Chuck Butler’s Daily Happenings Around the World

September 26, 2017

* The dollar is back in the driver’s seat…
* Thanks to all the saber rattling!
* Gold has a good day!

Good day… And a Tom Terrific Tuesday to you! I don’t know what hit me yesterday, but right after hitting send, I began to get the chills, and all my energy was sapped, it was all I could do to climb the steps back to my bedroom. I put on not one sweatshirt, but two sweatshirts, a hat, and my hoodie, laid down and fell asleep until well into the mid afternoon! Then when I woke up I was burning up, and had to start shedding all that extra stuff I put on to warm me up! My head was till pounding last night… But I think I’m better today, YAHOO! And one of my all-time fave songs is playing right now, as Supertramp greets me with their song: Hide In Your Shell…

The rebound that the currencies saw on Friday, was quickly snuffed out with dollar buying yesterday, and the euro continued to slip further down in the 1.18 handle. But gold rebounded nicely closing up $13.20 on the day! I had a good friend send me a note and ask me if he should wait to buy more Gold, since it was up so strongly today… I always think about that, but who’s to say it won’t be up big again today, or the next day? I’ve never been a market timer, if I want something I buy it when I want it… I used to tell the story in my presentations about not buying when you want to buy… I would tell the audience about a man, who’s main objective is to get downtown, waiting for a bus… And when one comes along, he looks at it and decides that the next bus will be shinier and newer, and when the next bus comes it is indeed shinier and newer, but that get’s the man thinking again, and he decides not to get on the bus, because the next one will probably be high tech, etc. And indeed it was, but this went on all day, and the man never did get downtown!

So, where was I anyway? Oh, yeah, talking about Gold’s rise yesterday… And just as impressive was the rise in the price of Oil, which gained nearly $2! And I think that, along with N. Korea saying they will attack our planes in international airspace, got Gold moving upward yesterday. What does the price of Oil have to do with Gold? You see, if there is a rise in commodity prices, led by Oil, then that means the commodity traders see rising inflation, and guess what shiny metal does good in a rising inflation environment? You got it!, aw come on, that was too darn easy!

The currencies are seeing their gains slip sliding away, slip sliding away, you know the nearer your destination, the more your slip sliding away… – Paul Simon… And Oil backed off its lofty level above $52 yesterday in the overnight trading… All this saber rattling between the U.S. and N. Korea is wearing on the currency traders, and when they get that way, they buy dollars and wait for something to change.

This doesn’t change my thought that the strong dollar trend has ended, this is the volatility I always talk about when it comes to there being no One-Way Street in currency trends. So, what does that mean for investors that recently bought currencies? Well, it means, in my humble opinion that is, that could be wrong, that you go back and buy more at cheaper prices to dollar cost your avg. downward!

So, this morning, the euro has slipped through the 1.18 handle and looks like it will end the day in the 1.17 handle. The Petrol Currencies of Russia, Norway, Brazil, Canada, and others, weren’t able to rally on the jump in the price of Oil because the pull from the dollar was too strong, and overrode the price jump in Oil. Wouldn’t you just know that would happen? Oil jumps $2, and the Petrol Currencies aren’t able to rally on that move because the dollar was too strong… UGH!

And the Canadian loonie could have used a boost, as it continues to give back nearly all its gains from the rate hike two weeks ago. But the loonie isn’t alone there.. The Aussie dollar (A$) and kiwi have also given back huge chunks of their previously gotten gains. The only currency, besides Gold, that had a good day yesterday VS the dollar, was the Japanese yen, and yen still has its rally shoes on this morning, thus proving once again that for some strange reason, yen is considered a so-called “safe haven currency”… And the saber rattling between the U.S. and N. Korea has investors and traders buying safe havens…

The weird thing about the safe haven buying is that the euro normally plays a large part of that buying, and not so much this time. The uncertainty that we talked about yesterday in German politics is weighing very heavily on the euro right now…
Another safe haven is U.S. Treasuries, and the 10-year yield did drop by 1 Basis Point yesterday… Nothing to write home about here, so just move along, for these are not the droids we’re looking for!

I was doing some reading last night, because my Cardinals had already fallen behind, big time, in their must-win game VS the Cubs, and I came across an article on the Puerto Rico… I read where no credit cards can be used because power is down throughout the island country. And that got me thinking… About the cashless society that I keep writing about… Take Puerto Rico, what if the country’s residents were using cryptocurrencies? Well, that’s not going to work… And what if they were using Apple pay or whatever pay? Well, that’s not going to work, and probably won’t work for several weeks… Ahhh, but if you had a pocket full of cash, you are first in line for meals, and what have you because, well, you have physical money… Just think about that for a minute, and then carry it over to here in the U.S. where people keep writing about how the power grid is vulnerable to N. Korea’s hydrogen bombs… That reminds me I need to get to the ATM and get some cash, as the stash in my pocket is getting thin!

Oh, and the Cardinals lost that game last night 10-2… A real country beating as my dad used to say! Boy the game of baseball sure has changed since I was a kid… One Cubs player made a statement before the game that they will especially enjoy celebrating winning the division at Busch Stadium… Now back in the day, the player would have earned some chin music, and then one in his ribs… Where are the Bob Gibsons and Don Drysdales these days? Of course maybe that all happened last night because I didn’t watch it after the first inning! Sorry about going there, but I just had to get that off my chest!

You know how I’ve been following the spread between Platinum and Palladium since the CEO of a mining company made a bold prediction that Palladium’s price would surpass the price of Platinum this year… When he made that statement I saw that it would either be a HUGE rally in Palladium or a significant drop in Platinum’s price, or both… And that’s exactly what we’ve had… The spread today stands at $19… It’s come a long way, eh?

The U.S. Data Cupboard has 3 data prints today that won’t necessarily move the markets but here they are anyway… First up is the Case/Shiller Home Price Index for July… Then we’ll see Consumer Confidence, and finally August New Home Sales…. So, go ahead and knock yourself out if one of those is your cup-o-tea! HA!
To recap… The Cardinals blew a tire last night, and all the saber rattling has got the markets all frenzied up again, and this time euros are not part of the safe haven buying, because of the uncertainty of German politics right now. Gold had a good day gaining $13, and the price of Oil jumped $2. And Chuck goes on and one about old time baseball!

For What It’s Worth… Remember when the interim President in Brazil took over and I said that he was going to open up trade and get the economy moving again? Well, this is a part of that, as Brazil opens up their Oil industry and the article can be found here: http://www.marketwatch.com/story/brazil-lets-in-big-oil-firms-a-decade-after-ejecting-them-2017-09-26

Or, here’s your snippet: Brazil will on Wednesday begin reversing what industry officials say was a costly and ultimately disastrous decision a decade ago: setting aside billions of barrels from the Western Hemisphere’s largest oil discovery in 30 years for its state-run oil firm at a time when deep-pocketed foreign companies were clamoring to invest.

Brazil removed key acreage from a 2007 auction that could have yielded $100 billion in signing bonuses plus hundreds of billions more in spending commitments when the price of oil was near record highs, according to several former executives at Western oil companies.

Now, Brazil may generate just a fraction of what it could have as it looks to exploit its oil potential and revive its economy.

“We are trying to put the country back on track,” Energy Minister Fernando Coelho told an oil conference in Houston earlier this year.””

Currencies today 9/26/17… American Style: A$ .7904, kiwi .7206, C$ .8070, euro 1.18, sterling 1.3454, Swiss $ .9715, … European Style: rand 13.3095, krone 7.8569, SEK 8.0836, forint 263.89, zloty 3.6305, koruna 22.0835, RUB 57.51, yen 111.71, sing 1.3537, HKD 7.8105, INR 65.52, China 6.6155, peso 17.94, BRL 3.1417, Dollar Index 92.88, Oil $51.93, 10-year 2.22%, Silver $17.11, Platinum $944.98, Palladium $914.93, and Gold… $1,307.70…

That’s it for today… Boy I hadn’t had a day like yesterday in some time, and hopefully never again! But really, with regards to the drug that I get infused into my blood system every other week. I tolerate it pretty well, with only a few days here and there where I feel like death warmed over.. So, I consider myself lucky, because there are some cancer patients that feel like death warmed over all the time! UGH! I used to say that I was going to be stubborn and live so I would eventually see the “magic pill”… I’ve got to keep my focus on that day… I have some errands to run today, so I have to have my strength back! And I think I do… So that’s a good thing! Peter Gabriel takes us the finish line today with his song: Big Time… And with that, it’s time to go! I hope you have a Tom Terrific Tuesday, and Be Good To Yourself!

Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts

a) The Daily Pfennig is no longer published by EverBank and it is now published by Aden Research Group.