The Dollar Begins To Get Sold Once Again Overnight…

August 24, 2020

* Currencies, and metals are both on the rally tracks

* Weekly Initial Claims climb back above 1 Million! 

Good day…. And a Marvelous Monday to you! Another Chamber of Commerce weekend, weather-wise for us here in God’s Country….  And the Cardinals took 3of 4 from the Reds, so baseball-wise it was also a good weekend!  Most of my buddies were off to their respective lakes and lake homes this past weekend, which meant I sat out back watching the baseball games by my lonesome…. Oh woe is me… HA! I was watching a bit of TV last night, and the news was on, which usually turns me off, but they were discussing how the police chase method called PIT had caused 30 deaths this past year… And I yelled at the TV… “if the dolts weren’t running from the police, they wouldn’t have had to use the method”…  Of course, all the bleeding hearts will argue with me on that, and I don’t care, because I’m right, and I know it!  Don’t run from the police, period!   The Music Explosion greets me this morning with their song: Little Bit of Soul….  This is one of the first songs I learned to play on the guitar, with Hey There Little Red Riding Hood being the first!

Well, Friday was an interesting day in the markets…. The dollar bugs continued to pile on the dollar buying, thus following up what the PPT started on Wednesday…  The euro really took it on the chin, and Gold dropped $4 on the day to close at $1,943.40…  And once again I have to put my tail between my legs and take my ball and bat and go home….  The beginning of the weak dollar trend that I talked about last week, failed to launch…. That doesn’t mean that it won’t, it just means that it didn’t when I thought it would….  Blame it all on the Plunge Protection Team (PPT) for they got the ball rolling on buying dollars on Wednesday, and it carried on through to the weekend…  

I can hear the Fed Heads when they gather and talk though their masks…  They are kicking the cobble stones and wondering what they have to do to make the dollar less desirable?  You see, the Fed does want Gold to be on everyone’s minds these days, because….  Are you ready for this?  What does a rising Gold price in most cases tell you about inflation? It tells you that inflation is moving higher, and thus the Gold price moves higher….  So, the Fed Heads think that if they cut rates to zero, print currency like there’s no tomorrow, and talk down the economy, that they can get the Gold price to rise, and in their respective minds, they believe that this would indicate to consumers that inflation is rising, and finally, after all that heavy toiling the Fed would have their inflation! 

But it doesn’t work that way, folks…. That’s like putting the horse before the cart…. I’m just saying…

In the overnight markets last night and early this morning, Gold, Silver and the currencies are attempting to run their respective rallies up the flag pole one more time to see if they can do so without interference… Gold is up $9 this morning, Silver is up $1, and the euro is pushing through the 1.18 handle once again…   So, the week is starting out on a good foot…  And like James Brown sang, years ago…  “I gotta get on the good foot”…. 

And the Data late last week was as confusing as it is for a blind dog in a meat packing plant!  Now, that’s confusing, eh?  Well, how do you have the regional manufacturing indexes all come in weaker than the previous month, but then the national manufacturing index rises?  Now, riddle me this Batman… How does that happen?  Well, if you have people that meddle in the data to make it look better, that’s how that happens, Robin…. And it’s time you learned that fact!  I shake my head in disgust that this goes on, but as long as we all know that’s the case, we won’t be fooled by these rogue reports, now will we?

The Initial Weekly Jobless Claims did just as I suspected they would, they climbed back over 1 Million for the week, which makes now 22 of 23 weeks above 1 Million…  The total came in at 1.1 Million, and the Continuing Claims were above 28 Million…  And don’t forget about the contract or “gig workers” that aren’t counted in these numbers… That could add quite a few more to the Unemployed Category, now don’t you think?    Imagine if you were what was considered to be a “gig worker”, and you were unemployed, you get no unemployment benefits, and the Gov’t doesn’t even count you as unemployed…  Now that would disheartening to me…. 

Oh, but the housing market is soaring! Good for that! I saw on TV the other night that you can get mortgage rates in the 2’s….  Now, wouldn’t that have been nice for me when in 1984, I bought my first house with an interest rate tied to T-Bills, which meant it was 13.5% at that time….  I’ve read a lot of stuff about the young crowd doesn’t believe in owning a home (probably because they can’t fix a darn thing, except to change a lightbulb)  and that they felt that it was not worth it to have that much responsibility…. But Come On! You might never see mortgage rates this low again! And if you are someone that has an interest rate that’s much higher than 2%, you had better be finding out how to refi that loan! Like the TV commercial, “What are you waiting for, John Stamos to knit you a scarf?”  Those are funny! 

Yes, I’m sorry to anyone that takes offense at what I just said about the younger crowd, but seriously… Ask one of them if they know how to change a tire on a car… Or ask one of them if they can replace a toilet’s float, and so on…  

And while new and existing houses are getting sold…. The homes that are already semi-owned by Americans, are seeing the largest amount of delinquencies ever….  Sure the Gov’t said that the bank can’t foreclose on these delinquent home owners, but…. That doesn’t just close the book on this, and allow us to walk away worry free….   You see, most mortgages are sold and put into mortgage backed bonds…. Those bonds have payments that need to be made to the bond holders each month….  After a few months of no payments, I would think that these bonds will have to go into default….  Uh-oh… But don’t let that upset your rose garden!  It’s all a part of the financial system breaking down…. Don’t worry, be happy!

I’m feeling quite sarcastic this morning, if you hadn’t noticed! 

I’ve had quite a few dear readers send me notes recently asking me the same basic question… Of should they fabricate their pooled Gold & Silver now, or continue holding it in the pooled account….  So, I thought I would address that here for all to read….  Basically, I would say to pay for and get your metals minted and shipped to you, buy a safe, put them in there and don’t’ tell anyone you have them in your house….

But, the premiums for fabricating/ minting are through the roof right now… So, I do believe it would be prudent to hold on to your pooled metals at this time, and wait for the minting fees to come down, and when they do, then revert to what I said above….  

OK… got that? Good!   Oh! And also I misspoke last week, when I said that Australian Banks were closing their ATMS’s and some branches…. I should have said the 4 Biggest Aussie Banks are doing that…. So, just a minor correction, but one that one of my Aussie readers pointed out to me!

Did you know that the folks at FXStreet post my Pfennig every day that I write it?  Follow them on Twitter, and you’ll see what I get the biggest kick out of, and that is seeing my Pfennig on Twitter each day…. Now, if we can get it on Parler, then well, it will be wider spread!  If you do follow FXStreet on Twitter, make you click the heart on my Pfennig posting!  That would be greatly appreciated!

This week in the U.S. Data Cupboard starts out slow, but as the week hits hump day… Mike, Mike, Mike what day is it? (I still think that’s the funniest  TV commercial I’ve ever seen!)  The data prints will be coming in hot and heavy, with major economic data prints by the boat load , so we’ve got that going for us this week, eh?

The Data Cupboard today only has one of the regional indexes (Chicago), but what good are they, if they can’t be depended on to indicate what to expect in the National report?  So, I’m boycotting the regionals for now on….  They’re useless to me! 

To recap…. Friday was another day of the dollar bugs having the conn…. It all started on Wednesday last week, when the PPT began to buy dollars to keep the dollar from going down a rabbit hole…. That put the idea in traders’ heads that it was too dangerous to sell dollars, with the PPT lingering…. And so the currency rally that was beginning to get noticed, was stopped in its tracks…. Gold lost $4 on Friday, and is still attempting to pull itself up the boot straps and get on the rally tracks again…

For What It’s Worth….  Ok, there I was working on my crossword puzzles on Saturday morning, and I see an email from the GATA folks. So I stop what I’m doing to see what they have to say, and in the email was a snippet for an article on that was made for the FWIW section! It’s a letter to the Fed from the stock market, and it can be found here:


Or, here’s Your snippet: “ Dear Fed,

Hey there! It’s me, the stock market. I know it’s weird to write you like this, but I felt like I needed to drop a quick thank-you note for everything you’ve done for me this year. I mean, your big ol’ balance sheet is almost $3 trillion larger since early March! You’re backing up the truck and loading it with Treasuries and corporate bonds and bond ETFs, all to keep the competition to stocks from fixed-income yields as limited as Jim Cramer’s understanding of me. It’s been a dream come true, honestly. I mean, fess up: Have you been reading my diary?!

