I’ll Take What’s Behind Door #….

February 12, 2018

* U.S. Decides to dig their debt hole deeper!

* The Fed is having deep discussions right now… 

Good Day… And a Marvelous Monday to you… Well, for all of you with inquiring minds that wondered what my triumvirate of oncologists had to say on Thursday, here goes… They decided that the drug I was on that I received through an infusion every 2 weeks, had run its course (like the other 3 drugs I had previously taken) and that I it would no longer benefit me to continue on the drug. So, no more infusions… (I never liked going to those infusion centers anyway, it’s a very depressing place) Instead, once the current drug is out of my system, they will start me on the newest kidney cancer drug, that’s a pill taken each day.  So, I have a couple of weeks before they start the new drug. I’m sure my insurance company will throw a hissy fit about this new drug, like they’ve done before, so, I’m expecting a fight with them.  I totally dislike this waiting though, because at this point I have no idea whether or not I will be able to tolerate the new drug, at least as well as I have the previous 4 drugs.  And that is an unknown…  

So, this is a notice to you dear reader that there could be some major disruptions , with the Pfennig, once I begin to take the new drug, or as it begins to build up in my system. You know me, I’ll battle it, and come out on top, but at this point, I don’t know how difficult a battle it will be.  So, I’m not going to worry about it, that’s a worry for another day.  For now, I’m enjoying sunny and 80 degree days in S. Florida, gathering up lots of Vitamin D, and having fun with my neighbors down here. They’ll all go home at the end of this month, and that’s when my St. Louis visitors begin, and that’s when the real party, starts! I just hope I’m in good health to participate and party!  

I’m getting a very late start today, sorry about that, I hit the wall last night, fell asleep in my chair and sometime during the night I got up and went to bed, where I slept right past my alarm! UGH! I guess I needed to sleep, eh?

Well, there’s not much going on in the currencies these days, they’ve backed off their lofty levels of two weeks ago, but have stabilized at this point and seem to be trading sideways, with the Big Dog, euro, remaining on the porch, and all the little dogs waiting for their chance to get back to chasing the dollar down the street. 

So, late, last week, while I was being poked and prodded by nurses, the U.S. finally came up with a spending plan… Before I get into it, I have this question to ask… “What happened to all the momentum the Tea Party people had a few years ago?”  Alright then, let’s get into this, because, well, the lawmakers have kicked the can down the road a little more with regards to reining in the debt.  These mental giants believe that the way to prosperity is to dig the debt hole your in, a little deeper! What on earth are these guys thinking?  I’m sure they didn’t learn any of this in their economic classes in school, unless their professor was Paul Krugman! 

The Budget calls for the annual deficit spending to increase and the deal  would eliminate strict budget caps, set in 2011 to reduce the federal deficit, and would allow Congress to spend about $200 Billion more in the current fiscal year and in fiscal year 2019. That’s $200 Billion more than we were already slated to spend… $575 Billion…  Are we nuts?  We just passed a tax cut bill, and now we’re raising our debt? Those two things together are a recipe for disaster folks… 

The prudent thing to do after passing the tax cut bill was to reduce spending, but NOOOOOOOO! Our elected representatives, know better than you and I folks, they just know that the path to prosperity is to spend more money than you can every imagine having!  And all this spending is going to mean more issuance of Treasuries at a time when foreigners are backing away from buying them! What a mess!  No, it’s absolute madness! Madness I tell you! Serenity NOW!   

Oh, and that leads me to another discussion that’s bound to begin to take place in the Eccles Building (Fed HQ)…  What is the Fed going to do about all this?  They have two choices, right now… They can stop their rate hikes, and even go as drastic as implementing more QE (which would help with the additional Treasury issuance) to stop the bleeding in the stock market, or, they can continue their rate hikes, make debt servicing almost impossible for the U.S. Gov’t, but keep a lid on the rising inflation… 

What’s a Fed head to do? What’s it gonna be boy? Will the pick what’s behind door #1 or Door #2?  This is going to be interesting to see how it plays out. I suggest you keep a journal of these decisions by the Fed, because one day, your great-grandchild is going to ask you, a question, about what happened to the great country that they read about in the history books!   I could go on and on about this stuff folks, but I don’t want to bog you  down or bore you, so I’ll just leave it at this…  Our country can’t get Great Again, when we’re drowning in debt… period! 

Gold closed down a couple of bucks on Friday, but is up $4.60 in the early trading so far today.  The number of contracts in Gold traded on Friday were just shy of 300,000… One of these days, the COMEX will break down the trades for us, and tell us which ones were buys and which ones were “shorts”…  Now that would be helpful, wouldn’t it?  But, I doubt we’ll see that in our lifetime… UGH! There’s just too much protection for the short Gold & Silver paper traders… And that’s all I’m saying about that today! 

The U.S. Data Cupboard doesn’t have much for us until we get to Wednesday, which happens to be Valentine’s Day. On Wednesday we’ll see Retail Sales…  Tomorrow we’ll see the percentage increase in Household Debt, which if it goes higher, won’t surprise me one iota! 

To Recap… The currencies have stabilized after a week of getting sold. The U.S. lawmakers decided to dig their debt hole a little deeper in hopes that it straightens things out… Dolts, all of them! The Fed is down to two choices folks, what’s it gonna be boy?  And the U.S. Data Cupboard is pretty barren until Wednesday, Valentine’s Day.   

For What It’s Worth… Here’s an interview with our old friend, Jimmy Rogers, who’s been pretty quiet in recent days… I can be found on Bloomberg.com or here: https://www.bloomberg.com/news/articles/2018-02-09/jim-rogers-says-next-bear-market-will-be-worst-in-his-lifetime   

Or, here’s your snippet: “Jim Rogers, 75, says the next bear market in stocks will be more catastrophic than any other market downturn that he’s lived through.

The veteran investor says that’s because even more debt has accumulated in the global economy since the financial crisis, especially in the U.S. While Rogers isn’t saying that stocks are poised to enter bear territory now — or making any claim to know when they will — he says he’s not surprised that U.S. equities resumed their selloff Thursday and he expects the rout to continue.

When we have a bear market again, and we are going to have a bear market again, it will be the worst in our lifetime,” Rogers, the chairman of Rogers Holdings Inc., said in a phone interview. “Debt is everywhere, and it’s much, much higher now.”  

Chuck Again, I think it would be prudent to listen to Jim Rogers, folks… And that means back up the truck to the Gold & Silver window…  At least that’s what I think he’s saying…  

Currencies Today 2/12/18… American Style: A$ .7832, kiwi .7240, C$ .7937, euro 1.2240, sterling 1.3821, Swiss $1.0647, … European Style: rand 11.9425, krone 7.9578, SEK 8.1044, forint 254.82, zloty 3.41, koruna 20.7033, RUB 58.35, yen 108.71, sing 1.3261, HKD 7.8198, INR 64.31, China 6.2913, peso 18.66, BRL 3.2937, Dollar Index 90.31, Oil $60.35, 10yr 2.86%, Silver $16.35, Platinum $961.55, Palladium $984.44, and Gold… $1,320.30

That’s it for today…  Big wins this past weekend for both the Missouri Tigers and St. Louis U. Billikens basketball teams. Pitchers and Catchers report tomorrow, YAHOO! I’ve had to stop and start the letter over again a few times this morning, making it even later than I originally thought. I’m not having a good morning, wink, wink… Today is also Lincoln’s Birthday, which should be a holiday, and that’s all I’m saying about that! Are you ready for Valentine’s Day?  And with that…  The Doobie Brothers take us to the finish line today with their song: Ukiah…  I hope you have a Marvelous Monday, and Be Good To Yourself!   

Chuck Butler