The Fed’s Jackson Hole Boondoggle Takes Center Stage…

August 21, 2019

* Currencies are held in check by the dollar bugs once again!

* Will we finally see a markets manipulator go to jail? 

Good Day… And a Wonderful Wednesday to you!  What’s gotten into my beloved Cardinals? They’re playing like a real baseball team! Errors are down, base running snafus have gone away, the pitching is good, and the hitting is nascent… (I’ve said all along that this team can’t hit consistently) And they’re winning the close games…  What’s going on here? HA!  I got a late start today, so this is later than usual…  Hey! I’m retired! The Pousette-Dart Band greets me this morning with their song: Amnesia…  I hope that it’s only amnesia, believe me I’m sick but not insane! 

Well, Tuesday was much like Monday, which was much like Friday, and so on, for the currencies… The dollar bugs have a tight clamp on them…  There was some upward movement in a handful of currencies yesterday, but their gains were limited and held in check.  I don’t like having to write about no action to speak of, but what’s a bear to do when there’s no honey?  

Gold on the other hand has movement every day, sometimes it’s not on the right side of the ledger, but then volatility is what makes the grass grow green! And yesterday, Gold found a way to gain $11 on the day… But this morning it’s down $6 in early trading…   Remember when the price manipulators kept Gold below $1,300, and every time it blipped higher than the figure, they took it back down?  Well, it appears their new figure is $1,500…  I’m of the opinion that the physical demand is making the price manipulators with their short Gold (& Silver ) paper trades, just don’t have the effect on the metals like they used to…  

I saw a report last week where the writer was having a hissy fit over the fact that China had banned Gold imports. The writer was convinced that this meant that China was no longer adding Gold to their reserves, and that would be a bad thing for the price of Gold…  Well, Ahem…  let me clear my throat here, before I explain this…  China doesn’t need the imports… They produce tons of Gold each year, so they can continue to add to their reserves with their production…  What they do need are the dollars they hold to pay their dollar denominated debt… So, they made a wise decision to stop spending dollars on Gold imports…   No need to have a hissy fit, no need to run for the hills, because things in Gold (& Silver) are going to hell in a hand basket…  Just calm down…   

Furthermore, in Gold…  I just found a great piece on traders getting caught with their hands in the cookie jar, with commodities (that includes Gold & Silver) , so I’ll feature that in the FWIW section today… You won’t want to skip over that one! Spoiler alert… Someone’s finally going to jail!

Well, the Fed’s Jackson Hole Boondoggle begins today, and gets hot and heavy tomorrow…  The stock jockeys seem to be front running the Fed, right now, anticipating that the Boondoggle will bring them what they want to hear, and that’s confirmation that the Fed will be cutting rates at their next meeting in September.  I’m wondering why the dollar bugs seem to be ignoring what could be coming from the Jackson Hole Boondoggle…  

Publishing guru, and writer extraordinaire, Bill Bonner, had a very funny article yesterday, when he talked about how President Trump had said that What the Fed needs to do is to cut rates 100 Basis Points and get back in the Quantitative Easing business, for if the Fed did those things that all would be right in the world…   Bill Bonner took exception to that comment, and said, “Who knew? , Who knew that’s all we needed to do to save the world?”  I just chuckled my way through his sarcasm, and if you want to read it you can find it here:

In the Eurozone today, they’re dealing with some bad news from Italy… Let’s go to the tape… Italy’s Prime Minister Giuseppe Conte has resigned, plunging the country into fresh political turmoil.  Uh-oh!  I told you a week or so ago that Italy had shown up at the ECB’s door with a basket full of problems, and this is one of those problems…  Look, in the “old days” PM’s in Italy came and went like rashes… Remember Silvio Berlusconi?  He was in, he was out, he was in jail, and he was back in, and then out, and so on… So, in reality, the loss of a PM is not that big of a deal, except that Italy is no longer on its own, and it’s part of BIG family now, and these types of things really cause problems… 

A new PM in the UK, hasn’t brought about any progress in the BREXIT negotiations… They have no BREXIT deal… I saw where companies were stockpiling goods from the European Union countries, in the event they are shut down from being able to access those markets…  I find this all very unnecessary…  Get the BREXIT deal done, and move on!  For Heaven’s Sake, do it!

Today, the Big Deal is not Jackson Hole, but the Fed’s meeting minutes from their last meeting where they reversed their rate cycle with a rate cut…  I think the markets are willing to accept that the meeting minutes not have what they are looking for, but are holding out hope that they can get a double dose of rate cut talk, from both the minutes and the Jackson Hole Boondoggle…  

What happens if they are disappointed? Oh, Heaven I don’t want to think about that! In fact, I’m in agreement with the stock jockeys here that the Fed will give some very good hints of their rate cut position at the Jackson Hole Boondoggle…  

OK, well, like I said above, the Fed’s Meeting Minutes will print this afternoon, and along with Existing Home Sales here in the U.S. that’s all the U.S. Data Cupboard has for us today…  It’s been slim pickings in the Data Cupboard so far this week, and the rest of the week doesn’t look that exciting with the Flash Markit ISM (manufacturing index) to print tomorrow, along with Leading Indicators and that’s it!  

So, it’s all about Jackson Hole this week…  UGH!

To recap… it was another day just like the previous days with the dollar bugs keeping the currencies clamped down, and any gains VS the dollar are limited to keep them in check… But the lack of volatility in currencies is made up for in the pricing in Gold… Gold gained $11 yesterday, but is down $6 in early trading today…  The Fed’s Jackson Hole Boondoggle gets going today… Chuck talks about how the stock jockeys seem to be front running the Fed… Hmmm….

For What It’s Worth… OK, I told you above that I had this article about Price Manipulators getting caught, and so with no further adieu… You can find it here:

Or, here’s your snippet: “There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to “provide liquidity”, when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take “complicated” financial concepts at the face value set by a self-serving establishment, never dared to question anything.

All that changed last November when a former JPMorgan precious-metals trader admitted he engaged in a six-year spoofing scheme that defrauded investors in gold, silver, platinum, and palladium futures contracts. John Edmonds, then 36, pled guilty under seal in the District of Connecticut to commodities fraud, conspiracy to commit wire fraud, commodities price manipulation, and spoofing. As FBI Assistant Director in Charge Sweeney explained that “with his guilty plea, Edmonds admitted he intended to introduce materially false and misleading information into the commodities markets.”

“The Criminal Division is committed to prosecuting those who undermine the investing public’s trust in the integrity of our commodities markets through spoofing or any other illegal conduct.”
“By conspiring with his trading partners to place spoof orders, he blatantly attempted to profit off of an unfair market that he helped create. The FBI will continue to work with our partners to insure financial markets remain a level playing field for all investors.”

Then, one month ago, Corey Flaum, who worked as a trader at Bear Stearns and Bank of Nova Scotia, also admitted to precious metals manipulation, saying he placed thousands of bogus orders for futures contracts over a nine-year period.

Now it’s #3.

Christiaan Trunz, another former JPMorgan metals trader, pleaded guilty on Tuesday to conspiracy and to manipulating prices in the precious-metals market as part of the U.S. government’s continuing crackdown on bogus spoofing trades. 

Trunz, 34, admitted during a hearing in federal court in Brooklyn, New York, that he also used spoofing to manipulate precious metal prices and to extract a profit while he worked at Bear Stearns and at JPMorgan between 2007 to 2016. He pleaded guilty to in connection with a specific spoofing incident in June 2016.

While Trunz could face a maximum prison term of as long as 135 months when U.S. District Judge Pamela Chen sentences him in February, he will likely get away with a fine and a warning never to rig the precious metals market again.”

Chuck Again…  Oh, all those years, that I kept getting told to stop talking about Price manipulation because it wasn’t real…  I wish I were still there to show them this… No wait… I don’t wish that either! I’m just happy as a lark here where I am! 

Currencies today 8/21/19 American Style: A$.6795, kiwi .6415, C$ .7521, euro 1.1105, sterling 1.2141, Swiss $.9792, European Style: rand 15.2040, krone 8.9401, SEK 9.6402, forint 294.70, zloty 3.8155, koruna 23.2240, RUB 66.67, yen 106.46, sing 1.3828, HKD 7.8414, INR 71.50, China 7.0565, peso 19.69, BRL 4.0588, Dollar Index 98.17, Oil $56.82, 10-year 1.58%, Silver $17.09, Platinum $846.82, Palladium $1,491.01, and Gold… $1,500.46

That’s it for today…  I just found out that I have a doctor’s appt very early on Monday, so there won’t be a Pfennig on Monday….  OK, this just got to be much later today, because I just received a call from a friend in Switzerland, Rob Vrijhof, called to chat about the world, and markets. He calls me about once a quarter, and we solve the problems of the world!  So, I’m back now, and will get this out the door immediately! The Righteous Brothers take us to the finish line today with their song: Soul & Inspiration…   I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler