Eurozone 1st QTR GDP Hits 2.5%…

A Pfennig For Your Thoughts

May 15, 2018

* Currencies can’t hold their gains from Friday
* Gold is getting whacked this morning!

 

Good Day… And a Tom Terrific Tuesday to you! Well, day 5 on my own, turned out to be a good one, as my good friend, Mike Kettler, invited me to have a drink and dinner with him… It stormed like the dickens here while I ate my dinner, but that didn’t interfere with the good comradery… Thanks Mike! A tree was down on the road in front of our establishment, but it was east of us, and we needed to go west to go home, so no biggie! Pink Floyd greets me this morning with their 8 minute version of their song: Us and Them… That song has words that I have hung my hat on… “There’s a battle of words, and most of them are lies”..

Well, I told you yesterday that the currencies’ rally wouldn’t be able to continue unless the U.S. said something or did something to rile the markets, and they didn’t, so the currencies, held steady Eddie for the day, with little slippage. Today, we’ll be honored with much data, here and abroad so the dollar will be subjected to the data today, which, in my opinion won’t be helpful for a turnaround in the dollar…

Before I go any further today, I have a correction that I need to come forward with…

Last week, I printed an article from Blacklistednews.com, that they originally took from Forbes. A dear reader sent me a note letting me know that the article originally printed 7 years ago, and therefore was no longer correct. I sent him an apology immediately, for I did not catch that, and promised I would print a correction… The good folks at FX STREET.com also received the notice and they printed a correction that I think I’ll just reprint here… The original release incorrectly stated that Northwestern Mutual owns Russell Investments. The London Stock Exchange Group purchased Russell from Northwestern Mutual in 2014, and announced in 2015 the launch of ‘FTSE Russell’, which split out the index business from Russell’s advice, asset management and investment management offerings. TA Associates and Reverence Capital Partners acquired Russell Investments’ asset management business from the London Stock Exchange Group in 2016. Russell Investments and FTSE Russell are now separate entities.

I apologize to all readers for this error. I’ll be more careful in looking at the news articles I use in the FWIW section each day, going forward. Again, I can’t be held responsible if something in the article is incorrect, but I can be held responsible for printing it. That’s all from here, now let’s move along…

Gold wasn’t able to find a bid yesterday, and it lost a couple of bucks on the day, and is down $9 today in the early morning trading. I just don’t get what’s going on with Gold these days, as one, including myself, would think that this is Gold’s time… But, I guess the “boys in the band” are keeping that from happening…

The Reserve Bank of Australia (RBA) printed their meeting minutes from their meeting two weeks ago… and in the minutes I read something that, well, I’ll reprint the piece I’m talking about and see if you come to the same conclusion… here’s the RBA… “In the current circumstances, members agreed that it was more likely that the next move in the cash rate would be up, rather than down. As progress in lowering unemployment and having inflation return to the midpoint of the target range was expected to be gradual, members also agreed that there was not a strong case for a near-term adjustment in monetary policy. Rather, members assessed that while this progress was unfolding, it would be appropriate to hold the cash rate steady and for the Reserve Bank to be a source of stability and confidence.” – RBA Meeting Minutes.

Well, I won’t beat around the bush here, my take on what was said is that the RBA is ready to hike rates, but want to be cautious and wait for now… The Aussie dollar (A$) traders didn’t see it that way and the A$ lost some ground during the day… What the heck do A$ traders want? Do they need to be kicked in the rear and told, “the RBA is ready to hike rates”? For if they do, line them up and I’ll go down the line kicking each of them in the rear! Dolts all of them, and that’s all I’ll say about that!

I told you yesterday that we would see some good economic data around the world today, and some of it has already printed and is there for the viewing… The Eurozone GDP for the 1st QTR printed and it grew 0.4% VS the previous quarter, and 2.5% year on year… Hmmm… And they calculate their GDP without “adjustments”… So, The Eurozone economy, as a whole, it outperforming the U.S., who just printed a 2.3% GDP…

And what does the euro get for this good GDP performance? It get sold… Go figure… Oh, and the Business Sentiment as measured by the think tank ZEW, saw their index number slip from 87.9 to 87.4, no biggie, but slippage nonetheless. If these pieces of data were chess pieces, I would think that GDP trumps ZEW… I’m looking for Chinese Retail Sales, but haven’t been able to find it right now…

Later this morning, well, for me that is, The U.S. Data Cupboard will have April’s Retail Sales. I told you yesterday that I was looking for a smaller number than the March report that saw 0.6% growth… I would think that April’s number will be half the March number… I read a piece this morning about how the euro responds to U.S. Retail Sales.. Their thinking went something like this: in the last five releases, the EUR/USD moved, on average, 34 pips in the 15 minutes after the data release and 67 pips in the following 4 hours, depending on whether Retail Sales grew or fell in the month. So, taking that info, and the thought that I have about Retail Sales for April being 1/2 the number March’s report printed, one would surmise that the euro would rally today after the print, should it print the way I think it will…

Getting back to Gold for a minute or two of reading time… the GATA folks sent me an email yesterday outlining the words of James Rickards in his book: A New Case For Gold.. I read the book two years ago when it was originally printed, as it was a follow up of Ron Paul’s original book A Case For Gold… And what the GATA folks were focusing on was Rickards’ explanation of how Gold Manipulation works… I don’t have the time or space to print his 15 pages of explanation in the book, but I can give you two paragraphs that I think are very important… Let’s listen in:

“Rickards concedes that ordinary investors cannot beat central bank manipulation of the gold market in the short run but contends that central banks will fail in the long run. Eventually, he writes, citing examples from history, “the manipulators run out of physical gold or a change in inflation expectations leads to price surges even governments cannot control. There is an endgame. … Physical gold is also rapidly disappearing as more countries are buying it up. That puts a limit on the amount of paper gold transactions that can be implemented.”

Rickards advises investors: “It’s important to understand the dynamics behind gold pricing. You need to understand how the manipulation works, what the endgame is, and what the physical supply-demand picture looks like. Understanding these dynamics lets you see the endgame more clearly and supports the rationale for owning gold even when short-term price movements are adverse.” – James Rickards in his book: A New Case for Gold…

Rickard’s book is available on Amazon, or whatever book outlet you use, and if you are a Gold investor, or even thinking about becoming one (what have you been waiting for?) I would strongly suggest picking up this book and reading it. Like I said I read it two years ago, and now I think I many go back and read it again, just to freshen up…

The U.S. Data Cupboard will have some minor data prints today to go along with April Retail Sales.. Things like Business Inventories, the Home Builders’ Index, and the Empire State Index (manufacturing in the NY region)… So, Retail Sales takes the Kewpie Doll today…

You know, I’ve focusing on the goings on in the U.S. so much that I’ve forgotten about some of the fringe currencies, like Indian rupees, and Brazilian real, which have seen better times, performance-wise. The rise in the price of Oil to a $71 handle hasn’t helped the Petrol currencies any, and one has to wonder just what the heck is going on here?

Oh, and here’s another thought… the price of Oil has now more than doubled in the last couple of years and with the sanctions on Iran, Oil supply should be disrupted until OPEC gets their act together, which means the price of Oil could very well continue higher for now… I bet the boys and girls at Ford Motor Co aren’t clinking their champagne glasses together over this news of higher Oil prices… Just last month Ford announced that they were discontinuing a line of small calls and sedans, and would become a Truck and SUV dominated company… Apparently only the Mustang and Focus will survive…

I’ve always had a love for the Mustang… My first date with Kathy was in a Mustang… Oh well, let’s move along here…

To recap… The currencies couldn’t hold their gains yesterday, and saw some slippage from Friday’s upward moves. Today we’ll see April Retail Sales in the U.S. and Chuck points out that the euro could have an opportunity to rally today… Gold is down $9 in the early morning trading today, and the price of Oil is back to $71 and change… The RBA minutes didn’t help the A$ and Chuck wants to know why?

For What It’s Worth… G. Edward Griffin… You may recall his name as the author of the great book: The Creature For Jekyll Island, which is about the formation of the Federal Reserve… Well, he has a weekly letter he puts out and focuses on news articles that fit the description of FWIW to a T! So, here’s his piece on Illinois’s Gov’t raising the property taxes to fund the grossly underfunded Pensions in Illinois… And it can be found here: https://needtoknow.news/2018/05/illinois-proposes-plundering-homeowners-fix-pension-problem/

Or, here’s your snippet: “Illinois has the highest property tax in the nation, with an average of 2.67%, and as high as 5% in some areas, yet the Federal Reserve Bank of Chicago proposed an additional 1% rate hike to cover the state’s underfunded pension problem. Any improvements to one’s property would increase the tax rate, a policy well designed to cause homes to fall into disrepair. The new tax would push down the price of homes, thus punishing current homeowners. Even so, the revenue would help only five state pensions, while 650 county and city pension funds remain to be ‘fixed. ”

Chuck Again… The Creature from Jekyll Island is a book that’s about 1 1/2 inches chock with information about the Fed’s formation, and how the idea was shoved down the throats of citizens by President Woodrow Wilson… Remember my rally cry from the days before the Pfennig had to be reviewed each day before being sent out? It was: repeal 1913…

Currencies today 5/15/18… American Style: A$ .7515, kiwi .6915, C$ .7803, euro 1.1920, sterling 1.3540, Swiss $1.007, … European Style: rand 12.4450, krone 8.0317, SEK 8.65, forint 265.75, zloty 3.5910, koruna 21.4165, RUB 61.76, yen 109.94, sing 1.3368, HKD 7.85, INR 67.95, China 6.3362, peso 19.68, BRL 3.6062, Dollar Index 92.73, Oil $71.36, 10-year 3.02%, (notice this is above 3%!) Silver $16.46, Platinum $905.86, Palladium $981.83, and Gold… $1,309.00

That’s it for today… I guess we’re in for a some stormy days in row, which is not unusual for us here this time of year. It does make scheduling things like baseball games, picnics, graduation parties, etc. challenging! Speaking of graduation… Alex gets his 4 year degree this Friday, but it’s just a pause point, as he still has 2 more years to go to get his doctorate in Physical Therapy. He supposed to be coming by today to cut the grass, but it might be too wet to cut… UGH! Supertramp takes us to the finish line today with their song: Give A Little Bit… I sure hope you can go out and make today a Tom Terrific Tuesday, and remember to Be Good To Yourself!

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

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