Disappointing Jobs Report, N. Korea, Weigh Heavily On Dollar!

Chuck Butler’s: A Pfennig For Your Thoughts
September 5, 2017

* Jobs report is disappointing…
* N. Korea test another bomb…
* China moves to replace dollar!

Good day… And a Tom Terrific Tuesday to you! I sure hope you all had a fantabulous 3-day holiday weekend! I know I sure did! I cooked all day Saturday, and part of the day on Sunday, in preparation for the Annual Butler Labor Day BBQ… The weather was just absolutely beautiful all weekend, until storms rolled through last night, but the storms cooled things down a bit, and we’re off to another forecasted beautiful week here weather-wise. Congrats to good friend, Duane, and his son Dane, they were the “Champions of the World” in washers on Sunday! I’ve got a ton of BIG stories that hit the newswires this weekend that are going to affect the value of the dollar, for you today… Los Bravos greet me this morning with their 60’s song: Black is Black… My iPod got a workout on Sunday, playing nonstop music from 1 o’clock in the afternoon, until well after midnight!

OK… First things first… I told you, I told, you, I double, double told you, I put a penny in my shoe to remind me to tell you…

Oh, stop it Chuck! Even a blind squirrel can find an acorn now and then, and your call last week that the BLS jobs report would be disappointing was bang on, as only 156,000 jobs were, so-called, created in August, not the 170,000 or 180,000 that was being forecast… The Unemployment Rate inched higher to 4.4%, and the Avg. Hourly Earnings were only up 0.1%! OK, this is where I go into my monthly tirade about the BLS and their hedonic adjustments. The BLS added, after the surveys were all received, mind you, 103,000 jobs… That means that when the surveys came in they revealed only 53,000, jobs created in August… Now put that in your rate hike pipe and smoke it, Federal Reserve!

A couple of months ago after the rate hike in June, I said that I thought that the June rate hike would be the last in this cycle that is… My former colleague, Antione, sent me a note and said, “no rate hike for September?” And I said no… and that by December the Fed would be discussing a reversal of their rate hikes… Wow! He said! Well, for now, it looks as though the Fed is going to bypass a rate hike at the September meeting, which would fall into my scenario, very nicely, because, of course depending on what they say, they could be swinging the door wide open for Gold to really go on that strong run that I’ve been talking about.

So, the currencies and metals, especially the metals rallied after the disappointing Jobs report here in the U.S. And that rallied carried through to yesterday, in thin trading, with the U.S. on holiday. Overnight, it’s been more of the same, trades that are getting done, are dollar sells…

We also received news this weekend that N. Korea probably tested a hydrogen bomb, thus defying the warnings from both the U.S. and China… N. Korea’s leader is a nut job folks, and is hell-bent and whiskey bound to start a war… Well, the safe havens of Treasuries, Gold, euros, francs, and yen are all being bought in response to the bomb testing and defying of warnings by N. Korea.

OK. I have, like I said above, a couple of HUGE news items to tell you about, and I’m not going to wait for the FWIW section with these! So… Are you ready? Let’s go!

This was from the Nikkei Asian Review… “The world’s top oil importer, China, is preparing to launch a crude oil futures contract denominated in Chinese yuan and convertible into gold, potentially creating the most important Asian oil benchmark and allowing oil exporters to bypass U.S.-dollar denominated benchmarks by trading in yuan.” OMG! This is a real game changer folks!

So, how many of you recall me telling you over and over again that once China got the Oil producing countries to accept renminbi (same as yuan) that the end for the dollar as a Reserve Currency was in the making? Well, that’s what’s going on here folks! And the renminbi will be Gold backed, which is another thing I kept telling you would eventually happen, thus making the renminbi the most valuable currency in the world! These are all things that I kept saying over and over again, like a broken record, and people were beginning to think I had lost it!
OK, I’m sure I’ll have more on this as the week unfolds…

Then to throw salt in the dollar’s wound from that announcement, the BRICS (Brazil, Russia, India, China and S. Africa) have announced that they, well, I’ll let the article tell you all about it that can be found here: http://theduran.com/brics-talks-create-crypto-currency-another-blow-us-dollar/

And here’s what it’s all about: “The Head of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev has stated that the BRICS may opt to create their own cryptocurrency for the purposes of global commerce.
A cryptocurrency is a digitally based means of exchange wherein the value of said currency is not determined by a central-bank. Most cryptocurrencies can be converted into state-issued currencies (Dollars, Euros, Yuan, etc.) through various foreign exchange services.

While the US Dollar remains the most popular global trading and reserve currency, this is rapidly changing. A BRICS backed cryptocurrency may be both the proverbial ‘Dollar buster’ as well as a ‘sanctions buster’.”

OK… boy I was frustrated with my laptop just then, and was ready to throw it in the trash… But if finally came around to my way of thinking! HA! So… what do you think? Is the rest of the world ganging up on the Empire that is the U.S? After years of shoving dollars that were losing value decade after decade down these countries throats, the rest of the world is stepping up their game, and moving aggressively with their de-dollarization plans…

Someone’s knocking at the door, someone’s ringing the bell, do me a favor open the door and let them in… Hello! Yes, I’m the guy that called the end of the strong dollar trend months ago, Oh, you just wanted to let me know that I was bang on, and now we’ll begin to see the strong run in Gold, euros, and other currencies? Well, thank you, I appreciate that, because nowadays I get no kudos any longer… But I guess that’s good for me, to go down that road, and be respectable about the whole thing! Um, Chuck, just a brief mention here, you did carry on in today’s Pfennig above about being right on the Jobs Jamboree call… Yes, but that was before now! HA!

Seriously, the BRICS cryptocurrency article was interesting especially with the People’s Bank of China (PBOC) issuing an announcement regarding Initial Coin Offerings (ICO’s) saying that: All ICO’s are illegal and that they should be stopped, and money refunded to all who participated in the ICO… It also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies. Digital tokens can’t be used as currency on the market and banks are forbidden from offering services to initial coin offerings…. WOW Not that I want to get into a discussion about cryptocurrencies here, I saw that Bitcoin took a tumble in price when the PBOC issued this announcement.

So… The Dollar Index has dropped into the 92 handle… And Gold finally moved past $1,325… In the early morning trading I’m seeing some pairing of the gains made Friday, yesterday and last night. The euro had climbed to 1.1925, but has fallen back to 1.19, and Gold had reached $1,340, briefly, but has backed off that figure.

The price of Oil has finally moved higher after spending a fortnight in the $46 handle, and is trading toward $48 this morning at $47.79… And the Petrol Currencies are taking notice of Oil’s move higher, with moves higher of their own, led by the Canadian dollar/ loonie, which had lost the 80-cent handle last week, but has regained that and more. The Russian ruble has pushed through the 58 figure and the Norwegian krone is cooking with gas, as is the Brazilian real this morning.

I mentioned above that Gold was a safe haven that was getting bought due to the goings on in N. Korea, but I didn’t give you the details! UGH! So, Gold gained $9.40 yesterday in a thinly traded market. See what happens when the “boys in the band” are missing their biggest member, who was out on holiday yesterday? Gold closed yesterday at $1,333.80, and is up about $4 in the early morning trading today. I still believe that one day, we’ll look back at these prices and wish that we had backed up the truck… I’m just saying… And that’s my opinion and I could be wrong, of course…

But I seem to be on a roll… “Don’t stop him he’s on a roll” “Over? Did you say “over”? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!” I still think that’s one of the funniest lines in a movie ever… I used that quote quite a few years ago in the Pfennig, and I actually had someone write me and tell me that I needed to get my history straight, that it was the Japanese that bombed Pearl Harbor! I about fell out of my chair laughing so hard! I still smile and have a little chuckle when I talk about it again!

OK.. enough silliness, The U.S. Data Cupboard had the ISM (manufacturing index) also on Friday and it showed a healthy 2 point gain in the index number… I’m kind of miffed at this improving ISM each month, when Factory Orders, which will print today for July, Durable Goods Orders, and Capital Good Orders have all been weak… But, I’m not going to lose any sleep over it… And like I said, today’s data print is July Factory Orders, which will attempt to come out of the red that was all over June’s numbers…

To recap… The jobs data was disappointing on Friday, and N. Korea tested a hydrogen bomb over the weekend, and these two things have weighed heavily on the dollar, as the safe havens of Treasuries, Gold, euros, francs and yen are all on the rally tracks. China is going to issue a futures contract for Oil that’s denominated in renminbi and backed by Gold… Chuck’s view for China replacing the dollar denominated world is all coming to us in living color!

For What It’s Worth… I saw this article and thought… “OMG! what is going on in this country?” This is about a law that was passed, quietly I might add, that is going to lead to others just like it just wait-n-see! And you can find it here: https://needtoknow.news/2017/08/us-congress-quietly-passed-bill-allowing-searches-homes-without-warrant/

Or, here’s your snippet: ” Congress passed a new law that allows warrantless searches in the DC Metro area under the guise of improving safety. President Trump signed the bill. The law gives the Washington Metrorail Safety Commission, located in Virginia, Maryland and Washington, DC, the power to enter property near the Metro Rail System “without limitation” and without a warrant, for the purpose of “making inspections, investigations, examinations, and testing.” [Only five congressmen voted against the bill, proving that most politicians would burn down their grandmothers’ homes so long as it was claimed to be for national or local security.”

Chuck again… I just shake my head in disgust, over and over again… What will come next?

Currencies today 9/5/2017: American Style: A$ .7978, kiwi .7187, C$ .8074, euro 1.19, sterling 1.2942, Swiss $.9597, … European Style: rand 12.9509, krone 7.8046, SEK 7.9655, HUF 257.57, zloty 3.5616, koruna 21.9574, RUB 57.69, yen 109.38, sing 1.3549, HKD 7.8250, INR 64.08, China 6.5332, peso 17.83, BRL 3.1388, Dollar Index 92.63, Oil $47.79, Silver $17.96, Platinum $1,005.05, Palladium $980.50, and Gold…. $1,337.60

That’s it for today… That was quite the interesting morning read today wasn’t it? China in the middle of everything de-dollarization wise, and N. Korea stirring the pot once again… It was great seeing a lot of our friends and family Sunday, the day was just grand! Braden spent the night with us Saturday night. Him and I played Sorry until I couldn’t play it any longer! He’s OK when he loses, but when he wins, he sings, dances, and carries on… Today’s youth, right? My beloved Missouri Tigers won on Saturday, but did they really? Their defense is awful once again this year… UGH! And the Cardinals are hanging around keeping a foot in the door of the playoffs.. Can they get in? I doubt it, but at least they have everyone interested right now… The great Al Stewart takes us to the finish line today with his song: Song on the Radio… You’re on my mind like a song on the radio… 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.