Where’s The Independence?

November 25, 2020 

* Gold & Siler get whacked badly on Mon & Tues

* Turkey for me, Turkey for you… 

Good Day… and a Wonderful Wednesday to you! I’ve decided to go back and forth with the other Wednesday greeting, so for this week, its this one!  Well, my visit to the hospital yesterday early morning was fine… The doctor called me yesterday afternoon, to tell me that there was no NEW cancer found…  I thank the Good Lord for looking over me!   Things sure are crazy in the world today, eh? I sure hope that the police will not take any orders to storm houses that are hosting Thanksgiving dinners!  I doubt that will happen, as policemen have families too, and know how difficult it has been this year to be a regular family….   OK… Tomorrow is Thanksgiving… I’m really of the opinion that it’s nobody’s business who or how many people I have in my house… And I’m not going to cower to anyone that tells me I can’t do something in my own house! (except if I ever decided to cook meth!) Then I guess I would deserve it! HA!  Smooth Jazz Christmas is on again this morning, and the song is: It’s The Most Wonderful Time Of The Year… 

OK, Pfennig Tradition calls for Adam Sandler and his Turkey song to lead us off today… so take it away, Adam!

Turkey for me
Turkey for you
Let’s eat the turkey
In my big brown shoe
Love to eat the turkey
At the table
I once saw a movie
With Betty Grable

That song has got to be one of the silliest songs ever, but I still get a kick out of hearing Adam do the song, and it brings a big smile to my face…

OK… Well, that makes 3 Mondays in a row that the price manipulators have taken down the price of Gold by HUGE chunks! That’s right, 3 Mondays in a row…  So, from now on, if you want a cheaper price to buy Gold, wait until the price manipulators have finished on Monday, or like this week on Tuesday too… As they took Gold down again on Tuesday…   Gold has lost over $60 in its value this week, and for what?   I’m shaking my head in disbelief that this is going on, while Rome is burning… The world, as a whole, is circling the bowl, and Gold is get sold? Come on! Give me a Break here! I may have been born, I just wasn’t born yesterday!

And the manipulations didn’t stop with Gold & Silver either! Recall that on Monday I mentioned that the euro had climbed above 1.19, but wondered how long that would last?  Well, it didn’t last too long, as the single unit was sold down to 1.1830 during the day…  It rallied back yesterday, but my-oh-my was the damage to the euro too much? I would say so… but then, I presume that some of the selling was justified, as the safe haven assets of Gold, euros, yen, sterling, all got sold on Monday… But as I said above, Come on! That’s crazy!

In the overnight markets, the currencies have held their gains from yesterday, and the euro is pushing the envelope toward 1.19 once again. Gold is up $5 in the early trading today, and after the bloodletting of Gold’s price the last two days, I’ll take $5 any day!  There’s a ton of economic data to print today, so it’ll be interesting to see where traders take these two asset classes…. 

And don’t look now, but the price of Oil has jumped higher to a $45 handle this morning… I read where the Oil traders are really into the storyline of how the vaccine brings the economy back and drivers of automobiles back on the road…  I’m thinking that they have been drinking the Kool-Aid, that’s spiked… That’s what I’m thinking… But, shoot Rudy, we’ve got the price of Oil higher, which means the Petrol Currencies are looking healthier, including the Russian ruble and Norwegian krone… 

All that anyone wants to talk about today, markets wise, is Bitcoin… There are people out there telling investors to sell their Gold and buy Bitcoin… Wait, What? Yes, that’s right, sell your storage of wealth for a scam, or ponzi scheme, as I see it… Now, that makes a lot of sense to me! NOT!  OK, let’s go through this…  I realize that Bitcoin has made many riches for investors to date…  But… here’s where the rubber meets the road, folks… What if, you go to turn on your computer one morning and find that your stash of Bitcoin is gone? Someone hacked your computer, and stole your Bitcoin, along with your identity, etc.  Who ya’ gonna call? Not Ghostbusters that’s for sure! But they would be about as much help as anyone else, because there will be no one to call! 

Then think about this seriously…. Gov’t’s all over the world are creating their own digital currencies, and the U.S. is far out in front here… Now what makes you think that the U.S. or any Gov’t would allow a private digital currency to compete with their own?  Can you say, private digital currencies could be outlawed? There! I knew you could!      So, go ahead and sell your Gold, I’m sure there are plenty of investors out there that would love to scoop up some cheaper priced Gold!  

