Euro Traders Seem To Be Frontrunning The ECB…

A Pfennig For Your Thoughts

September 11, 2019

* Currencies trade in tight range, except euros…
* Russia believes that the Oil price will fall to $40…

Good Day… And a Wonderful Wednesday to you… Well, today is the we observe our 2nd day of infamy… To this day, I still can’t believe we as a nation were attacked like that… Not a good night for my Beloved Cardinals, who proved once again that they have problems hitting the ball when a runner is on third, and less than two outs… Got to get back on the rally tracks boys! Alex has completed 2 of his clinicals and has two left next spring, in the meantime, he’s back at home, going to class again. He’s on the docket to graduate with his doctorate in Physical Therapy, next May… It’s seems like an eternity to him, but I keep telling him that May will be here before he knows it! Cat Stevens greets me this morning with his song: Moonshadow… I’m being followed by a moonshadow, moonshadow, moonshadow… It basically means that the moon is shining on someone…

OK… Another dull day in the currencies folks… I know, I know, I’m beginning to sound like a broken record, of which I’m glad vinyl records are back in style, because for a while I had to amend that statement with I’m beginning to sound like a damaged digital recording… It just doesn’t sound the same, eh? OK, getting back to the currencies… A dull day is a good day, when were mired in the dregs of a strong dollar trend that refuses to give up the conn… But as sure as day follows night, and night follows day, the strong dollar trend will eventually end… I believe it will end in the next year…

But don’t set your watch on my calls… Yes, I’m right most of the time, but take the call I made in February 2010, at the Orlando Money Show, I told the audience that was overflowing, with people lined and standing against the wall, and people sitting in the main aisle on the floor… That the dollar would not be the reserve currency of the world by the end of the decade (2020) and that the Chinee renminbi would be the new reserve currency… Well, I got have of it right… The Chinese renminbi was added to the IMF Special Drawing Rights a couple of years ago, thus making it a “reserve currency” along with dollars, yen, and other currencies that make up the SDR’s… But I will end up being very wrong about the dollar… I realize the decade isn’t over just yet, but… Time waits for no one, and it won’t wait for the dollar’s strong trend to end!

As we went through the overnight markets, first Asia, there was little movement in the currencies, but as the books were handed over to Europe, the European traders began to sell euros. Maybe it’s going to be one of those sell the rumor buy the fact things, because most traders say they are frontrunning the European Central Bank (ECB).

You see, the ECB meets tomorrow, in one of the last two ECB meetings that outgoing ECB President Mario Dragi, will make the final decisions… And it is thought that Draghi will leave the ECB and the European Economy with a journey further into negative deposit rates, and a return of bond buying, as the Eurozone economy, as a whole, seems to be already in a recession. And then there’s the presss conference following the meeting, and in these press conferences, in that past that is, Draghi, has not been kind to the euro…

So, traders are frontrunning that whole scenario that tomorrow holds… And selling euros seems to be the trade du jour today… Because, well, the final meeting before Draghi steps down and former IMF chief Christine Lagarde takes over at the ECB, will be full of back slaps for a job well done, a cake, cards, balloons, and a going away party… So, the real job will be done in tomorrow’s meeting…

I read a report yesterday, that talked about how the writer believes that we are already in a recession here in the U.S. Of course we won’t know for sure until we get the wink and nod from the NBER the folks responsible for calling the recessions, which they normally do after the recession is about over! Can you believe they still have a job? HA!

Don’t forget that I’ve said that this next recession will be a doozy… for a number of reasons of which I’ve already talked about so I won’t go there again, I’m sure I’ll more chances to bore you later on in the letter! HA!

The price of Oil has been on a nice jump higher in price this past week, but the Russians don’t believe it will last. They cite the lack of demand, because of the slowing economies of the world. That’s good news for SUV drivers! Gas guzzlers was what they used to be called, but I’m sure that the car unions, got together, and decided that being called a Gas Guzzler was demeaning and hurt their feelings, so it became politically correct to not say gas guzzler… But then I’ve never been one to be politically correct, so gas guzzler, gas guzzler, gas guzzler!

But it won’t be good for the Russian economy who depends on Oil sales as a large part of their economy… But they’ve weathered the storm there before, and they’ll weather it again… They have little to no debt, and Their interest rates are higher than the rest of the world, and can be cut during a recession without have to worry about going into negative deposit rates…

It might put on hold the stronger moves in the ruble, but I trust the Bank of Russia’s Gov. and I’m sure she’ll do the right thing to keep their heads above water. And for now the ruble seems to be appreciating nicely each day…

Gold had a decent day going, and then the price manipulators showed up at the COMEX and in the end Gold lost $13 on the day… I had to laugh yesterday when I saw a report that said that Citicorp, was calling for Gold to rally to $2,000… What have I always told you when these Big trading Banks and Brokerages make calls like this? That they are probably trading their book… In other words, they are long a large position in Gold, and need for it go higher, so they “ talk it up” … Now, I’m not saying that can’t happen… I’m just leery of these guys… and not just Citicorp… All of them! Remember I did say that I thought that Gold would revisit its previous higher of around $1,965… So, what’s $35 more?

The shiny metal and it’s kissin cousin, Silver, are trading upward early this morning, so Let’s see if that continues, or if they’ll be another showing at the COMEX by the Price manipulators… I’ve got a great article on Gold manipulation in the FWIW section today, do you won’t want to miss that!

The U.S. Data Cupboard is still bare of real economic reports… Yesterday we saw the median Income number for 2018, increase to $63,179, from $62,626 in 2017… This is so backward looking that you see why the markets don’t pay much attention to it…

In other data news…. It was reported yesterday that the poverty rate in the U.S. fell last year… That’s the good news… The bad news is that the number of Americans without health insurance rose by nearly 2 Million people… OK, so when those uninsured people go to the hospital, who pays for their visit? Look in the mirror…

To recap… The currencies were stuck in the mud yesterday, but the overnight markets, in Europe that is, brought some selling in euros ahead of the ECB meeting tomorrow… Because Chuck thinks that the final meeting in Rocktober will be a going away party for ECB President Draghi, so look for rockets at tomorrow’s meeting… Gold got whipped around by the price manipulators yesterday, but is up $6 in the early trading, along with its kissin cousin, Silver, which is back above $18…

For What It’s Worth… Well, this article came to me via my friends at GATA, so there is no link to an article for you today, but…. Since it’s about Gold and price manipulation, I thought I would include the entire article for you, so, here’s your snippet from GATA…

“U.S. Rep. Alex X. Mooney, R-West Virginia, is continuing his efforts to get answers from the U.S. Treasury Department, Federal Reserve, and Commodity Futures Trading Commission about surreptitious interventions by the U.S. government in the financial and commodity markets and particularly the gold and silver markets.

Mooney’s efforts began with letters sent to the Federal Reserve chairman and treasury secretary in April 2018:

In July 2018 the Fed and Treasury responded to Mooney but only incompletely, the Fed denying that it was trading in gold but refusing to say whether it is trading in other markets, the Treasury giving a partial denial of gold trading but failing to answer about the government’s policy toward gold:

In February this year Mooney asked the CFTC, as GATA already had done, if it has jurisdiction over manipulative trading undertaken by the U.S. government or brokers acting for the U.S. government, or if such manipulative trading is authorized by federal law:

The CFTC has never responded to GATA or to Mooney.

Summarizing the major questions that remain unanswered:
1) What is U.S. government policy toward gold? Is the policy still to drive gold out of the world financial system in favor of the U.S. dollar, as State Department records show the policy was in the 1970s?
2) Is the Treasury Department’s Exchange Stabilization Fund transacting in gold?
3) What markets are the Fed and Treasury trading in, through what mechanisms, and for what purposes?
4) Does the CFTC have jurisdiction over manipulative trading by the U.S. government or its agents?
5) Has the U.S. gold reserve ever been audited for any encumbrances? If so, what were the findings?

Of course the refusal of the Fed, Treasury, and CFTC to answer the congressman’s questions promptly and fully is strong evidence that the U.S. government is deeply and comprehensively involved in market manipulation.

If only mainstream financial news organizations and financial market analysts had the courage and integrity to pose Mooney’s questions on their own behalf. Then the world might enjoy some actual financial journalism — and the market rigging and the imperialism the rigging represents might be defeated and free and transparent markets restored along with limited and accountable government.”

Chuck Again…. Don’t you just love this guy Alex Mooney? His state has taken away the taxes on Gold & silver profits, and at the same time fires off letters asking for answers, that nobody, other than the usual suspects, lie the folks at GATA and Ted Butler have done! Maybe, one day, we’ll know the truth, the whole truth, and nothing but the truth… And don’t believe the Gov’t if they say, “you can’t handle the truth!”

Currencies today 9/11/19 American Style: A$.6866, kiwi .6417, C$ .7607, euro 1.1007, sterling 1.2352, Swiss $1.0082, European style: rand 14.6927, krone 8.9723, SEK 9.6867, forint 301.84, zloty 3.9366, koruna 23.4991, RUB 65.42, yen 107.71, sing 1.3784, HKD 7.8395, INR 71.63, China 7.1108, peso 19.51, BRL 4.0941, Dollar Index 98.57, Oil $58.02, 10-year 1.71%, Silver $18.10, Platinum $938.29, Palladium $1,562.11, and Gold… $1,491.97

That’s it for today… A somber day ahead, as we observe our 2nd day of infamy… I recall the day after the 9/11 catastrophe, sitting in the office and trying to write something about the markets, which didn’t make much sense to me to do, but an astute pfennig reader sent me a note that day, telling me it was important that we attempt to continue as we did before the day… And that turned me around! I came out of my funk, and began to write like I had before 9/11…. When baseball returned our adored announcer, Jack Buck, recited a poem, that you should Google, and read… The Jefferson Starship takes us to the finish line today with Marty Balin doing the lead singing of their song: Count On Me I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

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