Smith at 1-800-926-4922, and tell him you need to buy some Gold!   (or Silver, whatever floats your boat!) 

What are people buying these days, because it certainly isn’t stocks, bonds, currencies, metals, or Oil… I know that the wealthy have been moving out to the country, and paying more than asking price for places not in NY, Cal, Mich, and so on… But, while a house could be considered an investment choice, it doesn’t make up for the rot that’s on all investments’ vines….

St. Louis Fed President, James Bullard, says that we better get ready for some real inflation sooner than Wall Street is expecting….  I wonder what made him think that, and then actually say it out loud?  Oops, did I say that out loud?  HA!  But he said it, and MarketWatch reported it…. So, Does Bullard know something we don’t? Like is the Fed getting their helicopter gassed up and ready to fly?  Or do they get private messages from Congress?  Well, whatever it was, I think he’ll be proven to be wrong….  There is still no velocity of currency, folks, and until velocity begins to spiral upward, inflation is an afterthought…. 

And the problem with dropping currency from the Fed’s Helicopter, besides it being totally the wrong thing to do, is that when you have families in need like we do now, after weeks of not being able to work, and earn currency, is that they’ll have to use the currency they gathered on the streets, that was dropped from the helicopter,  to pay off debts they’ve built up for the last 6 months…. Like rent…. Mortgage payments… the grocer…. Student loans, etc.    And therefore the velocity of currency will remain stagnate….  

But when you get down to when the rubber meets the road, you’ll eventually get your currency velocity, and inflation, for we are Americans, and while it would be better for us personally to save and grow wealth, we’re going to spend, that currency, and that’s when things get going… But first we have to deal with the guilt of not paying rent and mortgage payments, etc. Once that’s taken care of, then it’ll be party on Wayne, party on Garth! 

I used to be treated, when at EverBank, to an economics professor at St. louis U., who would come in and allows us to ask questions economics related of course….  And one time I questioned the astute professor about money supply, and that I had learned from my economics professors that sharp increases of money supply will increase inflation… And what that right?  Well, you must remember that this long before 2008, and certainly what’s going on now…. She reminded me that velocity of money was the key, not just money supply….  And so now you know where I learned that lesson!

OK… remember a few years ago, when Gold rose steadily since 2002 to reach $1,917, and the Gold miners got a lot of the blame for the fall of the price of Gold in 2018…  You see, since Gold had gone a long term bull market run, the Gold miners splurged and got out of whack with fundamentals…. Well, the folks at GATA sent me this note yesterday, that I found to be interesting: “The world’s top gold miners sought to reassure investors on Monday that they’re not going on a spending spree despite surging gold prices boosting their shares and free cash flow.

Miners are opting to give more cash back to shareholders rather than plotting takeovers that the market may disapprove of with the COVID-19 pandemic far from over.”

Chuck again… I came across these numbers for Gold that I found very interesting….

Here’s Gold’s performance since starting to rise in 2000….

The last 30 days    -$24.85   1.28%

Last 6 months      +$345.70  27%

In the last year     +389.06   25.53%

Last 5 years           +787.76    70.02%

Last 20 years        +1,638.81   598.22%

I bought my first Silver in the early 80’s…. I bought my first Gold in 2005, after reading the book “Hot Commodities” by James Rogers… And I was the first to use the non-allocated buying facility at EverBank!  

In 2010, sitting around a table at our local hang out, the boys were talking about how they could become rich… And my good friend Duane said, “well, if we had all listened to Chuck 6 years ago, and bought Gold, we’d all be rich!” 

OK, enough of that….

The U.S. Data Cupboard today, just has the Existing Home Sales data for August, and 3 more Fed Head speeches, to follow up on yesterday’s 5 Fed Head speeches… I think I mentioned yesterday that there will be a lot of Fed Head speeches this week…  There’s really no other data today, folks, so the asset classes are on their own today. 