You know, the more I think about this armegeddon that we’re going through, and it will only get worse, in the coming months, I wonder about how Joe six pack is going to put bread on his table, or a roof over his house…  And then add to that the prospects of higher taxes next year, and an increase in Capital gains taxes, etc. It would make sense if you own something that has gone through the roof in price since you bought it, and you weren’t planning on holding it very long, to sell it while the getting’s good, with regards to taxes…   Obviously, the stock jockeys aren’t looking at that yet…  But as you would expect, I am…

On Monday, I talked briefly about taxes… And then came my weekly letter from my fave writer, Grant Williams, and his Things That Make You Go Hmmm…   And he spent this week talking about taxes… I have lots of thoughts to add to his, and I’m going to do so here…   Tax the Rich! That’s all we hear these days… Did they, who make these claims ever stop to think that the wealth that the “rich” have, has already been taxed? And if we’re talking about capital gains taxes, that money has already been taxed a couple of times! Same with dividends…  But in fairness to those that believe that the panacea of their money problems lies with the “rich”…  The wealthy always seem to get thrown in as the “cure all” for all that ails us…  And they make easy targets, because… well, they’re so well off!

And I believe that it won’t be long here in the U.S. until we see an attempt to go after the “rich”…  Here’s a quote from Grant Williams, “With the ongoing struggle between asset-rich Boomers and asset-poor millennials constantly building up steam, this will be coming to a head sooner rather than later and the ‘wealthy’ are going to find themselves squarely in the crosshairs.”

I’m not considered “wealthy” so I have no dog in the hunt here… I just wanted to point out that while it does seem to be the low hanging fruit on our trip to find equality, I don’t think that in the end it will solve anything…  Because once you give an inch, the next thing will be wanting to take a foot, then a yard, and soon enough it will be a mile…  No one will ever be satisfied, period…  And that’s it for me on taxes today…

Before I go on… I’ll leave my thoughts on Taxes just lay there, and allow the soothing way that Mr. Grant Williams explains things take it from here….

“It’s been a wonderful ride, folks, but the time to pay the piper is here and, if you have ‘wealth’ – particularly if it’s in the form of capital gains from the wildest, most improbable equity bull market of our lifetimes – might I humbly suggest it may be time to peer a short distance into the future and take precautions to guard against what you’re being told by those in control of such things is most definitely on its way? The fact that capital punishment is most certainly going to be liberally dished out, doesn’t mean you have to merely sit quietly and wait for it to be applied. “ – Grant Williams from TTMYGH……

Oh, and I do have one more thought here, folks…(you knew I would, right?)  Recall that I believe that we’ll all be using a digital currency in the not so distant future, right?  Well, think about the Gov’t and its ability to implement taxes….   If we have digits in our account that can’t be taken out and stuffed under pillows and into coffee cans, then they are there to be taken…. By the Gov’t with any % of taxation that they deem to be “what’s needed”…   I’m very afraid that’s where we’re headed folks…  And when that happens, I will take my bat and ball and glove and go home… My days fo writing will be over, for there will be no markets to talk about any longer…   But if you’re the gov’t. and you see an opportunity to get everyone on the same playing field, tax them accordingly, and watch the money flow into the Gov’t’s coffers, to whittle away any way they feel it should be whittled away, why would you wait for 2025, 2030, or 2023? I’m just saying…

The great comedian, Chris Rock, has this to say about Taxes…. “Taxes aren’t paid, they’re taken”…. How true this will all be when we’re digitized!

OK, in other news… our old friend, (NOT!) Janet Yellen is back to haunt us… She’s been named the new Treasury Sec. Wait, What? I thought the Fed was supposed to be an independent Central Bank? But now the former Fed Chair, is the Treasury Sec. how convenient is that?  Well, it appears that the swamp, is filling up very quickly again…  I’m just saying…

And then speaking of the Gov’t…..  David Crosby, yes, THAT David Crosby, posted something to Twitter that I also saw from someone else, but since David Crosby posted it, I went with that… Check this out from Twitter:

“The vaccine should be tested on politicians first.

If they survive, the vaccine is safe…

I they don’t, the country is safe… 

Now, isn’t that something we can all get behind? “

As I told you on Monday, The U.S. Data Cupboard is chock-full-0-data today…  I’ll list all the data prints today, and save comment on them for the end… We start with: The Weekly Initial Jobless Claims from last week, then Rocktober prints of Durable Goods and Capital Goods Orders, and Personal Income and Spending, and finish it off with Core Inflation… There will also be another revision of 3rd QTR GDP… Which if you recall, I did the math on last time it tried to pull the wool over our eyes….

