Today Is An FOMC Day!

September 16, 2020

* Currencies and metals lose their early morning gains

* The overnight markets keep selling dollars… 

Good Day… And a Wonderful Wednesday to you! Man! Was that ever a nasty, ugly game last night for my beloved Cardinals… They not only took one on the chin, they also suffered major body shots, that will probably keep them from winning for a couple of days….  And once again in a time of need, they’ll hand the ball to 39 year old Adam Wainwright…. He has already saved their bacon from being fried a couple time this year. I sure hope he still has “it” today….  It was downright chilly outside last night, so I had to get my Blues hoodie out… I had to cover my bald head, that’s the first thing to get cold! I read last night that Judy Shelton doesn’t have the votes to get her on the Fed Reserve Board…. UGH!… But maybe that’s a good thing, in that she won’t be brainwashed by the other Fed heads, like Big Al Greenspan was… You may recall that Greenspan was a Gold Bug before the Fed… But that changed once he was the Fed Chairman…   The Classic IV greet me this morning with their song: Spooky… I used to play that on my guitar, and the Atlanta Rhythm Section also does a unique version of the song….

OK, the two days of the currencies inching higher came to an abrupt halt yesterday, as someone was buying dollars by the trunk full…   You know me, I believe it was the PPT, once again saving the dollar from falling off a cliff….   The dollar is going to hit dead man’s curve sooner or later, and when they do, it’ll be all she wrote, and the PPT would be downright stupid to step in front of the bus that’s running away with the likes of the euro, krone, ruble, and others….

Gold couldn’t hold its early morning gain of $15, and ended up losing $2.60 to close at 1,953.00… Silver did hold onto 2-cents of its early morning gain to close at $27.12…  I know that yesterday morning I told you that both of these metals were higher in the early trading, but they couldn’t hold those gains, and the dollar buying also spooked the metals traders…. And now we’re onto today, and the early trading doesn’t look promising for the metals… 

In the overnight and early morning markets, both the currencies and metals have climbed back on the rally horse, and are back to pushing higher this morning… Gold is up $16 and Silver is up 25-cents…  And the euro is moving higher again…  The overnight markets are trying to tell the world that the dollar is overvalued and needs to get sold, but the PPT has other designs… 

And there’s one thing I one to point out this morning and that is that since the dollar rallied strongly in March, it has lost 10% in the Dollar Index… So, maybe, just maybe, cause you never know, Chuck was right when he called for the new weak dollar trend to begin a couple of months ago! 

So… Don’t forget that the Fed is meeting and the meeting will conclude this afternoon with an announcement (read no change) , and followed up by a press conference with Fed Chairman Jerome Powell…  I’m so frustrated with the Fed and their actions… I don’t know why people haven’t been showing up in front of the Eccles building with pitchforks and shovels! Don’t they see what the Fed is doing isn’t right?  Apparently not…. 

But rather than having to hear me go on and on about the Fed, I’ve got David Rosenberg on his Twitter feed… Take it away Rosie! “So the Fed is pursuing a new inflationary strategy even though inflation is a tax on wages & real purchasing power for households. Oh, but it leads to negative real interest rates, a boon to equity investors & stimulates borrowing in an economy already up to its eyeballs in debt.” – David Rosenberg on Twitter

OK, I’m back…  A couple of weeks ago I talked about how analysts were saying the Aussie dollar (A$) would reach 74-cents next year… Well, I guess they’ll have to take back those prognostications because….   This news, from the good folks at GATA, says the Reserve Bank of Australia (RBA) “concedes a weaker dollar would help the economy recover from its historic COVID-19 recession, breaking its silence to agree with the blue-chip companies that warn of exchange rate pain.

The central bank’s comments, revealed in the minutes of its September policy decision, came a day after Macquarie Group flagged that its first-half result would drop sharply partly because of the stronger Australian dollar.”

See? That’s the problem with Central Banks…  ( I mean they have many problems but this is the one I’m talking about now) They say they’ll be silent when it comes to exchange rate pain by Corporations, and then they say the stuff they said above….  The same goes for our Fed Reserve, who said that they were going to be more transparent, and then they aren’t… Darn Central Banks, I say we kill ‘em, I say we hang them then we kill ‘em, I say (in my best Pee Wee Herman voice) let ‘em go….  HA!

OK, I don’t mean any harm to any Central Bankers, but then I don’t want anyone to think that I’ve gone soft on them….  They rankle my feathers, they get stuck in my craw, they give me a bad rash, and so on….

The price of Oil sure has rebounded this week and is trading at $39.12 this morning…  Just last week it appeared that Oil had no friends, and no demand for the commodity, but…. was the selling of Oil overdone? Could have been and that’s why it has rebounded so nicely this week…  

This rebound in the price of Oil has helped the Petrol Currencies to rebound too… The Norwegian krone, Brazilian real, Canadian loonie, Mexican peso, and we can’t forget the leader of the band, the Russian ruble… have all moved positively this week VS the dollar… 

Yesterday, I told you that there would be 3 reports for the year 2019 that printed. In all three the numbers showed a great improvement for individuals going into 2020… Of course we all know that 2020 has laid bare that wire that connected individuals from gaining ground…  but just for grins here are the results of the reports….  Median Household Income rose by more an $4,000 to $68,703…  And the Poverty level shrank to 11.7% from 12.8%, and the Uninsured Rate dropped to 8% from 8.5%… Now these are all numbers that a President should be crowing about, but with the pandemic probably destroying these numbers, it sure does take the wind out of the President’s sails now doesn’t it?

The current U.S. Data Cupboard had August prints of Industrial Production, and Capacity Utilization, and both showed what has been going on here in the U.S. with opening and closing and rinse and repeat of businesses….  Industrial Production only showed a gain of .4% VS 3.5% in July, and Capacity Utilization slipped to 70.9% in August VS 71.1% in July…  That just about tells you everything you need to know about the state of the economy / businesses in the U.S.    One month strong, as everyone opened up again and the next month weak, as many of those businesses had to close once again…

We, as a country need some guidance that’s not biased toward the company that you are an investor in having the cure-all for the pandemic…. And I think we’ll begin to get that with this new doctor, Atlas, that’s in charge…  But the states have their own agendas, and that’s a problem that has existed since the original 13 colonies….  But it’s how it should be…. I’m just saying…

Today in the Data Cupboard we’ll see the August print of Retail Sales…. And here I believe we’ll see the same results as yesterday’s data, and that is that while the Retail Sales data will be fair, it won’t be as strong as it was in July….  And we should have had back-to-school sales in there…. The BHI is indicating to me that Retail Sales will be fair…. Probably .5 or .6% VS the 1.2% gain in July…

And finally today will be the Fed’s FOMC meeting, and press conference…  I can’t imagine that the Fed would be ready to shock the markets, so they’ll keep things status quo, with low rates, probably as far as you can imagine the would remain low…. And they’ll talk more about their framework for creating inflation…  They sure would love to the cog in the machine that jump starts the economy, but unless they start pulling rabbits out of their collective hats, that’s not going to happen….  I do believe that this is the last meeting before the general election 11/3/2020….  The Fed heads will tell you that they are political and then I could tell you that the Pope isn’t Catholic!  You shouldn’t believe either one!

To recap…. The currencies and metals big moves this week were brought to an abrupt halt yesterday, and it all smells like, walks like, and quacks like the PPT, was buying dollars once again to keep the dollar from going for a ride on the slippery slope….  The Fed meets today, and Chuck doesn’t think there will be much come of it that we don’t already know…. Low rates and a need to ramp up inflation, and on the side they would like to stimulate the economy…. Fat Chance of that happening!  And from the looks of 3 reports for 2019, things were looking up for individuals… But then along came a pandemic and sat down beside us….

For What It’s Worth…  I found this article on and it talks about how the pain from the COVID is becoming worse in the economy, and when I saw that headline I knew it was FWIW worthy! The article can be found in its entirety here: 

Or, here’s your snippet: “New findings from a survey by the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health, published by NPR News on Wednesday, reveal low-income minority households have experienced the most financial hardships in the virus-induced recession.  

The pandemic heavily impacted Black and Latino households across America’s four largest cities (New York, Los Angeles, Chicago, and Houston) with massive job loss or reduction in hourly wages or a decline in working hours. 

The survey, conducted from July 1 through Aug. 3, found Latino households (77%) and Black households (81%) in the Greater Houston area incurred “serious” financial problems.  

As for the three other major cities, the survey showed 73% of Latinos in New York City experienced severe financial hardships, 71% of Latinos in Los Angeles, and 63% in Chicago. Black households in New York City (62%), Los Angeles (52%), and Chicago (69%) also reported severe financial distress because of the downturn.   

The survey found a majority of low-income minority households had their savings wiped out, which is similar to our recent report detailing how tens of millions of Americans depleted emergency savings this year.”

Chuck Again…  You really don’t like to see savings wiped out because that puts the family in peril… One more thing, a broken down car, a new furnace, whatever, could put them over the edge…  For putting food on the table for families is the number 1 task, and with no savings… Uh-Oh… 

And that will all spill over to the ever slowing economy…  I’m just saying.. 

Market  prices 9/16/20: American Style: A$ .7342,  kiwi .6753,  C$.7599, euro 1.1873, sterling 1.2988, Swiss $1.1037, European Style: rand 16.3080, krone 8.9738, SEK 8.7668,  forint 301.82,  zloty 3.7446,   koruna 22.5005, RUB 75.05, yen 105.05, sing 1.3569, HKD 7.7599, INR 73.48, China 6.7811, peso 21.01, BRL 5.2707,  Dollar Index 92.82,  Oil $39.12,  10-year .66%, Silver $27.48, Platinum $966.00, Palladium $2,416.00, and Gold… $1,969.00

That’s it for today…  A real slow day for yours truly yesterday, as the day seemed to drag on and on…. I did get outside in the sun to read for about 2 hours yesterday, the sun is not as intense these days, and that’s a good thing for my reading in the sun!  Well, 18-3 sounds like a rout in a football game, but it was the final score of the baseball game last night…. I don’t recall a more ugly game in some time…. But the good thing about baseball is that you get to come back today, and try to forget last night…. It occurred to me on Sunday night that for the first time ever, here in the U.S. we have all the major sports playing and jockeying for TV time…. The U.S. Open starts tomorrow…  I’m having withdrawal pangs, not seeing my cuter than anything granddaughter, Evie May….  I don’t recall if I was this giddy about here being here, with my little d (Delaney Grace) when she was almost 1, I probably was, as she was the first grandchild…  Remember whe I told you that I wasn’t going to set an alarm any longer, and I would get up when I was ready?  Well today was one of those days that I slept past my usual time to wake up…  Oh well, no harm, no foul, right?  Edwin Starr takes us to the finish line today with his great song: Twenty Five Miles… What? You don’t know that one? YouTube it, you’ll love it! And with that I hope you have,  a Wonderful Wednesday, and will Be Good To Yourself!


Chuck Butler