Maybe you’ve noticed, but everything else is a royal mess. Covid-19 is still killing people. Parents are dreading the beginning of “school.” U.S. unemployment is still above 10%, higher than it’s been since the 1980s. The country is facing the biggest economic contraction in its history. Corporate profits are plunging. The recession is forecast to continue at least through the first quarter of next year. And me? I’m soaring! Have you seen these record highs I’ve been setting?

To be honest with you, it’s getting kind of wild—and I’ve seen plenty of weirdness before. I’m more popular with sports fans than March Madness! Of course, there was no March Madness this year, so that’s not really a fair comparison—kind of like comparing my dividend payouts to yields in the bond market. Amirite, or amirite? LOL!

But I’m not kidding when I say things are getting REALLY weird. Have you heard of Dave Portnoy, aka Davey Day Trader, yet? He was just some middling internet celebrity until suddenly he’s going viral for using Scrabble tiles to pick stock ticker symbols. The Robinhood set thinks he’s smarter than Warren Buffett! This probably isn’t going to end well, I’ll tell you that much.

Speaking of Robinhood, that whole Hertz saga was about as weird as it gets. A rental car company was trying to sell new shares while in bankruptcy court, because its stock price was on a tear? Let me repeat that: Hertz. Sold. Shares. While. In. Bankruptcy. I can’t even! You’re sure keeping your pals over at the SEC busy! I mean, it’s so weird out there, Bloomberg Businessweek is resorting to cringeworthy satire to make sense of it all.”

Chuck again… this is one of those articles that I wished I could put here in its entirety! This was fantastic! Especially for a a sarcastic, smart alec like me!

Market  prices 8/24/20: American Style: A$ .7197, kiwi .6560,  C$ .7609, euro 1.1842, sterling 1.3130, Swiss $1.1010, European Style: rand 16.9575, krone 8.9609, SEK 8.7500,  forint 296.42,  zloty 3.7136,   koruna 22.0270, RUB 74.77, yen 105.75, sing 1.3674, HKD 7.7500, INR 73.98, China 6.9143, peso 21.89, BRL 5.6176, Dollar Index 92.93,  Oil $42.73,   10-year .63%, Silver $26.96, Platinum $926.00, Palladium $2,078.00, and Gold… $1,952.77

That’s it for today….  You know I had a dear reader ask me how I did what I do under the circumstances of chemo and cancer…. I told him I knew of no other way other than to soldier on, it was how I was brought up, watching my dad go to work every day, with back problem that would stop most men in their tracks…. If he could do that, I can do this….  I did tell him that there are days I wonder how I get out of bed….  I have to commend the SEC, Big 12, and the ACC for at least attempting to have a college football season this fall!  They may get shut down, but then they may get to play, which is what those college athletes want… a chance to play….  I can’t wait to hear Every True Son, played by Marching Mizzou!  In 2008, I was 1 year removed from the cancer diagnosis, two major cancer surgeries, when I attended the Mizzou/ Illinois football game, and when I heard Marching Mizzou, I began to cry, for at one point in the past year I had wondered if I would ever hear them again….  It was like when I walk out of the concourse at Roger Dean Stadium and see the lush green baseball field once again….   Ok… enough of that!  I’m supposed to be a big strong man that doesn’t get sappy!  The McCoys take us to the finish line today with their song: Hang On Sloopy…. And with that I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler