The Housing Bubble Comes To The Midwest…

July 6, 2021 

* currencies have been stuck in the mud… 

* Oil price spikes higher… 

Good day… And a Tom Terrific Tuesday to you!  Since this is the first Pfennig of July, Pfennig tradition calls for: There I was on a July morning, looking for love, with the strength of a new day dawning, And the beautiful sun….(Uriah Heep) What a marvelous weekend, weather wise, and good company, friends, family, and lots of sunshine… Normally this time of year, it’s so darn sweltering hot, steamy, humid, and unbearable outside, but not this year! Temps were warm, but not hot and a good time was had by all… the pain I’ve been dealing with in my head, is better… I had some bad days since we last talked, but I got through them, just like I’ve done with  all the other health obstacles that have been put down in front of me through the years!  I’m not bragging, I’ve been very lucky, and full of God’s grace…  My beloved Cardinals can’t hit their way out of a wet paper sack… Watching their futile attempts to hit have become very frustrating to me…  Oh well, there’s next year!  HA! I listened to Sirius XM’s top 400 Classic Rock songs this past weekend. I was surprised by the # 1 song… And that’s the song that greets me this morning, The Eagles, and their mega hit: Hotel California…

Well, it’s been a few days since I last talked to you… Not much has gone on in that time as most senior traders were heading to the Hamptons on Thursday to extend the holiday weekend.  One thing that did happen or didn’t happen is our friends (NOT!) at OPEC failed to announce production increases, and that caused a spike upward in the price of Oil… So more inflation coming our way in the form of higher gas prices…  And silly me, I was thinking a couple of months ago that with gas prices so low, I could get another gas guzzler! So glad I didn’t go with that idea!

Gold has stopped the bleeding, and has gotten back to moving upward, although it was still below $1,800, until the overnight trading last night…  Silver had a monster day on Friday, closing up 40-cents, but at one time on Friday it was up 61-cents… So, the paper traders are still hanging around, darned them! I had picked out a different word to use but decided to use darned…  Yesterday, while the charcoal was burning all over every neighborhood, and fireworks filled the night time sky, the rest of the world traded, and although the volume was very light, Gold closed up $ 4.30   to end the day at $1,792.60

Going through Twitter yesterday, I came across this tweet from Fred Hickey, who is an analyst… “Physical gold demand in China & now India (accounting for over half of physical purchases) have increased, swinging gold prices from discounts to the global gold price to premiums. Appears gold’s seasonal strong period has begun!”

I sure hope he’s right!  You know that the spot price of Gold isn’t anywhere near where a coil dealer would charge you for a Gold Coin….  The physical demand for Gold has been so strong, and that allows minters to charge an arm and leg for minting coins, and those prices are passed down the the consumer/ buyer…   There are no more discounts, folks… If you’ve procrastinated on buying Gold, then you’re out of luck… I’m just saying…  There’s Gold to be bought, but at some hefty prices…

The Currencies have been stuck in the mud since we last talked… For instance, on Wednesday last week the BBDXY (dollar index) was 1,140.75 during the day, and this morning the index is $1,140.37…   There’s just been no real data to trade from and by the time there was some (The jobs Jamboree), most senior traders were gone, leaving instructions to the junior trader to not take any long positions in his absence…  So, this week we should be getting back to normal volume and so on, with the currencies… the dollar had no right to be trading as high as it is… But it is… And makes me think that all currency traders have lost their collective minds…

In the overnight markets last night… There was still no movement in the currencies, but… Gold is rallying up $18.30 this morning, to bring the shiny metal back above $1,800…  And Silver is up 18-cents this morning, and Silver has put that line in the sand drawn at $26 in its rear view mirror…  The price of Oil slipped back below $76 this morning, after rising to $76 and change after the announcement or non announcement I talked about earlier. 

The good folks at GATA sent me this yesterday, that they pulled from Reuters: “Russia’s finance ministry said today it would buy 13.5 billion rubles ($184.25 million) worth of foreign currency a day between July 7 and Aug. 5, an increase in the amount of daily operations from the previous month.

The finance ministry said its regular foreign exchange and gold purchases on the market will total 296 billion rubles ($4.04 billion) over the next month.”

Chuck again… Hopefully that buying will keep Gold well bid, and the dollar down, as I’ve chronicled here previously, the Russians are anti dollar… so they won’t be buying dollars! Most likely euros and renminbi, but at this point we don’t really know.

Ok… more signs that a housing bubble is blowing in the wind, the St. Louis Post Dispatch reported that The average sales price of a single-family home in St. Louis and St. Louis County spiked to $324,061 in May, up 20% from that time last year. This is the Midwest folks… even in the the last housing bubble, housing didn’t get as out of touch with reality as the rest of the country did… So, this is HUGE news… When the housing bubble visits St. Louis, then we’ve got a full blown housing bubble…  I’m just saying… 

Well what have we here?  Seems that Venezuela is preparing to once again lop off zeroes from the national currency in an attempt to simplify daily transactions which sometimes barely fit on a calculator or require swiping cards multiple times to complete a purchase. 6 zeroes…. That’s what they are going to lop off their currency’s price!   Good friend Dennis Miller mentioned this the other day, and I said that it reminded me of Mexico in the 90’s when they moved their decimal point to beef up their currency…  Crazy 3rd world countries, that’s all I have to say about that!

Well, even though we’re back to working this week as a country, the data stream is still dry, with the FOMC Meeting Minutes the prize piece of data this week… UGH!   The markets will react ignorantly toward the minutes, as I’m sure they will contain some conversations about tapering and rate hikes, of which the markets will go crazy over…  I’m just telling you this now, so that when the dollar is being bought hand over fist on Wednesday afternoon, that you’ll know why… 

And then in about a week to ten days, all that euphoria will fade away, and the markets will be back to realizing that while there may be discussions about tapering and rate hikes, there is no proof that these will happen in the next year, and it’s then and only then that we get back to normal trading… 

To recap… the currencies have been stuck in the mud for over a week now, as most senior traders were off to the Hamptons for an extended holiday weekend. Gold & Silver are back on the rally tracks with small gains last week each day, and then a larger move in the overnight markets last night…  Fred Hickey tells us that physical Gold demand is strong, and the discounts are gone, and the GATA folks tell us that Russia is getting ready to back up the truck for Gold and currencies, which Chuck points out will not include dollars!

For What It’s Worth…  Ok, this is going to be a long one folks, because I truly believe that Dave Gonigam of the 5 Minute Forecast, put together  strong piece here that talks about Julian Assange, and with that I’ll just let Dave take it from here… 

This weekend, as we Americans celebrate whatever’s left of our freedom… an Australian man will spend his 50th birthday in a British lockup as an American political prisoner.

“In a divided Washington, few causes have as much bipartisan support as prosecuting WikiLeaks founder Julian Assange,” reported The Associated Press in late 2018.

That was when Assange was still holed up inside Ecuador’s embassy in London. Word had just emerged that the feds were prepared to bring charges against him under the Espionage Act of 1917. We rose to his defense in our virtual pages… and we recapitulate our case today.

Assange now rots in London’s high-security Belmarsh prison. Six months ago, a British judge rejected a U.S. request for extradition… but she denied Assange bail while the Justice Department appeals her ruling.

Meanwhile, you didn’t hear about it from any mainstream source… but only days ago, most of the government’s case against Assange fell to pieces. More about that later…

For now, we still need to set context… and so we return to that 2018 AP article, and the bipartisan bile: “Many Democrats seethed when the radical transparency activist humiliated Hillary Clinton by publishing the content of her campaign chairman’s inbox. Most Republicans haven’t forgiven Assange for his publication of U.S. military and intelligence secrets. Much of the American media establishment holds him in contempt as well.”

The American media establishment better watch its back: It risks taking itself down along with Assange. And that’s no cause for celebration, even if you hold the American media establishment in the contempt it frequently deserves.

For your editor, this is personal.

I’ve spent literally every working day of my adult life exercising the right to freedom of the press — a right bestowed by the Creator and secured by the First Amendment. That’s 20 years in broadcast news, 14 years and counting in financial publishing.

And yes, the activities we conduct in our trade are protected by the First Amendment — as you’ll soon see.

Our point today is that WikiLeaks too exercises the right to freedom of the press.

It was for this reason the Obama Justice Department opted not to pursue a case against Assange — much as it surely wanted to.

As The Washington Post reported in 2013, “If the Justice Department indicted Assange, it would also have to prosecute The New York Times and other news organizations and writers who published classified material, including The Washington Post and Britain’s Guardian newspaper.”

The Trump administration dispensed with those concerns. When he was CIA chief, Mike Pompeo declared, “We have to recognize that we can no longer allow Assange and his colleagues the latitude to use free speech values against us.”

To be clear, by “us” Pompeo meant the government. It’s the government against the people — and Assange has been on the side of the people, no matter which party occupies the White House or Congress.  

Little wonder Team Biden continues to pursue the case Team Trump began. For many Democrats, it’s pure revenge — as Glenn Greenwald wrote in 2018.

“Their emotional, personal contempt for Assange — due to their belief that he helped defeat Hillary Clinton: the gravest crime — easily outweighs any concerns about the threats posed to press freedoms by the Trump administration’s attempts to criminalize the publication of documents.”

People forget, but WikiLeaks has served as an essential source of information about how the economy and the markets really work — information that would have never come to light otherwise.”

Chuck Again…  Dave’s article goes longer, and you’ll have to visit the Agora website to read it all…. Yes, I realize that I’m just a small pimple on the rear end of the U.S .Government, but I do think that one day, should I still be telling the truth about what’s going on that some men in dark suits will show up at my door and take my laptop away…  That’s the world that I do believe we are heading to folks… Are you ready? 

Market Prices  7/6/2021: American Style: A$ .7569,  kiwi .7086,  C$ .8085, euro 1.1840, sterling 1.3857, Swiss $1.0831, European Style: rand 14.2263, krone 8.6257, SEK 8.5694, forint 298.24,  zloty 3.7946,   koruna 21.6264, RUB 73.35, yen 110.71, sing 1.3448, HKD 7.7664, INR 74.45, China 6.4621, peso 19.83, BRL 5.0683,  BBDXY 1,140.37, Dollar Index 92.36,  Oil $75.83, 10-year 1.42%, Silver $26.42, Platinum $1,112.00, Palladium $2,954.00, Copper $4.31, and Gold… $1,811.78

That’s it for today… I’m excited this morning, because little Evie is coming here for the day. Apparently she was sick yesterday and her parents can’t take her to day-care sick, so she comes here! I get to play with Evie today! YAHOO!  Talk about playing to the level of your competition… My Cardinals couldn’t beat the Pirates, the worst team in the division, but beat the Giants the best team in the NL!  Crazy baseball! The Olympics begin in a couple of weeks… And that brings me to a public service announcement… Chuck will begin his two week annual summer vacation on July 20th… There will be no Pfennig during those days, as I don’t even take my laptop with me! R.E.M. takes us to the finish line today with their song: The One I Love…  I hope you have a Tom Terrific Tuesday, and please… Be Good To Yourself!

Chuck Butler