I believe we’ll see some rot on the economy’s vine with these prints, folks… And that was in Rocktober, before the latest surge of virus cases, caused Governors, Mayors, Congress, to lose their collective minds, and begin the whole shutdown process over again…  We’re watching the systemic take down of the great American economy, folks… If you’re like me, you sure don’t like what you’re seeing…

To recap…  it’s been an ugly week so far for Gold & Silver, with the euro getting sold on Monday, but rallying on Tuesday.   The selloffs of Gold & Silver on Monday & Tuesday have been colossal to say the least…  Chuck just doesn’t get it, but then that’s the plan in his opinion, to pull the wool over our eyes.   Janet Yellen, formerly of the Cartel, I mean the Fed, will be our new Treasury Sec. And the incestuous feeling between the Cartel and Gov’t just grows closer… And Chuck goes out on a limb with Bitcoin…

For What It’s Worth…  Well… this was an interesting article, with the viewpoints of a couple of the casino bank dudes, giving their thoughts on what the Fed is going to do in the coming months, and it can be found here: Central Banks To Add Liquidity Worth 0.66% Of Global GDP On Average Every Month In 2021 | Zero Hedge

Or, here’s your snippet: “Earlier today we explained why Morgan Stanley’s chief equity strategist Michael Wilson voiced concerns about the continuation of the “overcooked” equity rally, expecting a draw-down into year end for the simple reason that “both fiscal and now monetary policy have become reactive rather than proactive. For markets, that becomes the itch that needs to be scratched–i.e. market pressure is necessary and likely to get Congress and/or the Fed to act.”

And yet, once the coming period of volatility is over, Morgan Stanley sees the bull market continuing with the S&P expected to rise another 10% over the next 12 months.

Why? The answer is simple, and is the same one explaining the market’s rally over the past decade: the unprecedented liquidity injection by central banks since 2009.

As Morgan Stanley’s chief rates strategist Matthew Hornbach wrote in a note this morning, while conceding that “unforeseen obstacles to a buoyant risk environment will arise” he said that “current central bank policies are aimed at softening those blows, and will be effective at doing so.” Indeed, as Hornback predicts, “not only will central bank balance sheets continue to expand“, with the Morgan Stanley  strategist expecting G4 central bank balance sheets to hit just why of $30 trillion in two years, up from $25 trillion currently…

While it was once seen in poor form to assign a bullish thesis to central bank liquidity and intervention, those days are long gone as Hornbach shows:

Central bank purchases of private sector assets (government bonds, corporate bonds, agency MBS) feature heavily in both types of liquidity injection. Exhibit 7 shows our monthly QE projections for the 8 central banks we think will be active in 2021.

We expect these 8 combined to remove US$304 billion of securities ($238 billion of which will be government bonds), on average, from private markets every month in 2021. Unsurprisingly, the Fed and the ECB will remove the most securities each month, in U.S. dollar terms.

In total, these 8 central banks are expected to add liquidity worth 0.66% of annual nominal GDP, on average, every month in 2021. “That is a rapid pace of global liquidity injection, the likes of which we haven’t seen outside of 2020” Hornbach casually inserts.

While these are staggering numbers, consider that the IIF now sees total global debt rising from $277 trillion at the end of 2020 to a grotesque $360 trillion by 2030, over $85 trillion from current levels.”

Chuck again… This is crazy folks… The Central Bank is the defacto-buyer of last resort for the stock jockeys… Who’d a thunk that could happen in our lifetimes?  And I think that the boys in the article are being too conservative with their thoughts on the Fed’s balance sheet… I would expect it to explode higher in 2021…  I’m just saying…

Market  Prices 11/25/20: American Style: A$ .7346,  kiwi .6965, C$ .7663, euro 1.1887, sterling 1.3343, Swiss $1.0970, European Style: rand 15.2585, krone 8.8876, SEK 8.5320,  forint 303.67,  zloty 3.7681,   koruna 22.0350, RUB 75.78, yen 104.47, sing 1.3425, HKD 7.7510, INR 73.85, China 6.5843, peso 20.05, BRL 5.4123,  Dollar Index 92.22,  Oil $45.15,  10-year .85%, Silver $23.49, Platinum $964.00, Palladium $2,356.00, and Gold… 1,815.10

That’s it for today… Whew, counting Monday’s long Pfennig, and today’s Long Pfennig, there’s enough reading there for everyone to take home and read through the weekend!  That’s your Thanksgiving break assignment, should you choose to accept it! HA!  The powers that be, sure are keeping the “fear factor” high with us right now… As I explained to my kids, they have to keep the “fear factor” up to maintain their control…  I can’t wait to see the video of Tom Woods telling 100 state legislators his thoughts on lockdowns, masks, etc.  I sure hope you get to enjoy a very blessed Thanksgiving, and don’t eat too much!  But if you do, that’s what an afternoon nap is for! I always enjoy a turkey sandwich at night… Well, our crowd has been whittled down, to just the 12 of the Butler family for dinner… UGH!.. One of these days, I’m going to sit everyone down and explain to them the risks they take every day… But that’s for another day… I’m still on the smooth jazz Christmas station on Pandora, so the song that takes us to the finish line today, is a jazzy rendition of O Christmas Tree…   I hope you have a Wonderful Wednesday, and Tub Thumpin’ Thanksgiving tomorrow, and rest of the week, and please remember to Be Good To Yourself!

Chuck Butler