February 25, 2021
* Currencies have another nothing day on Wednesday
* Gold stages a huge comeback on Wed. & will have to do another today…
Good Day… And a Tub Thumpin’ Thursday to you! It’s been quite a week for yours truly, and I’ll finish it with a bang, as I’m grilling steak tonight for a dinner with friends, and then tomorrow friends from St. Louis will be arriving… An old drinking buddy, Gus and his beautiful bride will be with us for a few days, which includes going to the baseball games… I was going down some steps yesterday, and noticed a sharp pain in my right knee… when I got to the deck I looked down and my knee was swollen big time! I has surgery on that knee about 18 years ago… I’m hoping that’s not required once again! One of my fave Steely Dan songs greets me this morning.. The song? FM… “Give her some funked up muzak, she treats you nice… Feed her some hungry reggae, she’ll love you twice”
Well, Wednesday was another nothing day for the currencies… The Dollar Index was 90.10 yesterday morning, and at the end of the day it was 90.11… That marked two consecutive days when currency traders couldn’t decide which way to go with the dollar… Like I’ve said before, I know that in their heart of hearts the currency traders want to sell dollars… But are fearful of the PPT ruining their positions…
Gold traded down immediately yesterday, and at one point in the day it was down $17… But… at the end of the day it only down $1.70, to close at $1,805.80, completing a nice strong comeback for the day… Silver was in positive territory from the get-go yesterday, and ended up 30-cents to close at $28.05… I have to say that there are so many pundits out there singing the praises of Silver, that their singing alone should be enough oomph Silver would need to move higher in price VS the dollar..
In the overnight markets… the dollar has gotten ambushed! The Dollar Index is 89.80, down form 90.11 at the close yesterday. I want to point out that the two currencies that outperformed all other currencies in the last weak dollar trend, The Aussie dollar (A$) and New Zealand dollar (kiwi) are doing it again… These two currencies have been very stealthlike, but not to me! I see what you’re doing… for I see all! HAHAHAHA!
Gold, on the other hand is not participating in the ambush on the dollar overnight. In the early trading this morning Gold is down $19… Why? Because that’s what the price manipulators deem Gold to be… So, will Gold stage another comeback today? Now THAT would be something, wouldn’t it? We can only hope… Silver is basically flat this morning as it is down 2-cents, so basically flat in my book…
The price of Oil has climbed another buck and this morning trades with a $63 handle… And Treasuries got whacked good yesterday, with the yield on the 10-year Treasury rising to 1.44%… (remember in bonds, as the yield rises the price of the bond goes down) The Bond Boys keep throwing us bones (hints) and the markets are ignoring them…
Maybe it’s built up frustration by the currency traders overseas last night, as they’ve been wanting to sell dollars badly, and just decided to hell with it and go for it!
OK… well, longtime readers will recall me going the full nine yards a few months ago, when I talked about what I saw coming for the U.S. citizens… Spoiler alert for those that don’t recall or are new to class… I talked about the folding currency/ dollar, being replaced by digits… And everything you buy, sell or steal, would be on record, and eventually someone in power would be dictating to you how to spend your money, and could get so bad that they deny the withdrawal of the digits to pay for something that you want… I know, I know, I’ll take my tin foil hat off now…
Or… maybe I won’t… Yesterday, Cartel, I mean Fed Chairman, Powell talked to Congress, and well, I’ll let the Business Insider tell you the rest. “Federal Reserve Chairman Jerome Powell told Congress on Tuesday that the Fed is “looking carefully” at whether it should issue a digital US dollar.”
“A digital currency developed by the fed is a “high priority project for us,” Powell told Congress, but he added that there are “significant technical and policy questions” related to a digital US dollar.”
“We are committed to solving the technology problems, and consulting very broadly with the public and very transparently with all interested constituencies as to whether we should do this,” Powell said.”
Chuck again… Ok, remember earlier this week when I offered to be a writer for Janet Yellen and finished her statement? Well, here I am, ready, willing and able to do the same for Mr. Powell… So here goes… “ basically we don’t care what the constituencies say, we’re going ahead with this digital currency, so you all had better get ready for the digits to show up in your bank account one day in the near future… “
I don’t know about you, but I’m the kind of person that absolutely loves having a pocket full of folding currency / dollars… I started my first job while I was in 7th grade… I went door to door selling subscriptions to the now defunct Globe Democrat newspaper… I was so good at it, I won a trip to Daytona Beach all expenses paid! Any way… what I was getting at, was at an early age, I leaned about having money in my pocket, and I’ve held that thing of having money in my pocket in my mind ever since… And I will be so lost when the day comes that we no longer can have folding currency/ dollars in my pocket…
And I don’t believe it will do you any good, to bury some folding currency / dollars, in your back yard, or stuff them in coffee cans… That is unless there’s a black market that deals in folding currency…
Did you know that China’s version of a digital currency has already been tested in 3 different Chinese markets/ cities? Well, it has and I would think that the Chinese will be ready to issue it nationally soon… Nearly every Central Bank in the World is working on or have already worked on the development of a digital currency… So for now, I’ll keep my tin foil hat on top of my bald head!
OK, let’s talk about something else as that discussion was really depressing me… Let’s talk about Going Big… There’s a new TV show called the Go Big Show and I’m wondering if Treasury Sec. Janet Yellen is auditioning for the show? Let’s listen in to here latest thoughts…
“Janet Yellen, the economist picked by Joe Biden to run the US Treasury, has said America needs to “act big” to revive its flagging economy and protect itself against long-term scarring with a major stimulus package.”
Chuck again… Yeah, let’s just keep going bigger all the time, Janet… That is until you cause hyperinflation that wrecks the remaining value of the dollar!
It’s all a mystery to me, how traders can hear this stuff, and that stuff about stimmy checks, and the daily reminders of the rot on the economy’s vine, and not sell dollars until the cows come home! What on earth are they waiting for? Are they waiting for confirmation that hyperinflation is among us? You know, we may not ever really reach the 50% inflation rate rise in one month, that would qualify as hyperinflation, but what difference would it make if we only got to 35%?
Just for grins… In 1919 the German mark was 48 marks per dollar, and inflation was rising rapidly, six month later the mark traded at 320 marks per dollar… And with inflation rapidly increasing, the mark fell to 7,400 marks per dollar by Dec. 1922… And the cost-of-living index, for Germany was 41 in June 1922 and 685 in December, a nearly 17-fold increase.
The strategy that Germany had been using to pay war reparations was the mass printing of bank notes to buy foreign currency, which was then used to pay reparations, but this strategy greatly exacerbated the inflation of the paper mark.. Sound familiar?
And the key here is that there is no Ronald Reagan and Paul Volcker to fight the rising inflation this time… All we have are some knuckleheads who think that you just print your problems away… Inflation will weaken a currency, strong inflation will hurt a currency, and hyperinflation will render the currency worthless… As it did in Germany 100 years ago…
The U.S. Data Cupboard will finally get its act together, and have some real economic data for us to view today, starting with, The Weekly Initial Jobless Claims for last week… The thing to keep in mind here is that last week was one day shorter due to the holiday on Monday, so the numbers might be lower, but you’ll know why… In addition to the jobless claims, we’ll also see the color of January Durable Goods and Capital Goods Orders… And finally today, there will be a 1st revision of 4th QTR GDP…. Remember what I told you when the original GDP figure of 4% showed up… That if you took out Government spending, the number would be very low…
I used to have friendly arguments with an economics professor who would explain that when consumer spending weakens, the Gov’t’ spending needs to ramp up to fill the void… And I would argue, why does the Gov’t spending need to be a part of GDP? Even more so now it gets ridiculous with all gov’t’s printing presses working overtime, and their new Magic Money Tree, they could make GDP be whatever number they wished for! Want 10% GDP? Well, it will be gotten in the future, if those in power begin to use the Magic Money Tree like an ATM… I’m just saying…
To recap… it was another nothing day for the currencies, and Chuck still believes that traders want to sell dollars, but are afraid of the PPT… Gold had a nice comeback on Wednesday, after falling by $17 it ended the day only down $1.70… Silver climbed back above the $28 handle… In the overnight markets the dollar has gotten ambushed, and the Dollar Index is trading this morning at 89.80… And there was no data to speak of Wednesday, with Jerome Powell telling Congress about the digital currency the Cartel, I mean the Fed heads are working on… And Chuck gives us something to think about regarding inflation…
For What’ It’s Worth…. Well, I’ve been talking about Russia’s desire to dedollarize and how they’ve recruited China to join them for some time, but this morning I found this on Bloomberg.com and it stuck out like a man with a hatchet in his forehead, that this should be today’s FWIW… And so it is.. And it can be found here: Russia Must ‘Barricade’ Itself Vs. Dollar, Senior Diplomat Says – Bloomberg
Or, here’s your snippet: “Russia must take urgent steps to cut its use of the dollar to a minimum as the new U.S. administration of Joe Biden signals it will ramp up sanctions, a top diplomat said.
“We need to barricade ourselves against the U.S. financial and economic system to eliminate dependence on this toxic source of permanent hostile actions,” Deputy Foreign Minister Sergei Ryabkov said in an interview today in Moscow. “We need to cut back the role of the dollar in any operations.”
Russia is bracing itself for the latest U.S. punitive measures over the nerve-agent poisoning and imprisonment of opposition leader Alexey Navalny. In a speech to the Munich security conference last week, Biden said that addressing “Russian recklessness and hacking into computer networks in the United States and across Europe and the world has become critical to protecting our collective security.”
The U.S. has imposed more than 90 rounds of sanctions in recent years targeting state banks and corporations, the oil and gas sector, top officials, and business tycoons and is likely to add more restrictive measures, Ryabkov said.
Chuck Again… I have an idea for you Mr. Deputy Foreign Minister, please whisper in Mr. Putin’s ear that he should be using the selling of dollars to buy more physical Gold…
Market Prices 2/25/21: American Style: A$ .7984, kiwi .7455, C$ .8013, euro 1.2232, sterling 1.4149, Swiss $1.1035, European Style: rand 14.7578, krone 8.3423, SEK 8.2217, forint 294.30, zloty 3.6870, koruna 21.3299, RUB 73.74, yen 106.12, sing 1.3181, HKD 7.7539, INR 72.49, China 6.4547, peso 20.65, BRL 5.4281, Dollar Index 89.80, Oil $63.42, 10-year 1.44%, Silver $28.03, Platinum $1,255.00, Palladium $2,454.00, Copper $4.19, and Gold… $1,786.80
That’s it for today and this week… It’s a froggy morning here, but a truly expect it to burn off soon to reveal another beautiful day… So, spring training games will begin this weekend! I really don’t like the new way tickets are dispersed. They show up on your smart phone, no more saving ticket stubs from memorable games! And, I’m not even your last choice for a tech-savvy person, so there’s that… The great Al Stewart takes us to the finish line this morning with his song: The Year of The Cat… I just love the melodic music that he plays… Ok… I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow, and will promise to Be Good To Yourself all weekend long!
Chuck Butler