April 13, 2021
* Currencies & metals lose ground on Monday
* Yellen says China is not a currency manipulator!
Good Day… And a Tom Terrific Tuesday to you! Well, I do believe the pool deck workers have finally finished, but we can’t walk on it until tomorrow… That means I have to find a different place to sit out and read… My beloved Cardinals are proving me to be correct, with my Spring Training thoughts about how they can’t hit… They are in need of a Big Bat, lefthanded preferably, that plays the outfield… Chances are… They’ll still be needing that at the end of the season! UGH! Our Blues had their game postponed last night, and next play in Colorado on Wednesday. There aren’t a lot of what you would call Big Games in hockey’s regular season, but… Tomorrow night’s game is a Big Game for the Blues… Yes, greets me this morning with their song: It Can Happen…
Well the dollar bugs fought back yesterday, and the dollar saw it’s best day in a week… the moves weren’t strong moves, but moves in the dollar’s favor nonetheless… The euro dropped back below 1.19, and the Dollar Index rose from 92.02 yesterday morning to close at 92.21… And Gold & Silver didn’t help any VS the dollar, as Gold lost $11.60 on the day to close $1,733.70, and Silver lost 47-cents to close $24.88… The Gov’t is spending currency like there’s no tomorrow, the Cartel is printing currency like there’s no tomorrow, and the current debt is more than $28 Trillion, and the all-time best safe haven asset (Gold) is getting sold… Go figure…
In the overnight markets… There hasn’t been much movement in the currencies, as evidenced by the Dollar Index, which is trading at 92.24 this morning up from last night’s close of 92.21… Silver is outperforming Gold this morning, with Silver up 16-cents in the early trading, while Gold stumbles out of the starters’ gate, down $2.90…
Well… Yesterday, I wrote about how we needed to be on the lookout for how the inflation rate is calculated on a year -on-year basis, because of the awful prints in the early months of the pandemic, and guess what the good folks at GATA sent me yesterday? An article on Bloomberg talking about that same thing… I got this from: https://www.bloomberg.com/news/articles/2021-04-12/simple-math-is-about-to-cause-an-inflation-problem-quicktake And here’s a quick snippet from the article:
“No economic question is being debated more right now than whether the United States will see a sharp rise in inflation. But the answer for the next few months is simple: Yes.
Due to the way the government’s inflation metrics are calculated, what will appear to be significant price increases are all but guaranteed. The phenomenon is known as the base effect, a term worth keeping in mind when new figures make the argument even wilder.”
Chuck again… Crazy how that works isn’t it… Makes me wonder, do the folks at Bloomberg read the Pfennig? Nah… That couldn’t happen, they’re the Big Boys, they don’t need to read the Pfennig!
But if they did… That would be a hoot and half!
OK.. So… Treasury Sec. Janet Yellen, announced yesterday that the U.S. would not name China a currency manipulator… Boy I can see the Chinese back slapping with congratulations for each other on what a great job they did, hiding their currency manipulation from the U.S. ! HA! Well, no, really I see them saying, “so what”… “Who cares”… We’re China and we do what we want to do whether the U.S. agrees with it or not”… So, the renminbi rallied on the day after the announcement… Hmmm… You know I think I’ve told you this before, but stay with me here… My dad used to tell me that China was a sleeping giant, and the world would behoove itself to not wake them up… Well, we woke them up about 20 years ago… And ever since, they’ve been out to gain governance of the world!
Speaking of China… Long ago, and oh so far away, I fell in love with you, before the second show… OMG! Quit that Chuck! OK… so long ago, I told people that China was gaining a wider distribution of their currency by having these currency swap agreements signed between China and its trade partners, and that a wide distribution of their currency was the first step to gaining a reserve status for the renminbi. The other BIG Step was to have a bond market, that their trade partners could invest their profits in and not have to convert their renminbi holdings to dollars to buy U.S. Treasuries…
Well, yesterday, I was reading the “5” by Dave Gonigam, (Five Minute Forecast) and came across this bit of information from James Rickards… “China is also creating a Chinese yuan bond market so the countries who earn trade surpluses in yuan will be able to invest in yuan-denominated government bonds instead of being forced to buy U.S. Treasuries.”
Chuck again… all I have to say to that is… Uh-Oh, spaghetti O’s… (for the dollar!) Now, it will take China a few years to get up and running with a bond market folks, things like this do not happen overnight, but this is just another in the long run of things that will act as a gauntlet for the dollar down the road…
And things in Russia/ Ukraine seem to be heating up again… The last time these heated words turned to armed action, the ruble got whacked badly, and this time, the ruble is already getting whacked because traders are certain that these heated words will turn to armed action once again… For all of you who own rubles, I would simply say that this is a time to batten down the hatches, and don’t open the hatches to look out until the all-clear horn has sounded… Well, that’s what I’m going to do with my rubles… I’m just saying…
Ok, yesterday I told you I had a graph that showed the loss of buying power in the dollar through the years that the Cartel has been around… And since I can’t get it on the letter I’ll give you the items and let you see it that way…
A dollar, in 1931 would buy 30 Hershey Bars it would cost you $26.14 today
A dollar, in 1922 would buy 10 rolls of Toilet paper, it would cost you $15.14 today
A dollar, in 1923 would buy 10 bottles of beer, it would cost you $19.91 today (unless you at the ball park where 10 bottles of beer would be $100!
A dollar in 1944 would buy 20 bottles of Coke, it would cost you $14.71 today
A dollar in 1964 would buy you 1 drive-in movie ticket, it would cost you $8.35
There are more but these really show the loss of buying power in a Big way… courtesy of the Cartel’s monetary policies through the years, and Congress’s inability to to rein in deficit spending…
I’m sure you have some examples of loss of buying power too… Because as I’ve always said, inflation is a personal thing…
OK… well the U.S. Data Cupboard last Friday has the March PPI (wholesale inflation), which surprised everyone in the markets, but not me, by rising at the fastest annual rate since 2011! The 1.0% monthly rise should be an indicator of how strong CPI (consumer inflation) will be, because, I don’t think Companies can not afford to not pass on the price increases they’ve received to consumers…
And this morning the stupid CPI will print… There’s no telling what the stupid CPI will print, because of all the hedonic adjustments that are made to it before it gets ready for prime time…
To recap… The dollar bugs fought back on Monday, and the Dollar Index rose to 92.21 from 92.02… Gold & Silver lost ground on the day, as well as the euro which fell back under the 1.19 figure on the day. Chuck talks some more inflation today… And also talks about China being left off the list of currency manipulators, along with a batten down the hatches warning for rubles.. . And the overnight markets didn’t bring about any change, although the buying of dollars was muted so to speak…
Before I head to the Big Finish today, I just wanted to give a head’s up on something I will most likely be talking about tomorrow… Long time Reader Bob, sent me a link to a talk by Catherine Austin Fitts, who I like to listen to, and she’s going to be talking about “The Great Currency Reset”… I didn’t have the time to listen this morning, so that’s my charge for today!
For What It’s Worth… Well, it’s been a couple of weeks since I highlighted an article by Pam and Russ Martens of www.wallstreetonparade.com . They do such a great job of researching and digging into stuff that most journalists just forget about… Well, this article is about the Jerome Powell interview on 60 Minutes, and it can be found here: Fed Chair Jerome Powell Goes on 60 Minutes to Present a False Narrative on Mega Banks He Supervises Loaning Out their Balance Sheets to Hedge Funds (wallstreetonparade.com)
Or, here’s your snippet: “The CBS “investigative” program, 60 Minutes, gave Wall Street a pass again last night.
This time around 60 Minutes’ host Scott Pelley interviewed Federal Reserve Chairman Jerome Powell. The Fed, and by extension, Powell, are in charge of supervising the holding companies of the mega banks on Wall Street, including those involved just two weeks ago in loaning out their balance sheets to the tune of tens of billions of dollars to a hedge fund run by a man previously charged with insider trading and stock price manipulations. The man is Sung Kook (Bill) Hwang and the hedge fund is Archegos Capital Management. (Fed-supervised mega banks loaning out their balance sheets to hedge funds for nefarious purposes was previously exposed in 2014 in an in-depth report and hearing by the U.S. Senate’s Permanent Subcommittee on Investigations. The practice has clearly metastasized since that time.)
The 60 Minutes interview comes just two weeks after Archegos blew itself up, along with generating billions of dollars in losses at the mega banks that allowed it to take on obscene levels of leverage in a replay of the financial crisis of 2008 – something that the Fed has continuously assured Americans could not happen again under its oversight.
Rather than dig deep into the insidious rot of the Fed as a lapdog regulator, Pelley devoted just a brief and shallow part of the interview to the topic of what happened at Archegos. ” (failed hedge fund that’s been in the news)
Chuck again… OK, this is a very good article, and has a transcript of a question the interviewer asked Powell… Powell claims that “this incident doesn’t really raise questions about the stability of the financial system or of those institutions, which are mostly foreign banks.”
Yeah, what did I tell you yesterday, to get used to the Gov’t and Cartel selling you snake Oil? This is a hefty dose of snake oil folks…
Market Prices 4/13/2021: American Style: A$ .7601, kiwi .7021, C$ .7926, euro 1.1891, sterling 1.3723, Swiss $1.0812, European Style: rand 14.6323, krone 8.5581, SEK 8.5846, forint 301.97, zloty 3.8341, koruna 21.8667, RUB 76.36, yen 109.37, sing 1.3433, HKD 7.7736, INR 75.42, China 6.4889, peso 20.17, BRL 5.6877, Dollar Index 92.24, Oil $60.03, 10-year 1.68%, Silver $25.05, Platinum $1,173.00, Palladium $2,760.00, Copper $4.05, and Gold… $1,730.80
That’s it for today… and tomorrow… Yes, sorry about the short notice, but… no Pfennig tomorrow, as I have an appointment to see my heart doctor bright and early in the morning tomorrow. The last time I saw him he told me the good news that my heart function had improved from 60% to 85%… I would have to think that it’s gotten even better with my recent weight loss! We, here in the Midwest will be getting chilly days for the next 10 days! UGH! I want to go back to Florida, where it’s 80 and sunny! I sit around with a sweatshirt on all day and evening… Too darn chilly for me! Next week I go to see my oncologist, and then I’m finished with doctors for this month! It’s April, the weather is chilly, and we’ve got our pool open and ready to go… UGH! Same as last year, but last year was quite different, with the plandemic going on… That wound I received on my arm last Monday, is taking its sweet time healing. UGH! Mama’s Pride takes us to the finish line today with their song: Blue Mist… Mama’s Pride was a St. Louis band back in the day… And I always loved this song! I hope you have a Tom Terrific Tuesday today, and will be Good To Yourself! (remember! No Pfennig tomorrow!)
Chuck Butler