July 15, 2021
* Currencies & metals both rally on Wednesday…
* Is the Empire of Debt ready to come crumbling down?
Good Day… And a Tub Thumpin’ Thursday to you! What a day yesterday! The sun was out, the sky was blue, the temps were hot, and we had visitors! When Darling daughter, Dawn, was in college, she met a young lady from Chicago, named Kat… Dawn and Kat were inseparable for those years, and Kat became one of our family, staying with us very often, instead of going home to Chicago. Columbia is only two hours down the road. Well, Kat is all grown up now, married and has two little boys, and they came to visit us! I loved seeing Kat again… And her boys? Well they left here tired and ready to sleep, we had worn them out, in the swimming pool! Tom Petty and the Heartbreakers greet me this morning with my fave song by them: Last Dance With Mary Jane…
It was quite a day for the currencies and metals too on Wednesday… The dollar got sold and the currencies rallied all day long, along with Gold & Silver, that for once in a Blue Moon didn’t see arms full of short paper trades show up at the COMEX… The BBDXY which the previous day had closed at 1,147, ended Wednesday at 1,141.71… So, up by a major amount on Tuesday and back down by a major amount on Wednesday… Apparently currency traders don’t have a clue as to what to do these days… The euro rose into the 18 handle and Kiwi kept the pedal to the metal after the Reserve Bank of New Zealand announced that they were ending their bond buying…
Talk about up one day and down the next… The price of Oil yesterday traded with a $75 handle, and this morning it’s dropped to $71! Come on Oil traders make up your minds!
And Gold…. Well it was up $20 on the day to close at $1,828.30, and Silver was up 27-cents to close at $26.33… I guess investors got the memo that inflation is soaring, and there’s not a thing the Fed can do about it at this point… So… the question is this… How much higher can inflation rise before the Fed does address it?
Yesterday I said that the year on year increase in inflation was 5.4%… Bill Bonner added:” talking about the year-to-year rate. The actual increase from May to June was 0.9% – the biggest one-month increase in 13 years.
If that were to continue, it would put the inflation rate over 10% for the year.” – Bill Bonner in his Diary…
Remember what I told you yesterday about the stupid CPI? And that if they are saying inflation is running at an annual rate of 5.4%, then the actual number is probably around 7.5%… Well, even my estimation is going to be off!
There’s something happening here…. What it is ain’t exactly clear… Well, the only reason it ain’t clear is that the Fed and Government keep telling us it doesn’t exist, and that it will go away… I’m talking about inflation here… It’s all around us, and yet, we keep hearing the authorities tell us not to worry, that it’s just phase… You know, like I used to have to tell myself when one of my teenage kids decided to go a different route… “It’s just a phase”, and not to make a big deal out of it…. But this is different, in that it’s not going away, it’s not just a phase, and its eating away at your buying power, while the Fed fiddles away while Rome burns….
In the overnight markets last night…. I tell you… This is driving me nuts, and I need a vacation! Last night the dollar recovered a bit , with the BBDXY rising to 1,143, from its close in the U.S. of 1,141… All of the currencies have slipped from their levels of yesterday, and once again this is a case of traders being dolts… I’m just saying…
Gold & Silver are basically flat, to down a bit in the early trading today. Silver is up 2-cents, and Gold is down $3… So, no real direction indicated in the early markets today… I guess the data might have something to do with the direction, but then you never really know what’s going to excite the traders…
The end of the Empire is near folks… I’m not talking about the guy with the sandwich board walking around saying the “end is near”… I’m talking about the U.S. being an Empire that is number 1 in the world… And we only have ourselves to blame for this… I strongly suggest you read a book by Bill Bonner and Addison Wiggin, titled: Empire of Debt… The book is about 15 years old, but sill holds true today, with the only caveat that now, we’re even closer to the end of the Empire… I say we’re to blame because we allowed our Congress to keep deficit spending when we all know that we knew in our heart of hearts that you can’t keep kicking the debt can down the road forever! And while they were deficit spending, nothing was going wrong, and that gave everyone a false sense of security… But eventually the good times come to an end, and you have to pay the piper…
We’re getting closer to the culmination of all that bad stuff I wrote about over a year ago… Defaults, digital dollars, and a different financial system… So, I have one question to ask you? Got Gold? Oh, and one more question… What have you done since that time that I warned everyone the direction we as a country were heading, to protect your wealth?
Ok… So, I hear that the Gov’t is going to spend another $5 Trillion on infrastructure… Oh, I’m sure that there are plenty of bridges and roads that need repair, but isn’t that a local problem not a Government problem? All I know is this… that of that $5 Trillion, none of it will come from tax receipts, because those have all been used up, and that I would be a shiny quarter that there will plenty of “pork” in this deficit spending debacle… Someone is going to grease their pockets, big time, folks… and maybe even more than one someone…
And to repeat… that’s money that will have to printed… So, $5 Trillion more dollars to help dilute the already Trillions of dollars out there, I don’t see how the dollar can hold onto its value with that kind of dilution, do you? Oh, I know the PPT as the Exchange Stabilization Fund (ESF) that has a treasure chest of funding to support or prop up the dollar, but at some point it will become a loss leader to prop up the dollar and the support will go away…
The U.S. Data Cupboard yesterday has the June PPI (wholesale inflation) and it was up much greater than expected at 1.0% for the month… Annualized that’s producer increases of over 10%… And we’re just getting into these producer price problems folks… A dear reader sent me a letter from his steel provider, and in the letter the Steel Company told their clients that steel prices have jumped by 30%, and that their prices would increase by 20% starting 9/1/2021….
See how that works… the producer sees price increases and they pass them onto the customers… So, expect higher inflation going forward, folks…
Today’s Cupboard finally has some real economic data in Industrial Production and Capacity Utilization for June… In addition we’ll also see the usual Thursday fare of Weekly Initial Jobless Claims…
You know I don’t see how the economy is going to get back to “normal” with all these businesses reporting that they can’t find enough labor to keep their businesses going… People just don’t want to work any longer… They’ve grown accustomed to the stimmy checks I guess… I told you that when the first of these stimmy checks went out that it was setting a bad precedence, and look what’s happened since… Another one, and another one, and pretty soon there will be calls for more… if you give a mouse a cookie….
To recap… The currencies & metals had good days yesterday, with no sign of price manipulation on the day! Chuck thinks that traders finally got the memo that inflation is soaring… In the overnight markets
Chuck really gets into inflation today folks, so make sure you didn’t skim over it and go back and read it! And then he goes on to explain how the Empire of Debt (the U.S.) is about to come to and end, not like the guy with a sandwich board that says the end is near, but an end of their deficit spending… And yesterday’s PPI print showed that wholesale inflation is soaring and that means that prices increases will be passed onto the consumer…
Yesterday, I talked about the PBS program Frontline, where the people responsible for the program, took aim at the Fed for their policies that have really only helped the rich… Well, last night, good friend, Dennis Miller of www.milleronthemoney.com sent me a link to the program and so I am going to give that link to you dear reader, so you can watch in your spare time… The program is 53 minutes long, so make sure you allot enough time… it can be found here: The Power of the Fed (full documentary) | FRONTLINE – YouTube
For What It’s Worth… Well, this may be a sign of the times, folks… This comes from my local paper, the St. Louis Post Dispatch, and it highlights the lack of workers in sanitation… So, why go through the effort of separating recycling and regular trash? This article can be found here: Labor shortage slams St. Louis trash pickup and many other city departments | Politics | stltoday.com
Or, here’s your snippet:” ST. LOUIS — The city is throwing out recycling with the trash in an effort to catch up on routes, a sign of broader struggles from being short hundreds of civil service employees.
“Physically, my workforce had no more to give,” Refuse Commissioner Todd Waelterman said of the cutback. “That is why this week we are mixing these two together.”
The roll carts are being recycled as usual. He said it’s the alley dumpsters, which 80% of city residents use to recycle, that are being mixed. That saves a pickup route.
“That recycling is all fluffy and light unless you load it up with a lot of beer and wine bottles,” he said.
Like in many other cities, St. Louis employers need more workers. Local officials said summer vacations, holidays, competition and fallout from COVID-19 have contributed to the shortage.
Waelterman said the Refuse Division was short on people even before the pandemic. The division has 146 full-time positions allocated; 30 are vacant, and a dozen part-time positions are open. Most of the vacancies are heavy equipment operators who drive trucks that pick up garbage. Others do bulk pickup.
In 2018, trash problems stemmed from the city’s garbage trucks breaking down. The city has since bought or leased-to-own 40 trucks and has five more ordered. Now, the city is struggling to find people to drive and load them. “
Chuck again… I’m glad to read that their worker shortage began before the pandemic… As I’ve said a few times previously, that the U.S. economy was going down the tubes before the pandemic hit, and then it got worse, but when people say we need to get back to where we were before the pandemic, they don’t know what they’re talking about, because we, as a country and its economy, were sucking wind then!
Market Prices 7/15/2021: American Style: A$ .7441, kiwi .6995, C$ .7975, euro 1.1809, sterling 1.3861, Swiss $1.0905, European style: rand 14.5593, krone 8.7911, SEK 8.6670, forint 304.34, zloty 3.8731, koruna 21.6667, RUB 74.15, yen 110.00, sing 1.3543, HKD 7.7672, INR 74.48, China 6.4674, peso 19.94, BRL 5.1224, BBDXY 1,143.57, Dollar Index 92.54, Oil $71.94, 10-year 1.33%, Silver $26.35, Platinum $1,140.00, Palladium $2,635.00, Copper $4.23, and Gold… $1,825.30
That’s it for today… And for tomorrow and for two weeks… The next time I’ll write to you will be Monday, August 9th… How will you be able to get through the day for over two weeks without a Pfennig? Well, I have a suggestion… When you have Pfennig pangs, simply go to: www.dailypfennig.com and read an old article! Hey! I had to do some real negotiating to get that URL to follow me to Aden Research, folks, so put it to use! For those of you on Twitter, you can find me at ChuckOButlerjr or just put my name in the search and find me… like I said yesterday, I might Tweet something while I’m gone, if something happens that is crazy, and then I might not… You never know! I was thinking last night that, you know how the currencies & metals always gain while Chuck is away? Well, maybe yesterday’s price action is the markets getting ready for my absence? HAHAHAHAHA! As IF! Man it was great to see Kat yesterday… The last time I saw her, I had stayed at her house In Columbia, Mo after a football game in Sept 2014! YIKES! That’s too long! Well… I have my favorite Neil Young song spooled up to play at the finish line today… Harvest Moon… Neil Young has so many songs that I like, but this one always seems to get to me… I hope you have a Tub Thumpin’ Thursday, and Fantastico Friday tomorrow, and for the next two weeks please promise me that you will Be Good To Yourself!
Chuck Butler