One Step Forward… Two Steps Backward….

August 17, 2020

* Gold & Silver get sold again on Friday! 

* But Currency traders are selling dollars hand over fist! 

Good Day… And a Marvelous Monday to you! Man… did the weather here change for the better in the past few days, and from what I see it should remain that way for the rest of this week!  It was such a beautiful Sunday morning yesterday, as I sat out back listening to my symphonic music station… I began to sing this song… Blue skies… following me, nothing but Blue Skies, do I see… Blue Bird singing a song, nothing but Blue Skies from now on…  I bet I had a few of you singing along, eh?  That reminds me of my last visit to Vancouver for the Agora Symposium. I got nearly everyone in the audience to sing along with me: Trini Lopez’s Lemon Tree…. If you were there that day, send me a note, and let me know what you thought…. For it was the first time anyone at the then famous Agora Symposium, had the nerve to not only sing on stage, but also get everyone in the audience to sing along! Our Marketing guru, Suzanne Lee, recorded the event on her phone…  Which was a good thing… Because, Frank Trotter, the big boss, didn’t believe what he had heard I had done! I used to have a fair singing voice, with a wide vocal range, but 13 years of chemo has left my voice to have no range, and sound very low…. Elvis greets me this morning with his song: Are You Lonesome Tonight… Don’t laugh, I grew up with Elvis playing on the record player….

Well, the markets on Friday were interesting in that the dollar bugs won out for the week with regards to Gold & Silver, and they lost out for the week regarding the currencies…  The boys in the band had their way with Gold & Silver on Friday, after the two metals had rallied strongly on Thursday… But the overall week for the two metals was not one to write home about… Corrections, short sales, profit taking, they all played a part in the ups and down of the two metals this past week.  I had just told you last week before the big selloff, that Gold & Silver needed to go back an fill the gaps they jumped over on their way higher, and once that was done, then we could move forward… I had no idea that the selloff was going to be more than $100…. I would say that all the “gaps” have been sufficiently filled at this point, but I won’t say that the boys in the band have gone home…. They are like the proverbial wolf at the door for Gold & Silver…. 

In the early trading this morning, Gold is down another $16 to 1,944…  One step forward, two steps backward, is what this feels like to me… Thursday, Gold was up, and Friday and today its down….  UGH!…. Oh well, we all know that in the end, the boys in the band will get what they deserve, but why do we have to wait so long for that to happen?  Life…  patience is a virtue, and good things come to those who wait, and all that… 

So, we know that Gold & Silver have still booked some heady gains so far this year, ever since March I should say… And since I started today’s letter off talking about Gold & Silver, I thought that this would be a good place for this quote I found on Grant Williams’ Things That Make You Go Hmmmm…. Letter yesterday…. Check this out: “”Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them.”– David Ricardo

And then there’s also this from TTMYGH….. “”It’s important to highlight that both periods of extremely depressed commodities prices (1970 & 2000), were accompanied by overvalued equity markets and related investment bubbles – a situation that exists once again today.”– Leigh Goehring & Adam Rozencwajg

WOW….  Those things really hit the nail on the head as far as I’m concerned…  Just think of the currency printing that just keeps getting larger and larger by the day…. And then think about what a debasement for a country’s currency that all that currency printing will do….  The currency traders see it, and they have begun to unwind their long dollar positions…  And like I said last week, this couldn’t come at a worst time for the countries with currencies that are rallying…. These countries don’t need strong currencies interfering with their respective attempts to bring back their lost economies….  But guess what? Currency traders don’t care….  And if a foreign country’s currency rises because Currency traders are selling dollars, then so be it….

So, what we’ll end up seeing is these foreign countries attempting to squash the rise of their currencies VS the dollar, with intervention… First they’ll attempt jawboning their currencies lower, but when the doesn’t work, they’ll resort to intervention…  In the old days, I would say that Central Banks that can print as much currency as they want had bigger pockets than the markets… But these days, I have to wonder, for these Central Banks of foreign countries have used a lot of the arrows in their respective quivers….  At some point, and this includes the U.S., the markets will begin to choke on the amount of currency they are being dealt with…. And when that happens, we’ll find out that the markets have deeper pockets than the Central Banks…

We saw the euro climb back above the 1.18 figure last week, and remain there as the books all closed on Friday…  I know there’s been a lot of gyrations with the currencies, and just when it appears the dollar is about to fall off a cliff, something happens to revive the dollar… But then a few days later,  we’re looking at the dollar the same way as we did previously, and Chuck will say, “we could be seeing a weak dollar trend beginning”  only to have egg on his face once again…. But one of these days, Alice…. To the Moon!

