Another Day Of Dollar Weakness…

A Pfennig For Your Thoughts
 
February 10, 2021
 
* currencies & metals gain a 3rd consecutive day… 
* Gold & Silver keep pushing higher… 
 
Good Day… And a Wonderful Wednesday to you… No local St. Louis, or Missouri teams were playing last night, so Kathy and Chuck went to dinner with friends, Pete and Karen… A good time was had by all, and Chuck had some of the best tasting pastrami ever! I realized yesterday that I had been very bad about remembering birthdays… But to my defense they did happen while I was very sick for a few days… So, Happy Belated Birthday wishes to: Chris Gaffney and Christine Peplow, two of my former colleagues on the World Trading Desk… My bad, My bad on that one.. But they shouldn’t feel too badly, because I also missed my youngest brother’s birthday… I’m very sorry about that Michael! I guess that when you get to my age, that remembering birthdays is like remembering the Gettysburg Address! Four score and seven years ago, Our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. We are now engaged in a great Civil War.. And from there, I would have to go to Google to get the rest, But in my elementary years, we had to recite this address in front of the class, and I aced it! At least that’s how I remember that going! HA! The Walker Brothers greet me this morning with their song: The Sun Ain’t Gonna Shine Anymore… “the moon ain’t gonna rise in the sky… The tears are always clouding your eyes, when you’re without love”…
 
Well, that was a long intro this morning… And I’m not beating around the bush here this morning either… It was another good day for the currencies, led by the Big Dog, euro, and while Gold & Silver were not able to hold onto their early trading gains, Gold did find a way to gain $7.40 while Silver ended up the day down 1-cent… So, in my books that’s a 3 consecutive days of rallies for the currencies and metals…
 
The euro added to its gains above 1.21 on the day, to end the day at 1.2130… And like I said yesterday, the trader sentiment toward owning dollars right now has certainly changed… At first, on Monday morning, I only saw the weak Jobs numbers as the reason for the change in trader sentiment, but, as the time grew on, I realized that it probably had a lot to do with the fact that the $1.9 Trillion Stimulus is on the fast track of approval… And if there’s anything that gets traders upset about owning dollars is the ideal of more debasement of dollars! And of course that’s exactly what we would have when the Gov’t beings passing out the stimmy checks!
 
And that my friends is what I’m going to talk about a lot this morning… Debasing the dollar… Every time the Fed & Treasury decide to print more currency, the current stock of dollars outstanding get debased even more… This Thursday, good friend Dennis Miller is going to take on the, what I call, The Magic Money Tree… And if you don’t think that not having any spending restraints, which is what the Magic Money Tree (MMT) is all about, isn’t goin to debase the dollar by large amounts, then you’re drinking the gov’t’s Kool-Aid… Because it will, and a weaker dollar allows other countries’ inflation to be imported into the U.S. economy… There’s no two-ways about this, either, so don’t go looking for one…
 
Many, many years ago, when I was writing for Mark Twain Bank, and Japan was going through their exercise of stimulus packages, and Quantitative Easing, and so on, I wrote about how if Japan really wanted to introduce inflation into their economy, they should allow the Japanese yen to weaken, which would bring inflation into the Japanese economy… But did they listen? No… And even during the years when the dollar was getting stronger, the yen remained just as strong… And so here Japan is some 25 years later, and still no inflation…
 
Ok, back to the U.S. and their grand experiment to bring inflation into our economy that hasn’t been prevalent since Paul Volcker killed it in the 80’s… Yes, the Chapwood Index, which I introduced to you, dear reader over a year ago, still has U.S. inflation around 10%, but that’s dealing with things the right way, and not the way the U.S. Gov’t chooses to do so… For if they did, citizens of the U.S. would be screaming bloody murder about how the Gov’t allowed inflation to get away from them!
 
So it was only a matter of time before the lightbulb over currency traders went on, and made them realize what the Cartel and Treasury were dong to the dollar, and allowing inflation to become a thing to have to deal with, all the while eating away at each citizen’s buying power, as the dollar goes on an extended ride down the slippery slope… With that scenario, is it any wonder that currency traders’ collective sentiment would change about owning dollars?
 
So, be sure to check out www.milleronthemoney.com tomorrow if you don’t subscribe to his letter, and read about the Magic Money Tree, and while you’re there, sign up! Dennis and I share ideas all the time, so you might read something there that you didn’t read here, from me! 
 
In the overnight markets, there was some slippage in the currencies, but they are still stronger this morning than they were yesterday, for the most part, and Gold is up $2, and Silver is up 4-cents in the early trading today. The euro which reached 1.2130 yesterday, and slipped back to a 1.2116, level, but that’s small potatoes folks… So the slippage has be nascent at best… 
 
So, as we start our Wonderful Wednesday, this is the 4th consecutive day of dollar weakness… I feel that it’s important that Gold & Silver show progress every day, even if it’s a buck or two for Gold and a couple of cents for Silver. I liken this thought to the thought that I’ve always held about football games… The offense needs to gain 10 yards to get a new fresh set of plays. Each play it is important that they gain ground, no losses, no penalties, progress on each play, and that way it’s easier to gain the 10 yards… 
 
The U.S. Data Cupboard is still lacking any real economic data today. The stupid CPI (consumer inflation) will print for January along with the Core Inflation data… Where they take food and energy out of the inflation calculation, which makes about as much sense as owning the tanning salon at a nudist camp. It’s not like we the people don’t use eat every day, and use energy… Come on throw us a bone here and admit that we’re smarter than the average bear! 
 
The Federal Budget is due to print today, but sometimes the Gov’t accountants get behind and the data doesn’t print on time… When that happens you’ve got to use imagination as to why it didn’t print. I’ve always contended that it was ready to print but the number wasn’t what the Powers that be want it to be, so they have to go back and massage the numbers, cook the books, and see what comes out then… That’s my story, and I’m sticking to it! And my first wife was a young Elizabeth Taylor! (I love the humor of John Lovitz!) 
 
To recap… it’s the 4th consecutive day of dollar weakness today, as least so far this morning it is… Trader sentiment has really done a 180 on owning dollars, and there’s two things that have caused this to occur… The weak jobs data last Friday, and the fast track that the Stimmy Checks, i.e. currency printing, thus debasing the dollar, is apparently on.. Chuck talks about this debasement of the dollar this morning, and how that’s going to effect your personal buying power… And then he goes on about positive movements that are needed… 
 
For What It’s Worth…  You know I’ve had many questions through the years, asking me why invest in gold when the price is manipulated? And recently I highlighted a note from the good folks at GATA regarding how investors are realizing that the Central Banks are rigging the price of Gold & Silver… And this is a note from GATA, (so no link, just whole article) of a response they received after printing the article just mentioned…  And so, here you go… The response, and the answer from GATA Sec. Treasurer is below… .
 
Here’s your full article: “Our old friend C.W. took issue yesterday with the dispatch about the GATA-supporting analysis of Matterhorn Asset Managemenet’s Matthew Piepenburg, which was posted at King World News and which, your secretary/treasurer wrote, indicated that investors are starting to recognize that market rigging by central banks is especially directed against gold and silver:
 
http://gata.org/node/20887
 
C.W. wrote: “But isn’t that the whole point of the rigging? It’s so much more effective if investors recognize it is happening and who is doing it, which is why it is done on such a consistent and obvious basis.
 
“So I don’t think that the general recognition of the rigging means we are closer to its end. Rather, it means it will be more effective as investors realize they can’t win the battle with gold and silver and so invest elsewhere.”
 
Your secretary/treasurer had to agree with C.W. that central banks, having been forced into more blatant episodes of market rigging, may be glad if people realize, informally, that central banks will do whatever has to be done to defeat alternative currencies.
But, your secretary/treasurer added:
 
— The scheme of the central banks doesn’t work if people also start to realize that they can achieve and benefit from an alternative currency only if they avoid the futures markets, which central banks easily can control by virtue of their power to create infinite money and trade infinite amounts of things that don’t exist.
 
— Eventually, if the rigging gets too blatant, even mainstream financial news organizations might feel compelled to report about it and raise questions that central banks can’t answer without putting themselves in political jeopardy.
 
— Also eventually, if the rigging is generally understood around the world, nations that are not benefiting from it — like nations where gold is produced — may protest and even try to pull the plug on the rigging. Many smaller countries could pull the plug on it just by selling U.S. Treasuries and buying relatively small amounts of physical gold, since supply seems so tight.”
 
Chuck again… All excellent points Mr. Secretary/ Treasurer… And one’s that I’ve pointed out in previous answers to those questions I’ve received… 
 
Market prices 2/10/21: American Style: A$ .7728, kiwi .7212, C$ .7875, euro 1.2116, sterling 1.3834, Swiss $1.1214, European Style: rand 14.7134, krone 8.4439, SEK 8.3183, forint 295.25, zloty 3.7000, koruna 21.3779, RUB 74.04, yen 104.78, sing 1.3263, HKD 7.7522, INR 72.82, China 6.4393, peso 20.13, BRL 5.3784, Dollar Index 90.47, Oil $58.70, 10-year 1.17%, Silver $27.28, Platinum $1,222.00, Palladium $2,428.00, Copper 3.72, and Gold… $1,840.96
 
That’s it for today… Whew, I can tell you that Kathy wasn’t here, I would not be up writing at my usual time this morning. I would have slept for a few more hours! It’s so quiet here when I’m alone… I’m just saying… But it was good for me to get up and get to writing! Tonight, my beloved Missouri Tigers will travel to Ole Miss and the game comes on late down here, so I’ll be up late once again! UGH! A full sun day here yesterday, and my weather app told me it felt like 89 degrees! The local leaders are doing some beach restoration here after the storms of last year, and the beach is looking great! You know, there must not be many people traveling to Florida this year, for the roads aren’t that crowded, and beach doesn’t have many people on it, which is fine with me! The Allman Brothers take us to the finish line today with their instrumental song: In Memory of Elizabeth Reed… In one of the variations of bands I played in through my early years, one of them was a bluesy band, that played lots of Allman Brothers songs, like this one… And Grand Funk Railroad, which in the early days of the band their music was miles of difference from what they did later in their careers, when they became more pop. For instance, Inside Looking Out, VS The Locomotion… a song originally done by Little Eva… Ok, sorry for the long dissertation on Bluesy music… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself!
 
 
Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts