Dollar Buying Continues…

A Pfennig For Your Thoughts

November 17, 2021

* Currencies & metals get sold on Tuesday… 
* China surpasses the U.S. as wealthiest nation… 

Good Day… And a Wonderful Wednesday to you! Our Blues played last night and lost their 4th game in a row. UGH!   And my St. Louis U. Billikens Basketball team played last night and they found out that they are not ready for prime time… UGH!  I had a long conversation yesterday, with good friend, Dennis Miller… He sounded much better than the last time I talked to him, but he’s still not out of the woods… He’s itching to do a letter, and drafted one, and sent it to me to look over… That’s the best medicine as far as I’m concerned… Get back on the saddle and ride until you can’t ride any longer! Stan Whitmire greets me this morning with his version of the song: Merry Christmas, Darling…

Well, I told you last week that you had better batten down the hatches until this recent dollar strength is over, and it didn’t appear to be near an end yesterday! The BBDXY rose from 1,173 in the morning to 1,178 to close the day… The euro is dropping through the 1.13 handle like a hot knife through butter… And every other currency not named the Indian rupee, or Chinese renminbi, is following the euro down and down, and down…

I read last night that traders are looking at the yield differential of the German 10-year Bund, VS the U.S. Treasury 10-year, and while the U.S. Treasury has the yield advantage, the writer said that the dollar would remain well bid… 

Well, I have to question that reasoning… For if it were true, then the 10-year’s yield would be dropping from all the buying, and it’s not dropping, instead its increasing, and last night when I checked it just to make sure I was saying the correct thing, the 10-year’s yield had increased to 1.63%… There’s a reason investors and traders are buying dollars, but I don’t believe the yield differential is the main reason… The main reason? You got me, on that one, folks!

As I’ve mentioned recently, the only currencies that I see holding on for dear life are the Indian rupee and the Chinese renminbi… With the price of Oil slipping and then rallying, rinsing and repeating, the Russian ruble can’t find any buyers until Oil stops slipping… 

Gold & Silver after experiencing 4 consecutive days of gains, have now given back gains 2 consecutive days… Gold lost $11.80 to close at $1,851.40, and Silver lost 24-cents to fall back below $25, to $24.90… I really was beginning to think that Gold & Silver were on their respective ways to much higher ground…

Yesterday, the U.S. dollar got a big boost from the Rocktober prints of Retail Sales, Industrial Production and Capacity Utilization, which all three were improved reports from the previous month… Like I said yesterday, last month’s prints were not so good, and didn’t exactly illustrate a strong economy, and I said that the powers that be, couldn’t have that, and that I was sure that this month’s reports would be cooked, massaged, and twisted and turned until they came out just right, as baby bear said!

So those reports had more to do with the dollar’s run yesterday than anything else… But… the one thing I would point out is that when these reports disappointed last month, the dollar barely budged lower, so apparently what’s good for the goose is not good for the gander…

In the overnight markets last night… The dollar buying stopped, for now, at least, but the dollar didn’t give back much. The BBDXY closed last night at 1,178.19, and this morning it is trading at 1,177.61… So, a little slippage, but not much… Gold is up $11 in the early trading and Silver is up 27-cents, so these two have erased yesterday’s losses, but it is the early trading, and the price manipulators haven’t arrived at their desks yet… 

The price of Oil has slipped below $80 once again… Back and forth, back and forth, C’Mon oil traders pick a lane, any lane, and stay in it! And Bonds continue to be on the selling blocks… The Bond Boys, as they were once known, can’t get together to figure out what they need to do… I’m of the opinion that they need to get together and run yields higher to force the Fed/ Cabal/ Cartel, to step in and buy bonds again… 

This scenario would squash whatever credibility the Fed/ Cabal/ Cartel still has, for they had made such a Big deal out of their tapering, but if they had misjudged the markets, and had to come back to buy more bonds, well they could kiss their credibility with the markets good bye! 

Speaking of the Fed/ Cabal/ Cartel, they still don’t know who their leader will be for the next 4 years… Either it’ll be current chairman Jerome Powell, or Lael Brainard… And like I said previously, it doesn’t matter which one will be in the chair… They both will continue to not buck the system and print whatever currency they need to offset the deficit spending in Washington… 

I’m wondering what’s going on here… There was no email in my email box from Ed Steer this morning.. .Yesterday he said that his town was flooding and the town was under a mandatory evacuation order… Hope, you’re safe Ed… 

Yesterday, I spent the better part of the day reading a report from Switzerland… Many years ago at a conference I was introduced to Rob Vrijhof by friend, Michael Checkan, and through the years we would see each other at conferences, etc. and then when I retired Rob tracked me down, an one day he called me from Switzerland! Rob was with the firm WHVP Ltd. But has now retired, and his daughter and son in-law run the investment firm. One of the things Rob did for me was get me signed up for their monthly newsletter: The Swiss View…

And this morning I’m going to share with you a small snippet of the report from WHVP Ltd. They were talking about how investors have jumped back into stocks after the brief September selloff…

“However, we believe that changing the strategy due to frustration is the wrong move. We feel that the situation did not change for the better. Despite the markets rising, there are several new risks like the real estate market in China, the rise in inflation, and the rising tensions between China and the U.S., and Japan due to their provocations of Taiwan.”

I wish I had said it like that! But I couldn’t agree more… These are things that hanging over the U.S. markets like the Sword of Damocles, and they hanging by a thread… And they didn’t even mention the soap opera-like goings on at the Fed/ cabal/ Cartel! Or the mid terms that are coming up with the debt ceiling question coming again…

The bizarre markets have gone even more bonkers folks… Last week, Elon Musk ran a Twitter poll on whether he should sell a large chunk of his Tesla stock, and when the poll suggested he sell, he did! He left the decision on the stock that he owned in his own company, to Twitter followers? Give me a Break! Every day, there’s something else that illustrates how Bizarre the investment world is these days… 

I’ve said this before, that when things begin to get too Bizarre, I turn to publishing guru, and best selling author, Bill Bonner, to explain things… So here’s Bill on the recent Elon Musk Bizarre caper from his letter that can be found at www.rogueeconomics.com : “This is obviously a novel way of making decisions. And perhaps better.

If two heads are better than one… surely, the 3,519,252 poll respondents, including the 2,037,647 who answered “Yay,” raise the quality of the decision at least to a C+.

What is most amazing about the whole thing is that 3,519,252 people… all supposedly compos mentis… probably adult-ish… presumably with real lives… actually found the time to weigh in on a financial question that didn’t concern them.”

Thanks Bill…. 

The U.S. Data Cupboard for the rest of the week is weak at best… Besides the usual Thursday fare of weekly Initial Jobless Claims, the rest of the week has nothing but 2 & 3rd tier reports, and a full slate of Fed/ Cabal/ Cartel head speakers all around the country… Simple question, before Big Al Greenspan, did anyone ever know who the Fed heads were, much less who their chairman was? But these days, they’re all out speaking all the time, getting their name, views, and thoughts out to the public… Personally, I liked the way it used to be done… I’m just saying…

To recap… The dollar got bought like it was toilet paper during the plandemic… the economic reports were strong for Rocktober, (Chuck told you they would be because the powers that be can’t have weak reports!) Gold & Silver also got sold yesterday, for the second consecutive day… Bond yield differentials are being pointed to for the reason the dollar is so strong, but Chuck points out that if that were really the case, then U.S. Treasuries would be being bought, and that would bring the yield of the bond down… But the yield is going up… go figure!

For What It’s worth… This article came to me from longtime reader Bob… who said that if this is true, everyone needs to know about this…. Well, the Pfennig is a start, but not close to getting out to everyone! This is about China overtaking the U.S. in wealth… and it can be found here: China tops US as ‘wealthiest’ nation in the world, new McKinsey report claims | American Military News

Or, here’s your snippet: “China has overtaken the United States as the wealthiest nation in the world, according to a new report from the global management consulting firm McKinsey and Company released Monday. Researchers at McKinsey and Co. analyzed national wealth according to a nation’s net worth. 

The group’s analysis showed that China’s net worth soared from $7 trillion to $120 trillion between 2000 and 2020. The United States net worth, on the other hand, only doubled over the same period to $90 trillion.

“We have borrowed a page from the corporate world—namely, the balance sheet—to take stock of the underlying health and resilience of the global economy as it begins to rebound from the COVID-19 pandemic,” the report explained. “This view from the balance sheet complements more typical approaches based on GDP, capital investment levels, and other measures of economic flows that reflect changes in economic value.”

“Across ten countries that account for about 60 percent of global GDP—Australia, Canada, China, France, Germany, Japan, Mexico, Sweden, the United Kingdom, and the United States—the historic link between the growth of net worth and the growth of GDP no longer holds,” the report continued. 

Worldwide net worth increased from $160 trillion in 2000 to $510 trillion by 2020. Among the countries listed in the study, the average per capita net worth was $66,000, with “large variations” present across economies, and “even more so across households within an economy.” Per capita net worth ranged from $46,000 in Mexico to $351,000 in Australia. 

“We are now wealthier than we have ever been,” said Jan Mischke, a partner at the McKinsey Global Institute in Zurich, according to Bloomberg.

Researchers also found that in both the U.S. and China, over two-thirds of the wealth comes from the richest 10 percent of households, and their share of the wealth continues to rise.”

Chuck again… Ahhh, the old wealth inequality thing again, eh? I find this very interesting that China has surpassed the U.S. as the wealthiest country on earth… That means they have more wealth to spend on miltary… I’m just saying…

Market Prices 11/17/2021: American Style: A$ .7286, kiwi .7006, C$ .7956, euro 1.1314, sterling 1.3444, Swiss $1.0741, European Style: rand 15.5020, krone 8.7432, SEK 8.8590, forint 322.55, zloty 4.11.91, koruna 22.2810, RUB 72.83, yen 114.81, sing 1.3577, HKD 7.7871, INR 74.16, China 6.3839, peso 20.72, BRL 5.4713, BBDXY 1,177.61, Dollar Index 95.90, Oil $79.79, 10-year 1.63%, Silver $25.17, Platinum $1,073.00, Palladium $2,248.00, Copper $4.37, and Gold… $1,862.10

That’s it for today, and this week… Next week will also be a short week, with Thursday being Thanksgiving… I’m going to the Sports On Tap event downtown tonight, with good friends, Rick and Kevin, and my son Andrew… But I can’t be out late, as I have to report to the doctor tomorrow morning bright and early! When I was younger I could stay out very late, and still get up bright and early in the morning to go to work… But not any longer! UGH! So, good friend, Dennis Miller interviewed me for his upcoming letter… I didn’t pull any punches and just said what was on my mind…  Beegie Adair takes us to the finish line today with her version of the song: What Are You Doing New Year’s Eve… I love the Harry Connick Jr. version of that song… And with that, I hope you have a Wonderful Wednesday to day, and please Be Good to Yourself!

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