In one of the Fed Head Speeches yesterday, Dallas President Robert Kaplan said something that made me think “he sees what’s going on, but can’t stop it for he’s just one vote”….  Kaplan said, that “he’s worried that new forward guidance will spark risky trading.”   Now being the smart Alec that I am, I would normally say, “You think?” , or “Really?”  But since I had this thought that maybe he does “get it”  I won’t be a smart alec today… 

To recap… The Boys in the band took Gold & Silver out at the knees yesterday… Gold lost $36, and Silver lost $2, in the most blazingly obvious market manipulation, ever!   We have the Fed talking about allowing inflation to rise higher than 2%, and that interest rates will remain near zero for many years to come, and Gold should be climbing the stairway to heaven, but instead the boys in the band show up at the COMEX with arms full of short Gold & Silver trades, and the dirty deed was done….  It’s shameful, it really is that they are allowed to do this…. 

For What It’s Worth…. Well, what do I have here today? I have an article from the Russ and Pam Martens of, who have taken another run at JPMorgan…. This time on Money Laundering, and it can be found here:

Or, here’s your snippet: “The International Consortium of Investigative Journalists (ICIJ) has once again managed to do what federal bank regulators refuse to do in the United States – come clean with the American people about our dirty Wall Street banks.

ICIJ dropped a bombshell investigative report yesterday about money laundering for criminals at some of the biggest banks on Wall Street, but you won’t find a peep about it on the front page of today’s Wall Street Journal or New York Times’ print editions. In fact, the New York Times, as of 6:44 a.m. this morning, hasn’t reported the story at all. The Wall Street Journal carries an innocuous headline, “HSBC Stock Hits 25-Year Low,” putting the focus on the British bank, HSBC, when its focus should be on the largest bank in the U.S., JPMorgan Chase, a serial felon.

JPMorgan Chase has already pleaded guilty to three criminal felony counts brought by the U.S. Department of Justice since 2014. Two of those counts related to money laundering and failure to file suspicious activity reports on the business bank account it held for Bernie Madoff for decades. JPMorgan Chase actually told U.K. regulators that it suspected Madoff was running a Ponzi scheme but it failed to share those concerns with U.S. regulators, even though it was required under law to do so.”

Chuck again…. When will all this madness stop? Oh, I know the answer to that question, choose me teacher, choose me! OK… I believe that until one of these CEO’s goes to Jail, these unlawful things will continue….  

Market  prices 9/22/20: American Style: A$ .7221, kiwi .6667, C$ .7517, euro 1.1755, sterling 1.2810, Swiss $1.0929, European Style: rand 16.6440, krone 9.3032,  SEK 8.8523,  forint 307.43,  zloty 3.8175,  koruna 22.9650, RUB 76.04, yen 104.57, sing 1.3621, HKD 7.7499, INR 73.42, China 6.7826, peso 21.38,  BRL 5.4069,  Dollar Index 93.65,  Oil $39.35,  10-year .67%, Silver $24.29, Platinum $882.00, Palladium $2,293.00, and Gold… $1,911.20

That’s it for today….  The Cardinals lost to the Royals last night. UGH! The playoff push is tightly contested, among 4 teams, and the Cardinals can’t afford to lose a game, much less to the Royals! I told you all in August when the two teams played my dislike for the Royals…. So I won’t repeat myself, here that is…. This is day 4 of being alone during the day….  I did get a quick visit from darling daughter, Dawn and her kids, little Delaney Grace, and Everett…  I did get a little sunburn on my face on Sunday, so I was careful yesterday…. But the days are so beautiful I have to be outside to enjoy them! Well, the plan the wound center doctor laid out for me, and my legs, has taken a bad turn… I can’t keep them healthy for any long period of time…. UGH!   I received my new Cormoran Strike book last week, and it’s a long one! 966 pages long!  I only read about 35 pages a day, sometimes more, so it’ll take me more than a month to read the book!  And with that…. The Rolling Stones take us to the finish line today with their song: Can’t You Hear Me Knocking….  One of my fave Stones songs…  So… I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler