The Dollar Bugs Retreat Further….

September 29, 2020

* The overnight markets sell dollars! 

* What up with the weakne

Good Day…  And a Tom Terrific Tuesday to you! Well, I tried something new for today… I got an instacart app, ordered our groceries and today I go pick them up, and they’ll bring them out to the car! No more having to walk around a grocery store with a face mask on….  ( I always had the feeling that they were going to arrest me with my mask on!) But no more! I could have them delivered to me, but I need to get out and drive my car a bit more, as I’m now getting 1 month to a gallon of gas! Tomorrow will be a busy day for me, as I go to the eye doctor to get a new prescription for my one eye… I ask them every year why the bill for such procedure isn’t cut in half, since they only have to deal with one eye, and they always look at me like a deer in headlights… and  then I need to get ready, as my beloved Cardinals begin their playoff series with the Padres…. Man did it turn cooler yesterday, I wore my Blues hoodie all day and evening… And the wind last night was taking no prisoners…. UGH!  Graham Nash greets me this morning with his song: I Used To Be A King…   (I relate that song’s lyrics somewhat!, not that I was once a King, but… I was somebody… I’m just saying)

Well… The reason I went into that bit of depressing stuff was I read an article last night in Grant Williams’ Things That Make You Go Hmmm, and it was about as people, especially men, get older they lose that feeling of relevance, and that takes them down a deep rabbit hole that most do not come out of….  But I am STILL somebody, I’m my wife’s husband, my kids’ dad, my grandkids, General, and so on… And I have thousands of dear Pfennig Readers too!  So, I haven’t lost that feeling of being relevant… yet…

OK… Well, I told you yesterday that the dollar bugs had backed off their assault on the currencies and metals, and that was quite evident in Gold & Silver… Gold closed up $20 on the day, at $1,881.20, and Silver closed up 71 cents to $23.71…  The currencies held their ground, and some moved positively VS the dollar, but the moves were very small… But at least they held their gains from late last week…. Which is saying a lot, given the PPT is like the wolf, and is always at the door….  The PPT’s knocking on the door… Do Not open the door and let ‘em in!  (a play on the Paul McCartney song) 

In the overnight and early morning trading the dollar bugs have retreated even more. Gold is up a buck or two, and the euro is back above 1.17…  It’s a watered down version of the trading pattern we witnessed a few weeks ago, where the overnight markets sold dollars, and the U.S. markets bought dollars…  There are just so many articles out there, folks, that are talking about a collapse of the dollar is coming…  

But who said that first? Yes, they’re all jumping on my bandwagon, let’s hope that bandwagon doesn’t lose a wheel, eh?  Even the former head of economics at Morgan Stanley, Stephen Roach, is now on the bandwagon, and when he joined, it gave me a feeling of vindication for my thought… 

So, what’s up with the Russian ruble being so weak these days?  Well, according to an article on the Russian Times website,  the weakness can be attributed to the rise of coronavirus cases in the country. Negative investor sentiment and low oil prices, which were down in morning trading amid concerns over the possibility of new coronavirus restrictions, also affected the ruble exchange rate.

Last week, the Ministry of Economic Development said the ruble had weakened due to temporary factors, such as rising geopolitical strife and other risks felt by the financial markets.  But then they also said that they expected the ruble to rebound and average a price of 71.2 rubles to the dollar. It currently is at its lowest price of 78.71 since April of this year, when the Oil price plummeted….

So, all you ruble holders, don’t despair… We’ve seen these weak spots for the ruble before, and it has always rebounded nicely… And I fully expect to see a rebound here in due time… 

Well, what have we here?  New Zealand recorded its largest trade surplus since 2014 this month… Now normally that would be cause for celebration, but… because of the pandemic closing the economy down, this cause of celebration has been cancelled, because, it’s all about the pandemic… I’ve gone through this before for one of my fave countries… New Zealand is an Islands nation, and therefore besides, wool, lumber and dairy, they have to import just about everything, and that puts a strain on their current account, and in the past when New Zealand would post a trade surplus, it would mean that the demand for wool, lumber and dairy had exceeded expectations. And THAT my friends, would cause for celebration!

I do understand that this trade surplus was helped by a rash of dairy order deliveries, so one out of 3 ain’t bad… Shoot Rudy, 1 out 3 will put in baseball’s hall of fame!….  I’m just saying…

The U.S. Data Cupboard has the Case/Shiller Home Price Index for August to print today, along with the stupid Consumer Confidence report for September….  In August the Consumer Confidence Index rose to 89 from 84 the previous month… But I’m pretty sure that given the poor performance of the stock market in recent weeks that this index number will be weaker for September… But then it should be very weak, in my opinion… But don’t let that get in the way of a good time, eh?

There will also be 4 more different Fed Head speeches today, with Fed Heads Williams and Clarida doubling up to make two different speeches, for a total of 6 collective speeches today… I doubt that any of them say anything to upset the applecart, but…. If I were there I would ask them, “just what’s up with your backing off buying Corp Bonds and ETF’s?”  But I’m not there….

I have a funny story for you… Quite a few years ago now, I was invited to a breakfast meeting with St. Louis Fed President, James Bullard the featured speaker, with a  Q&A session following… I woke up that morning with laryngitis and couldn’t ask him any questions!  Chris Gaffney and Frank Trotter thought it was very funny…. I of course did NOT!

The Eurozone will also print their version of a Consumer Confidence report today, and I’ll betcha dollar to a Krispy Kreme that theirs is weaker! They’ll also see indexes on Services Confidence, Business sentiment and Economic outlook…  So, the whole shootin’ match in one morning’s data prints, sure sound like the way to do it to me!

To recap… The dollar bugs remained on the sidelines again on Monday, and the currencies inched higher while Gold gained $20 and Silver 71-cents….  OMG! Did I ever make an error in yesterday’s Pfennig, saying that Silver closed at 23-cents… instead of $23.00! What a dolt! And only one reader caught it…. Or maybe you’re just tired of highlighting my fat finger errors…. The overnight markets were….

Before I head to the Big Finish today…. So, project Veritas has found voter harvesting in Minnesota….  I just knew that this mail in votes thing was going to get really ugly, and it’s already starting….  I’ve absentee voted several times in my life but never for a Presidential election… That’s a day I like to go and see the ilk of the people that are there to vote…. 4 years ago, I bumped in a neighbor while getting ready to vote, and she said, “I guess we’re here to cancel each other’s votes”….  I couldn’t have agreed with her more! 

For What It’s Worth….  I find this news to be somewhat bad… Of course I don’t know what shape the world will be in 15 years, but this is an article about the California Gov. who signed a law that prohibits the sale of gas fueled vehicles by 2035, and it can be found here:

Or, here’s your snippet: “In a ludicrous move against climate change on Wednesday, California Gov. Gavin Newsom (D) signed an executive order that will prohibit car companies from selling cars and passengers trucks that produce emissions after the year 2035. The order, which is a transparent attempt on Newsom’s part to set himself up for a presidential run down the line, was touted as a move to help California to move closer to its stated “Greenhouse Gas Emissions” goals.

“This is the most impactful step our state can take to fight climate change,” said Newsom. “For too many decades, we have allowed cars to pollute the air that our children and families breathe. Californians shouldn’t have to worry if our cars are giving our kids asthma. Our cars shouldn’t make wildfires worse – and create more days filled with smoky air. Cars shouldn’t melt glaciers or raise sea levels threatening our cherished beaches and coastlines.”

At a press conference announcing the order, Newsom encouraged other states to follow California’s lead. But while Newsom was busy worrying about turning himself into America’s Grand Leader on Climate Change, there were some within his own party who wondered how the state’s non-rich residents could possibly afford to make the switch.

“The EV’s pictured in today’s signing of the EO cost more than $50k each,” tweeted Assemblyman Jim Cooper. “How will my constituents afford an EV? They can’t. They currently drive 11-year-old vehicles. This doesn’t even take into account the strain an all-electric vehicle fleet will have on our state electric grid.”

As of last year, only 6% of vehicles sold in California meet the standards set by the governor in his order.

Even so, Newsom’s office insisted that fifteen years would be enough time for things to change.”

Chuck Again… Yeah, in 15 years, we may well have figured out that the we all didn’t die from climate change, and then what happens?  I’m just saying…

Market  prices 9/29/20: American Style: A$ .7133, kiwi .6595, C$ .7477, euro 1.1703, sterling 1.2866, Swiss $1.0842, European Style: rand 16.9535, krone 9.4415, SEK 8.9905,  forint 312.05,  zloty 3.8739,   koruna 23.18235, RUB 78.71, yen 105.62, sing 1.3684, HKD 7.7498, INR 73.72, China 6.8149, peso 22.19, BRL 5.5895,  Dollar Index 94.05,   Oil $40.57,  10-year .65%, Silver $23.78, Platinum $874.00, Palladium $2,170.00, and Gold… $1,884.50

That’s it for today…  I was looking over all the pictures I have on my wall that’s the backdrop for my writing desk, and one of them is hilarious! Years ago, at EverBank, we used to sponsor this matchbox car race, and the folks on the desk would dress up as a group to see if we could win a prize for that, because our car entry was always a dud… One year, the folks on the desk decided to dress at the Flintstones…  And they did win! And the picture of them is hilarious!  I received fantabulous news from good friend Dennis Miller last week… He is cancer free!  His latest Pet Scan showed no sign of cancer…  Give thanks and praise to the Lord (Bob Marley)  Last week, Dennis’ weekly letter, which can be found here: : He interviewed me! I really let loose in the interview too, so check it out and sign up for his letter if that floats your boat!  The Moody Blues take us to the finish line today with their song: I’m Just A Singer (In a Rock & Roll Band) …  I used to identify with that song!   And with that, I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler