Could Basel 3 Send Gold To Higher Ground?

A Pfennig For Your Thoughts

June 8, 2021

* Currencies & metals rallied in the U.S. on Monday
* Wages in the U.S. are soaring higher… 

Good day… And a Tom Terrific Tuesday to you! Well, the doc called yesterday after my bloodwork was run through the gauntlet, and told me that I’m no longer bleeding, and that my blood counts are improving, which was good news… But I asked her what about all this swelling on my abdomen? She said, “I told you that it could take a couple of months for that to go down”.. I said, Ok, I was just making sure I heard you right the first time! My beloved Cardinals had a day off yesterday, to lick their wounds… I’m starting a drive to send a memo to the Cardinals to trade for St. Louisan, Max Sherzer, now! I do that in hopes that it gets more traction than my drive to get the Cardinals to sign Bryce Harper a couple of years ago! America greets me this morning with their song: Daisy Jane…

Well, yesterday’s early morning red marks in the currencies, Gold & Silver were turned around as the day went along, and by the end of the day, the euro had recovered 1/3 rd of a cent, Gold turned its $6 loss in the morning to a $7.70 gain! And Silver turned its 38-cent loss in the morning to a 7-cent gain… I think what caused this to happen, was traders and such finally looked into the BLS Jobs Jamboree that printed last Friday, and saw that the. Earnings (Wages) had seen a whopping increase in the 1st QTR… We’re talking about a 7.2 % increase… Wage inflation is on its way, as employers are learning that they have up the ante up wages to attract people off their couches, while they eat chocolate bon-bons… The gov’t is so proud that they are getting employers to increase the min. Wage to $15… They didn’t count on the spike in prices because of all this new found money in the hands of consumers… And.. don’t forget what I told you would happen is that employers would just adjust prices higher to offset the wage increases… 

So, Gold closed yesterday at $1,900.70, and Silver closed at $27.98… The BBDXY started the day at 1,119.01 and ended the day at 1,116.54, with the Dollar Index starting the day at 90.22 and ending it at 89.95.. So, you can see that there was some good turnarounds done yesterday…

In the Overnight markets…. Well, we’re going to have to have a Turn Around Tuesday today, as the currencies drifted overnight with some dollar buying, and Gold is down $6 in the early trading and Silver is down 14-cents.. That marks two consecutive nights were the overseas markets bought dollars, and then when they hand the books over to their U.S. kissin cousins, those dollars get sold… You don’t think… Nah, that wouldn’t/ couldn’t happen, could it? Oh, I might as well tell you what idea popped into my head right there… That this is an arrangement to keep the dollar at a certain level, and not let Gold get its legs under it completely… You sell, and I buy, and it all works to even out at the end of the day… 

OK… I owe you some stuff to learn and read about this morning, so let’s get to it! Yesterday morning I made mention of the BASEL 3 new regulations on Gold, and after digging into the BASEL 3 report, I found something that I think is important… This is a response from someone representing the bullion banks, which he has a complaint… Let’s listen in: “The LBMA-WGC protest contends that Basel 3 would make the “unallocated gold” business — the business of the LBMA banks — prohibitively expensive by requiring the banks to amass huge new deposits to offset what Basel 3 considers the derivative liabilities of “unallocated gold,” and would impair transactions undertaken for central banks.”

Chuck again… The words, “would impair transactions undertaken for Central Banks” Tells me a couple of things… That the bullion banks ARE doing the Central Banks’ dirty business of suppressing the price of Gold. In addition, it tells me that the bullion banks don’t see how they’ll be able to suppress Gold with the new regulations….

This is why I said yesterday, that I thought that the regulations would be bullish for Gold.. And we all know that what’s good for the goose is also good for the gander, and by that I mean what’s good for Gold is good for Silver… And the other metals… because although I don’t talk about them much, they too have many short contracts on them too… In Ed Steer’s Saturday Column he always gives the update on how many days of production it would take to equal the ounces represented in short contracts… Silver’s number is 165, Platinum’s number is 110, Gold’s number is 75, and Palladium’s number is 35… 

And yesterday I mentioned Russia announcing that they would remove dollars from their SWF… (Sov. Wealth Fund)… A dear reader sent me a note and asked me if I thought this was a pollical move… And I told him that first of all Russia has not hid the fact that they have implemented a dedollarization program, that has gone on for a couple of years now… And then there’s the fact that this could very well be a way for Russia to retaliate for the economic sanctions that the U.S. continues to place on them since 2014.

OK… On June 30th of this year ( in 3 weeks), the cryptocurrencies wll come under the microscope of the House Financial Services subcommittee… Let’s see what Pam and Russ Martens of Wallstreetonparade.com have to say about this upcoming meeting: “The House Financial Services Subcommittee on Oversight and Investigations, chaired by Congressman Al Green of Texas, will hold a hearing on June 30 titled: “America on ‘FIRE.’ Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?” The announcement of the hearing came yesterday, the same day that Wall Street On Parade reported that the Federal Trade Commission was witnessing a skyrocketing increase in crypto scams. The FTC wrote on May 17: “Reports to the FTC’s Consumer Sentinel suggest scammers are cashing in on the buzz around cryptocurrency and luring people into bogus investment opportunities in record numbers. Since October 2020, reports have skyrocketed, with nearly 7,000 people reporting losses of more than $80 million on these scams.”

I’ve also been reading about how many bitcoin investors have had their computers hacked, and lost their holdings… And this is something that concerns me… Think about this for a moment, and hear me later… Russia and China are being blamed for all the hacking going on so they may as well be the ones doing it, right? But if they really want to hurt U.S. investors with some financial cyberwar, they’ll find a way to hack Bitcoin and then… Well, say bye, bye to your millionaire status… I’m just saying..

And then there’s one more thing I want to talk about this morning, and it’ll require you dear readers that have been with me for awhile to put your memory hats on, and remember me telling you that the Trade War with China was a wasted effort, because there was no one to watch the Chinese to see if they were abiding by the agreement… Ok, now take your memory hats off and come with me as I check the Chinese renminbi… Oh, looky there! The renminbi is stronger VS the dollar now than it was before the Trade War! Which is why the Chinese tried to put the brakes on the appreciation of the currency a couple of weeks ago… Chinese officials are scared that foreign direct investment (FDI) will increase as currency investors see the appreciation of the currency and want in… And that could cause inflation to rise… 

Ok, that wasn’t the last thing I wanted to talk about, but this will be, for sure! Speaking of FDI, Russia ranks 11th among the most attractive countries for foreign direct investment (FDI) in Europe. And like everyone else, 2020 and COVID knocked their FDI down to 2014 levels… But that should be turning in Russia’s favor now…

The U.S. Data Cupboard remains, for the most part, empty, and will remain that way until Thursday. Today we will see the Small Business Survey and the Job Openings… neither of which would be considered as market moving data… I still can’t get over the wage increases in the first QTR… Hourly compensation jumped 7.2 percent in the first quarter, according to the BLS’s [Bureau of Labor Statistics] revised estimate of labor costs and productivity Wage inflation is revving up the engine folks..

To recap… The early and overnight selling of the currencies and metals was turned around during the U.S. market yesterday, with the euro gaining 1/3re cent, Gold $7.70 and Silver 7-cents which were big turnarounds from what was going on yesterday morning, that’s for sure! Chuck goes further into discussion of the BASEL 3 rules, talks about Bitcoin a bit, and discusses how useless the China Trade War was…

For What It’s Worth… The folks at Wallstreetonparade.com, Pam and Russ Martens do a tremendous job of research into the items they write about… And this article is no different. It’s about how Janet Yellen continues to take in huge payments for speaking, from the banks that she supposed to regulating, and it can be found here: The Wall Street Captured Fed Consolidates Its Power Under Biden (wallstreetonparade.com)

Or, here’s your snippet: “When Yellen was not reappointed as Fed Chair by Donald Trump when her Chairmanship term expired in 2018, she immediately cashed in her chips on Wall Street, collecting millions of dollars in speaking fees in 2019, and undisclosed millions more in 2018. (See Janet Yellen’s Cash Haul of $7 Million Is Just the Tip of the Iceberg; She Failed to Report Her Wall Street Speaking Fees from JPMorgan and Others in 2018.)

Yellen was a Federal Reserve Board Governor when she was appointed Fed Chair. Her term as a Governor didn’t expire until 2024. Yellen could have remained in that position. Instead, she opted for millions of dollars in quick cash from the very same mega banks that the Fed had been regulating during her tenure there. These were also the same banks that had blown up the U.S. financial system in 2008 and received a super-secret $29 trillion bailout from the Fed. The details of the Fed’s astronomical bailouts to the Wall Street mega banks were only made public after the Fed waged and lost a multi-year court battle to keep the size and recipients of its bailouts a secret.

The largest recipient of the Fed’s bailouts was Citigroup. It received a cumulative total of more than $2.5 trillion in below-market rate loans from the Fed from 2007 through at least the middle of 2010. After Yellen was nominated by President Biden to serve as U.S. Treasury Secretary, her financial disclosure report showed that she had spoken three times at Citigroup, on March 6, March 11, and March 12, 2019. She made $217,200 for each event, for a total of $651,600.

Oodles of cash were also flowing into Yellen’s bank account from Citadel, a giant hedge fund recently under scrutiny before the Senate Banking and House Financial Services Committees. Yellen’s financial disclosure report showed she had been paid $992,500 for speaking engagements at Citadel and had refunded it $50,000 to $100,000 for a cancelled event.

The most poignant analysis of Yellen’s cash haul from Wall Street came in a Tweet from Jesse Eisinger of the public interest publication, ProPublica. Eisinger wrote: “Deeply troubling two-fisted money grab from banks by Janet Yellen. This is corruption, but isn’t called that because it’s so quotidian.” Eisinger also noted: “Sure, Yellen might think she can make independent decisions once in office. But how arrogant is it to imagine that money corrupts everyone but you?”

Chuck again… Janet Yellen has a ton of power now, and this could all become a real mess if one of her babies (casino banks) get into trouble…

Market Prices 6/8/2021: American Style: A$ .7742, kiwi .7208, C$ .8277, euro 1.2180, sterling 1.4140, Swiss $1,1157, European Style: rand 13.5589, krone 8.2494, SEK 8.2745, forint 285.45, zloty 3.6700, koruna 20.8510, RUB 72.81, yen 109.48, sing 1.3235, HKD 7.7591, INR 72.87, China 6.3969, peso 19.77, BRL 5.0437, BBDXY 1,117.91, Dollar Index 90.10, Oil $68.72, 10-year 1.55%, Silver $27.79, Platinum $1,166.00, Palladium $2,904.00, Copper $4.45, and Gold… $1,895.40

That’s it for today… I was happy to hear the news from the Doc about my internal bleeding mess… But I’m very unhappy that I lost a ton of weight only to find that I had to go back up 1 shirt size because of the lump on my side… I was down 2 shirt sizes, and 3 pant sizes… UGH! Man I got a wild idea yesterday, and decided to make meatballs! I had never made them before, and probably won’t again, because of all the stuff I had to get out to make them! I was on my feet for over 3 hours, and it was the longest I have been on my feet since before the blood loss… So, I guess I AM getting stronger again! YAHOO! I work 5 different crossword puzzles each morning, while I drink my coffee, only to keep my mind sharp… I really enjoy doing them each day. Ian Gomm takes us to the finish line today with his song: Hold On… “I’ve been dreaming of a new tomorrow, And wakin’ in the morning sun, For so long, for so long” This song was a hit in 1978, during the height of Chris Gaffney’s favorite music, Disco, and proved that you didn’t have to have a disco beat to have a hit song! I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

 

June 7, 2021
 
* Another engineered takedown on Thursday… 
* Russia announces they will remove dollars from their SFW… 
 
Good day… And a Marvelous Monday to you! I have some news this morning, I was not thinking on Thursday last week, and failed to alert you to the fact that I had a hospital appointment on Monday morning, for blood work, and wouldn’t be writing a Pfennig… But I decided late last night that since I failed to tell you, I would get up extra early and get at least something out… So… Let’s not dawdle around here, let’s get to the stuff that matters! Carlos Santana greets me this morning with his song: Evil Ways…  
 
Well, Thursday was another engineered takedown of the metals, and currencies… It got very ugly at one point in the day with Gold down $40, the short paper trades were flying around, and it was getting quite dark, and then in a space of time of a NY Minute, Gold turned, and fought back, ending the day down $37… But I said to anyone that would listen to me at the close of Gold, that the fight was a good sign for Friday’s trading.  
 
And that’s exactly what we had on Friday, and recovery of sorts… Gold gained $21.20 on Friday, closing the week at $1,893.00, and Silver gained 38-cents to close the week at $27.91… What a whirlwind end of the week! 
 
So, did the price manipulators know that the Jobs Jamboree of Friday would disappoint, or that Factory Orders would print at negative -.06% for April, and decide to take the wind out of the sails of Gold & Silver ahead of that news hitting the markets on Friday? I believe in my heart of hearts that’s exactly what happened… Because when those two data items printed on Friday and were disappointing, Gold & Silver got bought by the truck load… 
 
The Dollar really bounced higher on Thursday too, with the BBDXY moving from 1,117 in the morning to 1,124 at the end of the day… On Friday the index dropped back to 1,118.  
 
In the overnight markets the dollar is getting bought again… As the data prints from Friday have been forgotten already… The BBDXY is up to 1,119 this morning, and the euro can’t find a bid, as it has slipped down to 1.2150, after pushing toward 1.23 last week before the engineered takedown took place. Gold is down $6 this morning, and Silver is down 25-cents.  
 
Well there was some news on Friday that really pushed the dollar down, and it came from Russia, where they announced that they will remove dollars from their Sovereign Wealth Fund, and buy Gold, euros and renminbi… I have that story reserved for you in the FWIW section today, so you can get the skinny on that there… 
 
Late last week I reported that the Eurozone Inflation had risen to 2% for the first time in a month of Sundays… And wondered what the ECB would do next? Well there’s been no news from any of the ECB members as to what their next move will be, but given the fact that Germany is the largest member of the European Union, and therefore has the largest vote in the ECB, and the fact that Germany is still scared to death of inflation, given their past, that the ECB will at least jawbone that they are going to act to combat rising inflation… Whew! that was a long winded sentence! My fat fingers need a rest after that one! 
 
OK, let’s go to the Data Cupboard. We’ve already talked about the Jobs Jamboree and Factory Orders from last week… The ADP Employment report on Thursday last week showed that nearly 1 Million new jobs were added in May… That marks two consecutive months where the ADP and the BLS Jobs report had very wide differences… The BLS said that 559,000 jobs were created, and that included 218,000 jobs that they added to the surveys… So, what gives with these wide differences? I’m going to dig into this further, and report back at a later date… 
 
The Data Cupboard this week is basically emptied out for the first 3 days this week, and then on Thursday we’ll see the stupid CPI for May… Recall that April’s CPI (consumer inflation) had sprung higher, and I expect May’s data to add to that… But in reality folks, you should pay no attention to the stupid CPI, unless you want to look at it for amusement purposes!  I always make a quick visit to www.shadowstats.com for a report of what real inflation is, after the CPI prints… 
 
To recap… Chuck is on the timer this morning and has to get to the hospital for blood work this morning, so the Pfennig is short-n-sweet. Gold & Silver got the snot kicked out of them on Thursday, but recovered a bit on Friday… Another engineered takedown is what happened on Thursday… Russia announced that they are removing dollars from their SWF… And the overnight markets are buying dollars…  
 
For What It’s Worth… Ok, I teased about this above, so here is the article regarding the announcement by Russia late last week, and it can be found here: (RUB USD) Russia Cuts Dollar Holdings From National Wellbeing Fund Amid Sanction – Bloomberg
 
Or, here’s your snippet: “Russia said it will eliminate the dollar from its oil fund to reduce vulnerability to Western sanctions just two weeks before President Vladimir Putin holds his first summit meeting with U.S. leader Joe Biden.
 
The National Wellbeing Fund will shift its dollar holdings into euros, yuan, and gold, Finance Minister Anton Siluanov said.
 
The dollar pared gains on the news today before bouncing back as analysts said the immediate market impact is likely to be limited.
The transfer will take place within the central bank’s huge reserves. It affects about $119 billion in liquid assets, of which about a third is held in dollars.
 
The central bank isn’t planning to resume gold purchases as a result of the wealth-fund shift, a person familiar with the situation said, speaking on condition of anonymity to discuss matters that aren’t public.
 
“Geopolitics does play a role,” Siluanov told state television at the St. Petersburg International Economic Forum. “We’re trying to protect our investments.””
 
Chuck again… I would think that this would eventually support the price of Gold… but then stranger things have happened… I’m just saying… 
 
Market Prices 6/7/2021: American Style: A$ .7744, kiwi .7206, C$ .8275, euro 1.2152, sterling 1.4130, Swiss $1.1111, European Style: rand 13.4956, krone 8.2780, SEK 8.2735, forint 284.54, zloty 3.6743, koruna 20.8974, RUB 72.81, yen 109.47, sing 1.3240, HKD 7.7575, INR 72.73, China 6.3942, peso 19.84, BRL 5.0473, BBDXY 1,119.01, Dollar Index 90.22, Oil $ 69.38, 10-year 1.57%, Silver $27.66, Platinum $1,169.00, Palladium $2,919.00, Copper $4.46, and Gold… $1,886.40
 
That’s it for today, and again sorry about the shortness of the letter this morning, I’ll do better tomorrow. Oh Woe is me for my beloved Cardinals, who were swept by the Reds this past weekend… Baseball is like that… The last time the Reds were here, the Cardinals did the sweeping… Oh well, move on to the next game… Andrew, Rachel, Braden and little Evie came to visit yesterday… Little Evie will steal your heart in the first 5 minutes she’s around you, and yesterday she stole good friend, Duane’s heart… I heard from the great Mogambo Guru last week! Talk about brightening my day! Here’s short bit from his email to me: “And of course I am standing behind my enthusiasm for gold, silver and oil. I am constantly amazed that the idiots pushing a “green” economy don’t understand how silly it is. With the sun providing roughly 3 watts per square meter of solar panel, I would be surprised if any of them can compute how many square meters of solar panels it takes to power a 1,500 watt hair dryer!”
Ok… gotta go! James Taylor sends us to the finish line today with his song: Carolina In My Mind…  I hope you have a Marvelous Monday, and Please Be Good To Yourself! 
 
Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts

Chuck Butler

Creator & Editor of:

A Pfennig For Your Thoughts