Trade Talks Nearing An End…

March 4, 2019

* Currencies trade in tight ranges for a week!

* Gold stumbles, but Palladium runs with the ball! 

Good day… And a Marvelous Monday to you! Well, I’m back! I wasn’t ready to come back, but the calendar said 3/4 and I told you would return on 3/4, so here I am… Welcome to March too! One of my fave months, because prior to last year, March was the beginning of Spring Training… I heard that a deadly tornado ripped through Alabama this weekend… So sad, that Mother Nature, takes lives… ☹… Well, did you miss me? I sure had more fun than a barrel of monkeys… I watched 5 baseball games in 5 days with my friends, and 2 more over the weekend by myself… Apparently, back in St. Louis, a winter storm hit there this past weekend… It was sunny and 85 here… I’m just saying… My good friend Kevin (Webbie) asked to hear a Nilsson song this past week, and I forgot to play it for him, and guess what comes up as the song to greet me this morning is? Nilsson, sings his song: Without You…

Well, the old saying that the folks on the trading desk used to say, that “When Chuck’s away, the currencies rally” didn’t hold true… And much like all my securities licenses that will expire in June, because no one has picked them up for 2 years… The old saying will too be retired… The euro is basically trading in the same clothes as when I left 10 days ago… The Trade Negotiations to date, have gone nowhere, the President’s summit with the N. Korean leader went bust… The National Debt keeps rolling along at an unprecedented speed… And guess what’s coming up on the horizon?

The Debt Ceiling was passed this last Saturday, and it wasn’t scheduled to be passed, for a couple more months! When will the finger pointing and blame game begin?

I read on the RT this past weekend that Russia had posted a $212 Billion Trade Surplus for 2018… That’s right I said Trade Surplus! Both the Budget and the Current Account Surpluses are at record levels, folks… I don’t see how currency guys and girls can ignore that fact much longer… But I guess when the major media is blaming everything on Russia these days, it clouds the sunny skies shining over Russia right now…

China has a HUGE Trade Surplus, but has a Current Account Deficit… The Eurozone has a Trade Surplus, but a major Current Account Deficit, and here in the U.S. we have both sitting in the red, and have been for some time now…

I had a reader once ask me, why it seemed I was always negative about the dollar… And I think I responded that the U.S. has the largest economy in the world, and was supposed to keep the dollar strong, so that other countries that took them in didn’t have to worry about holding them. But we’ve done a p&p job of keeping the dollar strong through the years… And since the dollar was removed from the Gold standard in August 1971, the weak dollar trends have caused larger losses for the dollar’s value than the strong dollar trends have recovered…

We’re the U.S. of A! And we should not be dealing with debt ceilings, and $22 Trillion in national debt, and we should not have had years of corp. corruption, and Politics that that can’t seem to agree on the time of day! And there’s so much more than I can even shake a stick at!  I look at what values currencies, and in my book, none of these things, plus, dozens of other things, add up to the value that is placed on the dollar right now. And that, my friends, is a good enough reason to bang on the dollar as any… 

OK… back to the regularly scheduled programming… Gold hasn’t had a good week while I was gone either… Gold is back below $1,300… And as Ed Steer of edsteergoldandsilver.com , said last week, “Da Boyz Were Out And About On Tuesday”… In layman’s terms… The price manipulators were sending the price of Gold downward on Tuesday… In fact he could have titled every letter he wrote last week the same! 

But Palladium is the cat’s meow of precious metals these days, as it has traded over $1,500 !!!!   That’s amazing to me, as all of the move to these lofty grounds for Palladium has come from what traders call a “shortage” of the metal, VS the demand…  There’s no question that this is how it’s supposed to be in the world, but… when does the curtain come down on this trade?  Palladium has proven a thought that my dad used to tell me all the time… There’s no such thing as a shortage of an item, the item is only in need of a price adjustment…   And Palladium has seen its price adjustment for sure!

This week, the Data reports will be flying in from all over the world, and here in the U.S. the Data Cupboard doesn’t have much today, but it builds a crescendo that comes on Friday with the Jobs Jamboree…  I have to say that in the past it made sense to report on the data of countries because it held a very important place among the things traders used to value a currency, but these days it’s just not the same…   For instance, look at all the weak and negative data reports we’ve seen here in the U.S. but did it hurt the dollar?  And look at all the bright shiny economic data reports we’ve seen print in Russia, and has it helped the ruble?  See, what I’m talking about? 

I just can’t get my arms around this article that came across Bloomberg this morning, that in the U.K. PM  May, paid for BREXIT votes…  I don’t know she escapes that one, unless it’s not true… You know, false news, and all…  

President Trump was dissing the dollar again this past week, saying that the strong dollar was hurting exports, and causing the large Trade Deficit…  He banged on Fed Chairman Powell, not by name, but by saying, “we have a Fed that… ” and so on…  I think the Fed should be banged on, as they’ve done an awful job of shepherding the economy and forward…  Beginning a rate hike cycle so late in an economic expansion, was their first mistake this go-round, and their 2nd mistake was deciding to reduce their balance sheet at the same time they were hiking rates…  They HAD to know that combining those two would be like hiking rates on steroids, and that would hurt the economy, eventually, didn’t they?  They DO have tons of economists that work for them, and one of them had to have come up with this idea don’t you think? 

I do…  and much like in the book by Danielle Di Martino Booth, Fed Up, when she would explain how the regional presidents would receive recommendations from his advisors, to present to the board…  

I read this morning that the U.S. and China are nearing an end of their Trade Talks, and will have an agreement in the end…  The stock jockeys should be happy about that… I’m just saying… 

I’m sitting here, looking straight out at the ocean, and the sun is rising over the ocean this morning, and it’s quite beautiful, and just exudes peace, and brotherhood…  Too bad that all gets lost on everyone… 

To recap…  The currencies haven’t rallied while Chuck was away, and so like all good theories die off… so does this one…   The currencies are basically in the same clothes as they wore when I went on vacation, and Gold got whacked a few times by the price manipulators, while Palladium continued to rally by large margins each day.  President Trump banged on the dollar and the Fed, and Chuck explains why he bangs on the dollar… 

For What It’s Worth…  Well, while I was away, my good friend, the Retirementor, Dennis Miller printed an interview he did with me, a couple of weeks ago… I had given you the heads up on this printing last week, before I went on vacation… But since Ed Steer printed it, I thought, I would too! Blow my own horn if you will…  So, this can be found here: https://milleronthemoney.com/dont-get-caught-in-the-fed-trap-again/

Or, here’s your snippet: “The Government surprised the world in 2008 when the Fed bailed out the banks at the expense of seniors and savers.
The Fed dropped interest rates to historic lows while buying U.S. treasuries and bad loans through their Quantitative Easing (QE) program. Seniors and savers lost over $4 trillion in interest income they would have normally received.

The stock market tanked. Investors, desperately searching for yield, redeployed their money into the market and higher risk bonds. Retirees had to take on more risk in order to survive.

Former Fed Chair Ben Bernanke called the consequences “collateral damage”. Seniors and baby boomers called it “catastrophic damage” as they downsized and altered their retirement plans.

Since the 2016 election the Fed raised rates 8 times. In January 2019 they held rates, but continue to sell off mortgages and treasuries. It appears the Fed is starting a U-Turn and we could soon see more QE.”

Chuck Again…  I hope you get an opportunity to read the whole interview, you’ll probably hear a thing or two that you hadn’t heard before…  and while you’re there, I would suggest you sign up for Dennis’ letter!

Currencies today 3/4/19 American Style: A$.7085, kiwi .6806, C$ .7568, euro 1.1340, sterling 1.3216, Swiss $1.0009, European Style: rand 14.2470, krone 8.6110, SEK 9.2980, forint 278.62, zloty 3.7910, koruna 22.6020, RUB 65.85, yen 110.85, sing 1.3545, HKD 7.8491, INR 70.81, China 6.7044, peso 19.35, BRL 3.7717, Dollar Index 96.59, Oil $56.29, 10-year 2.74%, Silver $15.14, Platinum $845.36, Palladium $1,546.54, and Gold… $1,287.23

That’s it for today…  Well, my beloved Cardinals don’t look good so far, but then it’s early in spring training… Pitching is good, hitting is bad, and fielding still needs work… I sit across the aisle from the Cardinals GM and the President of operations, and they get to hear my comments about plays all game long… I get in trouble at times from my wife when I say things… But when I’m alone like I’ve been the past two games… Watch out! I’m not one to hide my feelings or thoughts!  OK… lots of things going on this week here in S. Florida for me, with visitors, ballgames, inspections and so on, so I had better button this up and get going… I hope you have a Marvelous Monday, and remember to Be Good To Yourself!

Chuck Butler