It wasn’t that long ago that we as a country passed $26 Trillion in current Debt….  Last night I checked the Debt Clock and found that we’re well on our way to $27 Trillion in current Debt…  (%26.648 Trillion) We’ve moved into the 130% of GDP (not using the Covid-19 GDP numbers) And the Bank for International Settlements (BIS) told us many years ago that “When government debt exceeds 85% of GDP, economic growth slows.” Which is something I’ve said for many years now, and that is when the debt level grows too large, the economy has to slow down…. And for the last 10 years we’ve only averaged 2.1% GDP….  And as the debt grows, and it will grow, trust me on that one folks….  First of all our current President has shown he’s no match for the spending habits of our Congress, and if the new guy gets in, I can’t even imagine how quickly the debt will grow….  I’m just saying…. 

So, it’s no surprise to me that currency traders are taking their shots at the dollar bugs…. We saw last week that the PPT (Plunge Protection Team) can be formidable foes…. But is this a game that they want to keep playing? Because currency traders have been known to stay until the end of the game, no matter the score of the game….

And al this does is move up on the calendar all the chaos I told you about that was going to happen, for if these countries have a soaring currency that’s going to just add to all their woes, and will probably bring about their collective announcements of debt default….   I’m just saying…

The Fed? They’re playing with fire folks, and you know what they’ve said about people who play with fire, they end up getting burned….   The Fed as I told you last week, is hell bent and whiskey bound to see inflation rise, and they, the Fed heads, believe that they know when to pull away the punch bowl that’s feeding the inflation….  Well, I’m from Missouri, and the Fed Heads are going to have to show me that they have chutzpah to pull away the punch bowl, once they’ve given everyone a heaping cup full of inflation….  

I’m not a betting man…. Oh, I’ll bet a shiny quarter but other than that, I worked long hours for the currency I have, I don’t want to lose it in a betting game!  I used to play nickel, dime poker, but even then, if I had a losing night, I was devastated….  But I said all that to say this…. I doubt seriously that the Fed Heads can perform in the batter’s box, when Bob Gibson, or Nolan Ryan, or Sandy Koufax is about to come home with their best pitch….

So, how are you doing with Covid-19?  You know I’ve been around my family off and on since this began, and so far so good… I even have driveway happy hours with distancing and no masks, as we’re outside, with my neighbors and friends….   I’m not saying this virus isn’t real, but I’ll go to my grave with the thought that we should have done this differently… We should have identified those of us at risk, and quarantined us, and allowed everyone else to go to work….  Sure there would have been large numbers of positive cases, but….  Then the herd immunity would happen….  

Longtime Congressman and author of a few books, Ron Paul, of whom I’ve always admired as someone who didn’t allow himself to get tainted with the deficit spending paint that every other congressman allows themselves to be painted with….   So, when Ron Paul speaks about something I listen….  And here’s his take on the pandemic….  (I know a lot of you won’t agree with this, but please listen to what he has to say)

“But what’s happening in America right now is being taken advantage of by those who want to profit politically from the panic.

To them, it’s a perfect chance to steal more of our constitutional freedoms and set America up for a socialist future.

If that sounds too extreme, just consider:

•   The Department of Justice recently asked Congress for the ability to detain Americans—without trial—during “emergencies” like this…

  • Others have proposed we “eliminate all political borders”…
  • And according to a recent story in Politico, the White House Coronavirus Task Force is considering creating a national surveillance system to track Americans’ health information – essentially a healthcare Patriot Act!

Chuck again….  Yes, just like the Patriot Act that got shoved down our throats under the guise of “We need this to protect us against terrorists”….  The powers that be will use this pandemic as an opportunity to take more of your civil liberties and freedoms away from you….  

That’s my 2-cents worth, and everyone that doesn’t agree me and Ron Paul, please don’t unsubscribe, for I’m sure that I’ll say something that you agree with soon…

OK…. The U.S. Data Cupboard last week, ended the week with some real economic data prints…. July prints of Retail Sales, Industrial Production and Capacity Utilization…. So, let’s go through them, eh? 

July Retail Sales showed only a 1.2% gain, when 2.0% was expected, and June’s print was 8.4%…. Oh, if had a nickel for all those that said last month that the 8.4% increase was proof that the economy was rebounding, I would be able to play poker again!  Industrial Production also disappointed, showing only a 3% gain in July VS the 5.7% gain in June…. Once again more nickels for Chuck’s poker game!  The one piece of data that was surprisingly strong was Capacity Utilization… which rose from 68.5% in June to 70.6% in July…  I would venture to say that all the re-closings that have been going on, will bring that number back down in August… We shall see, eh?

One print that was also interesting was the Initial Jobless Claims on Thursday last week, that showed for the first time in 21 weeks, that the Claims for the week didn’t total more than 1 Million…. Instead it was 963,000….  Not exactly a strong number for a recovery, but still not 1 Million or more!  The Continuing claims also fell to 28.3 Million…. So, some people either falling off the rosters of those receiving checks each wee, or a smattering of people going back to work… Which is tenuous at best, right?

To recap…. Gold & Silver were up on Thursday, down on Friday, and down for the week… The currencies were up for the week even with a midweek selloff, VS the dollar…. Chuck talks about all the currency printing going on around the world, and at home, and points out that the Fed can’t print Gold & Silver….  He also prints some quotes he found on TTMYGH…. And then he goes nuclear on the moves that the powers that be are attempting to get approved that takes away more of our civil liberties and freedoms….  You may not like him much after that, but it had to be said….

For What It’s Worth….  A couple of times through these past couple of years, I laid out what I see happening in the future, with regards to the end of cash currency, and see it replaced with digits…. Well, I was glad to see my good friend Dennis Miller, write about this subject. So, his article can be found here: 

Or, here’s your snippet: “At the local convenience store, my wife Jo handed the clerk a $5 bill and waited for her change; finally asking for it. The clerk said, “We have a coin shortage. We have to round things to the nearest dollar.” Screw that! She dug in her purse, cobbled together the correct change and demanded the clerk give her a dollar back – while the line of “social distanced” customers behind her grew long.

The next day she bought a fountain Coke, normally $1.00 plus tax. The clerk said, “$1.00 please.” The merchant absorbed the tax. There are signs in the local stores saying they have a shortage and will buy rolled coins.

My BS meter went into full alert. A government capable of putting a man on the moon could solve a coin shortage in a matter of a few weeks. If there is a shortage, it’s because some politicos, or bankers want to create one.

Sure enough, Ron Paul’s article, Fedcoin: A New Scheme for Tyranny and Poverty, appeared.

“If some Congress members get their way, the Federal Reserve may soon be able to track many of your purchases in real time and share that information with government agencies. This is just one of the problems with the proposed “digital dollar” or “fedcoin.”

…. Some progressives have embraced fedcoin as a way to provide Americans with a “universal basic income.”

Both the Senate Banking Committee and the House Financial Services Committee held hearings on fedcoin in June.

…. Fedcoin would not be an actual coin. Instead, it would be a special account created and maintained for each American by the Federal Reserve. Each month, Fed employees could tap a few keys on a computer and – bingo – each American would have dollars added to his Federal Reserve account.”

Chuck again… Well, like I said above, I’ve talked about this several times now, the end of cash, and after my last tirade against this move, I even pointed out that the U.S. Gov’t was already looking into their own version of digital currency…. 

P.S. I don’t know if you’ve noticed this or not, but in the past week, I’ve stopped referring to the dollar and currencies as money, and instead calling them “currency”, because that’s what they are…. Real money is Gold & Silver, or a currency that’s backed by either of those two metals….

Market  prices 8/17/20: American Style: A$ .7186, kiwi .6526, C$ .7558, euro 1.1853, sterling 1.3085, Swiss $1.1013, European Style: rand 17.4310, krone 8.8710, SEK 8.6942, forint 293.57,   zloty 3.7058,    koruna 22.0363, RUB 72.84, yen 106.28, sing 1.3700, HKD 7.7500, INR 74.68, China 6.9491, peso 22.01, BRL 5.4215, Dollar Index 92.99,  Oil $41.92,  10-year .68%, Silver $28.40, Platinum $982.00, Palladium $2,179.25, and Gold… $1,944.00

That’s it for today…. Well, the weekend began with a driveway happy hour and I was giddy with surprise when a couple of my former colleagues showed up that I was not aware of their intention to come…. It was great to see Danielle, Christine, Aaron, Mike and Kristin….    Then the weather began to get nice on Saturday, and Sunday was just gorgeous! And I got to play with “my girl”. Little Evie was here, and we had a good day together! And…. The Cardinals got back on the diamond for the first time in 17 days, with a double header sweep of the Pale hose! Both games were played during the day, and longtime readers know I absolutely love day baseball games!  Sunday they took one on the chin, but still they were playing again, and I was so happy!  Now they have to play 5 games in 3 days VS the Cubs…. I doubt either team has enough pitching for that onslaught of games, so we’ll have to see who has more pitching depth, eh?  And very late last night, our Blues won in OT to stay alive in their defense of their Stanley Cup Championship last year…  The Beatles take us the finish line today with their song: When I’m 64….   Will you still need me, will you still feed me, when I’m 64?   I hope you have a Marvelous Monday, and will Be Good To Yourself!

Chuck Butler